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The Great California Exodus of 2021

California has quickly transitioned from a place of limitless opportunity to a land of rigid limits and control. This change is the reason a lot of people are migrating.  Here are some quick facts to kick you off: In 2020, California recorded the highest population out of all the states in the U.S.A. Before the […]


Joseph Anthony
July 22, 2021
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California has quickly transitioned from a place of limitless opportunity to a land of rigid limits and control. This change is the reason a lot of people are migrating. 

Here are some quick facts to kick you off:

  • In 2020, California recorded the highest population out of all the states in the U.S.A.
  • Before the end of 2020, the state witnessed a tremendous drop in its population figures.
  • Several people have cited strict tax laws as reasons for fleeing the state.

According to recent news from the Department of Finance at California, the population dipped 182,083 people last year. This is the first time the state is recording a drop in its demographics, and the deadly Coronavirus is partly to blame. Other factors that have led to this situation are the declining birth and immigration rates.

You could say you saw this coming as this is the trend with many Americans: living encrusted communities behind to go and start anew.

In a bid to help you understand better, this brief answers the questions you might have concerning this exodus.

Why Are People Leaving California? 

It is home to dreamy beaches, top-tier infrastructure, and a vast pool of employment opportunities, but people are still leaving California? Why so?

Rising Taxes

The current tax rate in California stands at 13.3, but still, legislators want to bring it to over 17%. This move will see the downfall of small and large business owners as most of them are experiencing difficulties due to the current COVID-19 situation.

Maintaining a good lifestyle is hard enough, and higher tax cuts are a hot nail on the wound.

Housing Crisis

According to statistics, the median cost of a house in California is around $600,000. As for rent, the average Californian pays $2800, which is way high compared to the $1600 national average.

Generally, if you plan to move to California, you better be rich or seek hospitality from family or friends.

Political Upheaval

While most California residents support their state policies, some feel the state is moving in the wrong direction.

Moderate and conservative voters have cited the growing union influence, looting, and lack of standardized testing in public universities as reasons for leaving.

Some citizens feel that their vote isn't valued, and others think that politicians only pay attention to large cities and neglect the rural areas.

Also, with the COVID-19 restrictions, residents have been under additional strain. Restrictions in businesses such as bars, gyms, and restaurants have seen the laying off of several employees. As a result, many people are unemployed and can't sustain their livelihoods.

Socio-Economic Problems

Of all states, California has recorded the highest number of homeless people–150,000. A majority of them are drug addicts and have mental illnesses. They wander all over the place and pose risks to the remaining population, especially kids.

Former residents claim that even the wealthy suburbs are affected when it comes to wandering homeless people. Many aren't pleased about the growing shanties across the state. And according to them, the government is either looking the other way or making the whole situation even worse.


Crime is on the rise, and COVID-19 lockdowns are mostly to blame for this. Residents have raised concerns about criminals roaming around freely and have blamed the police force for failing to do their part. The response to robberies, too, is slow, and that doesn't help the case.

Therefore, in search of security and stability, many people have moved out of California to states with policies that could make their lives better.

California Population in the Last 5 Years 

If you look at California's demographics over the last five years, you will notice a particular trend. Since 2016, the numbers have been rising right until 2020. As can be understood, it is around this time that the pandemic set in, and this could have made the already bad situation worse.

The table below represents these statistics:

YearPopulationGrowth Rate

How Many People Left California in 2020?

According to data records, about 21,200 people moved to California between July 2019 and July 2020. This development saw a rise in population by 0.05%, spiraling the total number to 39.78 million–a record high for any state.

However, by the end of 2020, 135,600 left the state–more than the number that had moved in. This went down as the third-largest net migration loss ever recorded.

Where Are Californians Moving to in 2021? 

After leaving California, there are several other states you could run to where the cost of livelihood is cheaper and the control systems are lenient. So, what are the top places that California residents are moving to in 2021?

South Dakota

South Dakota is among the leading states with low living costs when it comes to matters concerning housing, health, transportation, and utilities. However, with all those savings, there is a lot to gain for South Dakota residents.

Here are some of the reasons why South Dakota is a suitable option for most California residents:

  • Young professionals make the most of its population
  • It is the fourth-best state to retire in
  • Affordable housing and healthcare
  • Unique dining options
  • A good education system
  • Amazing scenery
  • Short commute times


As mentioned above, the high tax rates in California have played a central role in making life in the state unbearable. This is where Texas comes in. It is the ideal runaway destination for anyone looking for a bearing in their life with no state income tax. What's not to love about keeping most of your hard-earned cash? With lower tax rates, you are more motivated to work hard.

Another reason why people are moving to Texas is because of its good economy. According to WalletHub, Texas is the 12th best state economy based on its G.D.P. growth. Additionally, in the major cities, houses have a median price of under $300,000. Owning a home here is, therefore, cheaper compared to California.

What's more? You will have vast access to sports teams, entertainment, and good food. It is never a dull day in Texas.


Some people would give everything just to have a sneak peek of famous Arizona. For starters, the Grand Canyon is in Arizona. You could go hiking in its lush green mountains or explore the deserts. 

In addition, the weather is fantastic as you can get all the sun you want.

The living cost too is low, and a house will cost you around $350,000. Lastly, this is a land of technology and you sure as hell won't feel left out. Tech companies are slowly expanding into the state and have created hundreds of job opportunities for residents.


Every person you have seen relocate into Washington had one objective–getting a job. With giants like Amazon, Microsoft, Starbucks, and Boeing spread all over the state, Washington is indeed a den of job opportunities. And what better place to start over than this?

In addition, you will love the scenery and the several outdoor activities. The no state income tax rule makes Washington an even more favorable option. While here, you do not have to worry about the money you've worked so hard for being taken away from you.


The no state income tax rule is among the hallmarks of Nevada. Here, you can save on medicine and food as the state doesn't levy sales tax on such items. While in Nevada, you could visit Reno and Las Vegas and have the time of your life. You could also go sightseeing on Mt. Charleston or opt for rock climbers. If you are a casino person, this is home away from home as you can roll the dice without worrying about getting into trouble with the authorities.


You might as well go for an adventure in Oregon State. The coastline, lakes, rivers, mountains, and dunes there are to die for. Here you do not need to pay state sales tax, and there's always someone to pump your gas!


With the state ranking 7th on the best states list, it would be wise to make a run for it. It bothers Washington D.C. to the North, and you already know what that means–you will have limitless access to all beautiful sceneries. 

Do not forget the vast job market and the learned population of Virginia.


Taking the first rank in education and the second in healthcare, Massachusetts is home to some of the most prestigious universities in the world. While here, you may attend M.I.T., Harvard, and Boston College, among others. 

The state's economy also is continuously growing, and you'll receive medical attention in the best hospitals.

New Hampshire

New Hampshire ranks first for Opportunity and Crime and Corrections. Environmental-wise, it is at number four. This is among the best states to live in the U.S. Low unemployment rates, and scenic sites are the hallmark of this paradise.

Will Relocation Save You Taxes?

Will fleeing California help save taxes for both you and your business? In many situations, the only thing that changes is the scenery while the tax bill remains the same. How California audits residency and determines taxable income plays a huge role here.

You may move to another state only to realize that you will still be required to pay California income tax. How does this come to be? Two individual income tax principles come out to play here. First, a state can tax a resident the whole of their worldwide income. Second, it could also tax non-residents on income derived from sources in the state.

How do tax laws work for relocated businesses? If your business moves its employees and facilities outside California without making changes to the mix of California v. non-California sales, its California tax bill will likely remain static.

Can You Avoid California Taxes by Moving?

California state law defines a resident as someone that meets any of the following:

  • Staying in California for purposes other than transition and temporality
  • Domiciled in California but outside the state for transitory or temporary purposes

Even though you may have connections to other states, if your stay in California isn't for transitory or temporary purposes, you are still deemed a resident. 

And to make it clear, a California resident will pay income tax to the California state. This means that no matter where you are, the income you generate will always be subject to taxation by the California state.

Establishing Virtual Residency in South Dakota for Tax Purposes 

Establishing South Dakota residency has its perks. If you are a full-time RVer, expat living abroad, or just seeking to save on your taxes, a South Dakota address is the perfect place to start. 

To pull these off, you will need email forwarding services.

Here are some of the things you get to enjoy with South Dakota residency:

  • No pension tax
  • No intangible investments tax
  • Affordable motor insurance rates
  • Affordable vehicle license fees
  • No vehicle inspections
  • No state income tax
  • No state inheritance tax
  • No personal property tax

How Long Do You Have to Live in South Dakota to Claim Residency?

Claiming residency in South Dakota isn't as hard as you may think. All you need to do is spend at least a night there, and boom! You are officially a resident. Of course, you could spend the night anywhere, whether in a campground under a million stars or a five-star hotel. Whatever the case, the experience will be memorable.

As you enjoy your stay, you will be required to document it before obtaining residency. The accommodations will hand you a receipt listing your name and new P.M.B. address. This will come in handy as you apply for an S.D. driver's license.

How Do I Become a South Dakota Resident for Tax Purposes? 

Here is a step-by-step procedure on how to establish residency in South Dakota and save on your taxes.

Step 1: Find a Mail Forwarding Service

This is the first and most crucial step in establishing your residency. You need only reach out to America's Mailbox, where you will get help to set up your personal mailbox. This way, you can proceed with the rest of the steps.

Americas Mailbox offers both traditional and digital mail forwarding services to help preview your messages. Whatever your needs, they've got you covered. Once you have filed all the necessary paperwork, the mail forwarding company gives you a physical street address to use as a residence address. Then, they receive your mail for you and send it to you when you request it.

One thing that stands out for America's Mailbox mail forwarding company besides its expansive pool of services is the competitive prices. Also, they will walk you through every step of your residency journey and explain any concerns you may have. The customer care team too is friendly and very helpful.

Step 2: Get Your Paperwork Notarized

After signing up with America's Mailbox, the next step is signing and notarizing the forms they will have sent to you via online or email. For South Dakota, a notary is only needed for Vehicle Registration. Americas Mailbox can assist you with the Notary.  In situations where vehicle registration isn't needed, there may just be one form that requires filling. 

Step 3: Book an Appointment with DMV.

If you are sure about the time you will be in South Dakota, it is wise to schedule an appointment with the DMV in advance. This way, you can avoid any delays that may be COVID-related. In addition, you shouldn't worry about taking any test if you have a license in another state.

Another important thing you should remember is that everyone applying for the residency must be present during the appointment. Unfortunately, many people make the mistake of assuming that their presence means they can represent their whole family, which isn't the case.

Also, you do not need to set up residency for the younger kids. You can do so for those aged 16 and above, but it isn't necessary for those below that age.

Step 5: Spend the Night in South Dakota

As aforementioned, you need to spend at least one night in the state to claim your residency, but here is the catch: you need to document your stay for evidence. For instance, you should have a receipt of your hotel or campground with your name and new South Dakota address on it. If you are many, ensure every person trying to get residency has their name listed. Americas Campground and Lodging offers affordable rooms and campsites to assist you with your stay.

Step 6: Go to the D.M.V.

You will be required to present the following paperwork to the South Dakota D.M.V.:

  • A receipt showing mail service agreement
  • Original CERTIFIED birth certificate or passport
  • Driver's license from your previous state
  • A mailpiece containing your name
  • Receipt documenting your one-night stay
  • Proof of complete Social Security number
  • Evidence of CERTIFIED name change in cases where you've taken a new identity
  • Notarized residency affidavit

Step 7: Get Your New South Dakota License Plates

This is the easiest step of them all. All you need to do is visit Americas Mailbox in South Dakota. Then, with everything set, you can set apart time to explore the beautiful state.

Although taxes levied by the government play a huge role in developing numerous sectors, excessive taxation doesn't appeal to anyone. If the authorities can't find a way to strike a balance, the result will be people fleeing, just like what is happening in California. 

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