Why Texas attracts high earners
Zero state income tax means a $200K Austin engineer keeps roughly $11,000–$13,000 more annually than the same person in California, even before considering RSU and bonus differentials. The trade-off is property tax — Texas averages 1.6–2.2% of assessed value vs. California's Prop 13 cap.
The Austin / Houston salary gap
Big Tech in Austin pays 10–15% less than Bay Area at the senior level, but the tax + cost-of-living arbitrage usually nets positive above $180K base. Below that, the gap narrows fast.
Sales tax reality check
Texas combined sales tax averages 8.25%. On a typical household spending $50K/year on taxable goods, that's $4,125 — meaningful but still less than what CA income tax would charge at the same income.
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Read the guideFAQ
Does Texas tax bonuses or RSUs?
No state income tax means no state tax on bonuses or RSU income either. Federal supplemental withholding (22% under $1M, 37% above) still applies.
What about Texas property tax?
Texas property tax averages 1.6–2.2% of assessed value annually — among the highest in the US. Factor this into your effective tax burden if you own.
Do I owe Texas tax if I work remotely for a CA company?
If you're a Texas resident working remotely, you owe Texas (nothing) on wages — not California. Make sure your employer's payroll is set to TX, not CA, to avoid double withholding.
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