Texas has reclaimed its position as America’s top destination for domestic migrants, according to U-Haul’s latest data, reinforcing a persistent trend in which Americans relocate from high-tax coastal states to jurisdictions with lower tax burdens and relaxed regulatory environments.
The moving company’s 2025 data, compiled from over 2.5 million one-way rental transactions, shows Texas leading the nation for the seventh time in a decade, with Florida, North Carolina, Tennessee, and South Carolina rounding out the top five.
California, meanwhile, remains at the bottom for an unprecedented sixth consecutive year, though its net loss showed modest improvement compared to 2024.
Joining California at the bottom of the rankings are Illinois, New Jersey, New York, and Massachusetts, all experiencing significant outbound migration.
The Tax Dimension
The migration patterns suggest a correlation between state tax policy and population movement. Among the ten states experiencing the greatest inbound migration, the average top personal income tax rate stands at 3.5%.
The bottom ten states, by contrast, average more than double that rate, at 7.2%.
Three of the top four destinations, Texas, Florida, and Tennessee, impose no state income tax.
California, which maintains the nation’s highest top marginal income tax rate at 13.3%, continues to experience the largest outbound migration despite a slight improvement in retention compared to the previous year.
Mona Shah, Attorney and Managing Partner at Mona Shah & Associates, confirms that these patterns align with what she observes in practice.
“The data does track with what we are seeing,” Shah notes, saying that approximately seven out of ten of her US clients now reside in traditionally low-tax states, primarily Florida, Texas, and the Carolinas.
She has witnessed a notable uptick in clients who have relocated “specifically for tax advantages,” a trend that has accelerated since Covid.
Florida’s Magnetic Pull
Florida has proven particularly popular among departing New Yorkers.
“The exodus is real and significant,” says Shah, pointing to multiple direct flights daily between New York-area airports and Florida destinations as evidence of the volume of people maintaining connections between the two states.
“The most high-profile New Yorker to make this move is, of course, President Trump. But he’s hardly alone,” says Shah.
For many, particularly retirees, the move “transcends mere tax savings.” Harsh northeastern winters become increasingly difficult to endure as people age, and Florida’s climate offers “year-round comfort” that appeals to older Americans and Canadians.
“When you combine favorable weather with zero state income tax, the appeal becomes irresistible for this demographic,” she adds.
Yet, she explains the tax advantage isn’t always as straightforward as it appears.
While Texas attracts many with its absence of state income tax, some clients “have been surprised by other costs,” she reveals, giving an example of one client who was off put to discover that property taxes in Texas “far exceeded” what he’d paid in high income tax states, offsetting the tax savings and “simply shifting the tax burden from income to property.”
“For someone with significant real estate holdings, the maths didn’t make sense,” says Shah.
The Cultural Trade-Off
What economic analysis often misses, Shah argues, is the quality-of-life trade-off that comes with these moves.
“There is a reason people pay a premium to live in New York,” she explains. Access to world-class museums, theater, dining, cultural diversity, and intellectual vitality that define the city is “difficult or impossible to replicate” elsewhere.
“For many professionals and families, these intangible benefits outweigh the tax savings, particularly for those in their prime earning and child-rearing years who want to take advantage of everything a major city offers,” Shah notes.
Also, specific industries continue to anchor people in high-tax locations “despite the fiscal burden,” Shah observes, pointing to how the tech industry remains concentrated in California despite the extraordinarily high costs of living and taxation, sustained by the ecosystem, talent pool, and venture capital infrastructure.
“Finance, law, and media professionals remain tethered to New York and the tri-state area, where the industries are centered, and the professional networks are irreplaceable,” she adds.
For many professionals, even with remote work setups, relocating to a low-tax state would mean sacrificing career opportunities and earning potential that “may dwarf any tax savings.”
Emerging US Immigrant Communities in Unexpected Places
Shah points to one unexpected trend: South Carolina and similar states now “yielding more residence and citizenship-by-investment clients than traditional hubs like Los Angeles, New York, or Chicago.”
Substantial immigrant communities have taken root in these areas, often overlooked by coastal media, and Shah says they show strong interest in investor visas and second citizenship opportunities.
A recent IMI survey of Investment Migration professionals found that the number of Americans seeking second residency or citizenship has “quadrupled” over the past six years.
Whether proposed tariffs or other Trump economic policies might accelerate migration patterns remains unclear.
Shah explains that she has not yet heard clients cite trade policy as a factor in relocation decisions, reiterating that tax policy, regulatory environment, and quality of life remain the “dominant considerations” driving where Americans choose to settle.
