The CEO of Amazon Worldwide Consumer left Seattle for Dallas just before Washington’s capital gains tax took effect.
The tax went into effect on Jan. 1 and levies a 7% capital gains tax on incomes over $250,000 per year from the sale of stocks and bonds.
The measure’s constitutionality was challenged in two lawsuits — Clayton v. Washington and Quinn v. Washington — which have subsequently merged.
Dave Clark, who has worked for Amazon since 1999, sold the 8,500 square-foot home he shares with his wife in the Seattle suburb of Medina in 2021. The house went for $14.5 million — twice the amount the couple paid for it in 2017.
Clark has over $43 million worth of Amazon stock, according to The Center Square. He is known by the nickname “the sniper” and has said he used to “hide in the shadows at warehouses seeking to catch lazy workers slacking off who he could fire,” per Fortune.
Clark relocated to Highland Park, a city in the center of Dallas, Texas, where the median home cost is over $2 million. He was promoted to his current role following Jeff Wilkes’s retirement. Many expected Wilkes to take over for founder Jeff Bezos. Amazon confirmed Clark’s move to The Dallas Morning News.
Texas is widely known for its business-friendly tax policies, affordable home prices, and lower cost of living. Many businesses have relocated to or expanded operations in the state in recent years, including Hewlett Packard Enterprises, Oracle, Pabst Brewing, State Farm, McKesson, and Deloitte
Tesla’s CEO Elon Musk and other business executives have also personally relocated to Texas, including Splunk CEO Douglas Merrit and Dropbox CEO Drew Houston.
While Texas has a 0% capital gains tax, “it does have a combined rate of 25%, which takes into consideration the Federal capital gains rate, the 3.8% Surtax on capital gains, and the marginal effect of Pease Limitations,” according to real estate and investment firm Four19 Properties.
On Feb. 4, Superior Court Judge Brian Huber of Douglas County heard arguments reading Washington’s capital gains tax.
Washington Solicitor General Noah Purcell said the court should uphold the precedent previously established by the State Supreme Court.
“Accepting their argument would require invalidating taxes that our State Supreme Court has upheld for decades,” Purcell said. “Faithfully applying precedent leads to the clear conclusion that the capital gains tax is an excise tax.”
Critics of the tax have said that it more closely resembles a graduated income tax and applies only to a certain high-income group rather than applying to everyone at a flat, uniform rate — making it unconstitutional.
A decision in the case is expected in late February.