Everyone is leaving California; few are migrating here. U-Haul charges four times as much for outbound trucks and trailers as in-bound. The state has been run into the ground by a tax and regulatory climate that is the worst in America.
Breaking California residency is tough. Just getting a driver’s license and address in Nevada or Texas will not do it; you 
have to severe all social and business ties, and you had better take a moving expense deduction on the tax return.
In FTB v Hyatt, California Franchise Tax Board was held liable for $250 million dollars in punitive damages and 1.08 million dollars in a fraud judgment for bad behavior in a residency audit. FTB attempted to argue sovereign immunity under California law, but the case was in Nevada!
The Nevada Supreme Court on September 18th, 2014 did hold that the FTB is immune from the punitive damages. However the Court did affirm the $1.08 million fraud judgment against the FTB; there will be a new trial on damages for intentional infliction emotional distress. This case, which the California FTB has protracted out 11 years, is far from settled.
In 1993, the FTB began a residency audit questioning Gilbert Hyatt’s 1991 change of residence and domicile from California to Nevada. The auditor used extremely aggressive tactics, including sending letters to and speaking with the taxpayer’s neighbors, going through the taxpayer’s trash, and using other methods of discovering Hyatt’s true residence and domicile.
The result was Hyatt filing a lawsuit, alleging fraud, intentional infliction of emotional distress, abuse of process, breach of confidential relationship, and invasions of privacy. Jackpot! The Nevada jury awarded Hyatt $250 million punitive damages and $139 in compensatory damages…including $85 million for emotional distress…and attorney’s fees for the FTB’s conduct during the audit.
Hyatt could have made better choices than choosing to retire in Las Vegas. While the Nevada state regulatory agencies are reasonable, the Las Vegas audit and collection division of the IRS is the worst in America. Tax Crisis Institute does a third of it’s work in the notorious Laguna Niguel district of southern California, to put this in perspective//IRS is truly a law unto itself in Las Vegas and will often piggy back on such audits. Hyatt may regrettably be going from the frying pan into the fire.