Domestic Geo Arbitrage at $100k Income: Top City Pairs

At a $100,000 remote salary, moving from San Francisco to Austin generates a Finluxy Geo Arbitrage Net Gain of roughly $14,000 per year — and about $5,300 of that is pure state income tax that California collects and Texas does not. The cost-of-living gap does the rest of the work. Most relocation calculators stop at rent differentials and miss both halves of that math.

This analysis runs four origin-destination city pairs through the same framework: hold the $100,000 income constant, drop the cost of living, account for the state tax differential, and amortize the move. The figures below use Bureau of Economic Analysis regional price parity data for 2023 (the metro-level series released in the BEA’s December 2024 update, with the most recent state-level figures from the February 2026 release) and verified 2025 state income tax rates. The geographic arbitrage being modeled here is domestic — earning at a high-cost market’s pay scale while living in a lower-cost one — without leaving the US tax system.

The numbers at a glance

Finluxy Geo Arbitrage Net Gain by city pair, $100,000 remote income, single filer
City pair	Annual COL reduction	State tax differential	Finluxy Geo Arbitrage Net Gain
San Francisco → Austin	$11,337	$5,327	$13,997
Los Angeles → Nashville	$9,918	$5,327	$12,578
New York → Raleigh	$7,965	$1,244*	$6,542*
Seattle → Tampa	$5,258	$0	$2,591

Source: COL reduction derived from BEA Regional Price Parities, 2023 metro-area data; state tax differentials from 2025 state rates (CA Franchise Tax Board, NY Dept. of Taxation and Finance, NC Dept. of Revenue). Net Gain amortizes an $8,000 relocation cost over three years. *New York figure assumes the worker successfully sources income outside New York; see the convenience rule discussion below.

How these figures were built

The cost-of-living component starts with BEA regional price parities (RPPs), which express each metro area’s price level as a percentage of the national average. I converted the BEA’s 2023 “real value of $100” figures into implied RPPs and applied the difference to a regionally-exposed consumption basket of $55,000 — the portion of a $100,000 single earner’s spending that actually responds to local prices (housing, goods, services, transportation), as opposed to savings and federally-priced items.

RPP is a spatial price index, not a snapshot of one person’s rent. It captures the full basket of locally-priced consumption, which is why the COL reductions here run lower than the headline rent-gap numbers that dominate relocation content. San Francisco-Oakland-Berkeley carries an implied RPP near 118 against Austin’s 98 — a real price-level gap of roughly 20 points, not the 50%+ that a one-bedroom rent comparison would suggest. The BEA series is the primary public source for geographic COL differences and the one the Congressional Research Service cites for the same purpose.

State income tax was calculated separately for a single filer at $100,000 gross, using each state’s 2025 brackets and standard deduction. Federal tax is identical regardless of destination and washes out of the comparison, so it is excluded. The Finluxy Geo Arbitrage Net Gain then nets COL reduction against the tax differential, subtracts no income reduction (the premise is that the salary holds), and amortizes an $8,000 cross-country move over a three-year planned stay. A reader weighing the full framework can start with the geo arbitrage guide for remote workers before running their own numbers.

San Francisco to Austin: the widest spread

The Bay Area is the most expensive metro area in the country by BEA’s measure. San Francisco-Oakland-Berkeley posts a real value of $100 at $84.58 for 2023 — meaning a national-average dollar buys about 18% less there. Austin-Round Rock-Georgetown sits at $102.44, slightly cheaper than the national average. Run a $55,000 basket through both and the annual cost-of-living reduction is $11,337.

California’s tax adds the second layer. A single filer at $100,000 owes roughly $5,327 in California state income tax for 2025, against zero in Texas, which levies no individual income tax. The Net Gain after amortizing relocation lands near $14,000 a year. Texas recovers some of that through higher property and sales taxes if the mover buys a home, which is the standard caveat on no-income-tax states — the savings are real but partially clawed back outside the income-tax line. The deeper version of this comparison, including the homeownership offset, sits in the NYC to Austin savings breakdown.

Los Angeles to Nashville: a near-identical tax story

Los Angeles-Long Beach-Anaheim registers a real value of $100 at $86.61 for 2023, a touch cheaper than San Francisco but still well above the national line. Nashville matches Austin almost exactly on the price side at $102.64. The COL reduction comes in at $9,918 — smaller than the SF figure only because LA starts from a marginally lower price level.

Tennessee, like Texas, taxes no wage income, so the same $5,327 California tax differential applies. That parity between the two California-origin pairs is the point: the tax piece is driven entirely by the origin state, not the destination, once the destination has no income tax. Tennessee’s higher combined sales tax — among the steepest in the nation — is the offset to watch on the spending side.

New York to Raleigh: where the convenience rule bites

New York-Newark-Jersey City carries a real value of $100 at $88.91 for 2023. Raleigh-Cary sits at $102.05. The raw COL reduction is $7,965 — respectable, but the tax math is where this pair diverges sharply from the California examples, and where most coverage gets it wrong.

New York enforces a “convenience of employer” rule. If a New York-based employer keeps a remote worker on payroll and the remote arrangement is for the employee’s convenience rather than the employer’s necessity, New York taxes those wages as if every day were worked in-state — regardless of where the laptop physically sits. In May 2025, the New York Tax Appeals Tribunal upheld the rule in the Zelinsky case, rejecting constitutional challenges from a professor working remotely from Connecticut. A separate 2025 Tribunal decision sustained a New York deficiency against a couple holding Florida driver licenses and a Florida declaration of domicile, finding the remote work was still for the worker’s convenience.

The practical effect: a New Yorker moving to Raleigh who cannot establish employer necessity keeps paying New York income tax. North Carolina would tax the same income at its flat 4.25% rate for 2025 but credits the tax paid to New York, so the worker does not pay twice — they simply never escape New York’s higher rate. The tax differential collapses toward zero, and the Net Gain rests almost entirely on the cost-of-living reduction. Only if the worker genuinely sources income outside New York — a new local employer, a documented employer-necessity arrangement, or self-employment — does the differential open up to roughly $1,244 (New York’s $4,952 versus North Carolina’s $3,708). Whether moving truly severs a high-tax state’s claim is its own analysis, covered for the West Coast equivalent in whether moving escapes California tax.

Seattle to Tampa: the no-tax-to-no-tax case

Washington already levies no income tax on wages, so a Seattle resident moving to Florida captures zero tax differential — both states sit at zero. Seattle-Tacoma-Bellevue posts a real value of $100 at $88.50 for 2023, and Tampa-St. Petersburg-Clearwater at $96.68, a narrower price gap than the California pairs. The COL reduction is $5,258, and after relocation amortization the Net Gain is a comparatively modest $2,591 a year.

This pair is the useful counterexample. Strip out the state tax arbitrage and domestic geo arbitrage becomes a pure cost-of-living play, and the gains shrink fast. The Seattle-to-Tampa mover is trading a high-cost coastal metro for a mid-cost Sun Belt one and pocketing the price difference — real, but a fraction of what a California-origin mover banks, because California’s income tax is doing roughly half the work in those scenarios.

What the data shows that the rent-gap framing misses

The conventional relocation pitch leads with housing: “cut your rent in half.” The BEA data says that for a $100,000 earner, the tax line is frequently the larger and more reliable lever. In the San Francisco-to-Austin and Los Angeles-to-Nashville pairs, the state income tax differential ($5,327) is nearly half the total Net Gain, and it is a known, recurring number — not a variable that depends on which neighborhood you land in or how rents move next year.

That reframing changes which moves are worth making. A move that crosses from a high-income-tax state to a no-income-tax state carries a structural advantage that a same-tax-regime move does not, even when the cost-of-living gap looks similar on a rent-comparison site. Seattle to Tampa and Los Angeles to Nashville have broadly comparable price-level gaps, but the California origin produces a Net Gain nearly five times larger — entirely because of the tax differential. The destination’s price level matters; the origin’s tax regime often matters more.

What this means at $150k and above

Everything above models a $100,000 income because that is the title’s premise, but the arithmetic compounds as income rises. State income tax is the component that scales: California’s marginal rates climb to 9.3% in the bracket that a $150k+ single filer occupies and continue upward from there, while Texas, Tennessee, and Florida stay at zero across every bracket. A household at $150,000 or $250,000 leaving California captures a tax differential several times the $5,327 modeled here, even as the cost-of-living reduction — tied to a consumption basket that does not grow proportionally with income — stays relatively flat. The higher the income, the more the tax line dominates the Net Gain, and the more a no-income-tax destination outperforms a merely cheaper one.

The threshold question for a higher earner is rarely whether the move saves money — at these income levels and these origin states, it almost always does. It is whether the income survives the move intact. The convenience of employer rule is the live risk: a New York or other covered-state employer can keep its rule applying to a remote high earner, erasing the tax half of the arbitrage entirely. Before treating a relocation as a tax event, a $150k+ remote worker should confirm how their employer’s home state sources their wages and whether their arrangement can clear the employer-necessity bar — because the difference between escaping and not escaping that rule is, in the New York-to-Raleigh case, the difference between a $6,500 and a $5,300 annual gain, and at higher incomes a far wider spread. For households weighing the international version of this calculus, where purchasing power and the foreign earned income exclusion enter the math, the framework shifts substantially; what $150k buys across ten countries covers that side, and the HCOL-to-MCOL savings math extends the domestic model to lower income bands.

Frequently asked questions

Why are these cost-of-living savings lower than rent comparisons suggest?

Regional price parities measure the full basket of locally-priced consumption — housing, goods, services, and transportation — not rent alone. Rent gaps between expensive and cheap metros can exceed 50%, but rent is only part of a household’s regionally-exposed spending. The BEA figure blends everything, producing a more accurate, and lower, real cost-of-living difference. The model here applies that blended difference to a $55,000 consumption basket.

Does moving to a no-income-tax state actually eliminate my state tax?

Only if your income is properly sourced to the new state. If your employer is based in a state with a convenience of employer rule — New York, New Jersey, Pennsylvania, Connecticut, Delaware, Nebraska, Alabama, and Arkansas apply versions of it — that state may continue taxing your wages as if you never left, unless you can show the remote arrangement serves the employer’s necessity. New York has repeatedly upheld this rule, most recently in 2025 Tax Appeals Tribunal decisions.

Do the no-income-tax states recover the money elsewhere?

Partially. Texas and Tennessee carry higher property and sales taxes than many income-tax states, and Florida relies on sales and property taxes as well. For a renter, the income tax savings land largely intact. For a homebuyer, property tax offsets a portion of the gain. The Net Gain figures here model the income tax line only; a homeownership-adjusted version would be lower in the no-income-tax destinations.

What relocation cost assumption is built into the Net Gain?

An $8,000 cross-country move amortized over a three-year planned stay, or roughly $2,667 per year. A shorter stay raises the annual amortized cost and shrinks the Net Gain; a longer stay does the reverse. Readers planning a five- or ten-year horizon should re-amortize accordingly.

Sources & References

In This Analysis hide