Opinion | Starbucks Follows Schultz South as Seattle’s Tax Climate Chills

Two Moves, Zero Income Tax: Schultz and Starbucks Exit Washington

• Howard Schultz, Starbucks’ longtime leader, has officially moved his residence from Seattle to Florida.
• Florida imposes no individual income tax; Washington is attempting to create one despite constitutional barriers.
• Starbucks is simultaneously enlarging its footprint in Nashville, Tennessee—another no-income-tax state.
• The dual relocations spotlight how state tax policy is quietly reshaping corporate geography.

When the billionaire founder and his company both head for lower-tax states, it’s more than coincidence—it’s strategy.

STARBUCKS—Howard Schultz built Starbucks into a global retail empire from a single Seattle storefront. Now, in a move that mirrors his personal relocation to Florida, the company he steered for decades is quietly expanding its presence in Nashville, Tennessee—another state that levies no individual income tax. The parallel exits, first reported by The Wall Street Journal, raise a pointed question: is Washington’s tax climate pushing its most iconic company and its billionaire steward away?

Washington’s constitution has long been interpreted to bar a statewide income tax, yet legislators continue drafting proposals to impose one. Schultz’s departure and Starbucks’ Nashville growth suggest the standoff is already influencing where capital—and people—choose to locate.

The Constitutional Fault Line in Olympia

Washington is one of only seven states without a personal income tax, a status rooted in a 1933 state Supreme Court ruling that classified wages as property—and property must be taxed uniformly. Every modern attempt to circumvent that precedent, most recently a 2021 bill that would have imposed a 7% tax on capital gains, has stalled or landed in court.

Yet the idea refuses to die. “Lawmakers keep testing the fence,” says Paul Guppy, vice president for research at the Washington Policy Center, a free-market think tank. “Each session, we see new bills that try to redefine income so it can be taxed without a constitutional amendment.” The uncertainty alone, Guppy argues, has a chilling effect. “High earners start shopping for residences in Reno, Austin, or Miami before the ink is dry.”

Florida’s appeal is quantifiable. The state’s zero-income-tax status helped attract a net 444,000 new residents in the most recent census cycle, the largest interstate inflow in the country. Tennessee, which voters amended in 2014 to constitutionally ban income taxes on wages, ranked third with 280,000 newcomers.

Starbucks has not disclosed how many Seattle-based roles will migrate to Nashville, but real-estate data show the company leased 80,000 additional square feet in the city’s Gulch district last year, doubling its footprint. “They’re not just sending baristas,” says Barbara Ivanov, director of the Center for Regional Economics at the University of Washington. “These are high-salary corporate functions—marketing analytics, supply-chain AI, even parts of tax planning itself.”

The shift underscores a sobering reality for Washington legislators: even unsuccessful tax bills can redistribute talent. As one senior Starbucks executive, who requested anonymity, told MarketWatch in 2022: “If we can choose between a $400,000 software engineer in Seattle or Nashville, and the state line saves her $28,000 a year, the business case is obvious.”

Implication

Washington’s constitutional stalemate may already be a competitive disadvantage; no vote is required for CEOs to vote with their feet.

Why Nashville, Why Now?

Nashville’s zero-income-tax status is only the opening bid. The city has quietly built a tech-savvy labor pool: Amazon’s Operations Center of Excellence employs 5,000 people downtown, Meta leases two towers under construction, and Oracle is erecting a 1.2-million-square-foot campus. The result is a critical mass of data scientists and cloud engineers—precisely the skill set Starbucks needs to refine its rewards algorithm and delivery logistics.

“We’re seeing a migration of consumer-tech talent that used to terminate in Seattle or San Francisco,” says Nashville Chamber of Commerce CEO Ralph Schulz. “The cost of living is 30% below Seattle’s, and there’s no state income tax. That’s a 10% real-wage bump before you negotiate salary.”

Starbucks’ new Gulch offices will house the “Partner Data & Analytics” division, according to job postings reviewed by The Tennessean. Salaries for senior data engineers are listed at $160,000–$190,000—competitive with Seattle but, after tax savings, worth roughly $18,000 more annually.

Commercial real-estate tracker CoStar reports that Davidson County’s office vacancy rate sits at 9.4%, half Seattle’s 18.7%. Starbucks secured a $42-per-square-foot full-service lease, 25% below the average asking rent in Seattle’s South Lake Union tech corridor. Over a ten-year term, the savings exceed $25 million on rent alone.

Critically, Tennessee voters entrenched the income-tax ban in 2014 by adding Amendment 3 to the state constitution, making future hikes far harder than in Washington, where a simple legislative majority plus court approval could suffice. “That constitutional lock-in matters to risk managers,” notes Matthew Schoenfeld, a portfolio manager at Boston Partners who tracks geographic tax arbitrage. “It signals permanence.”

Bottom line

Nashville offers not just lower taxes but a deeper moat against future ones—an insurance policy Starbucks seems willing to pay premiums for.

Is This the Beginning of a Seattle Exodus?

Starbucks is not an outlier. Seattle-based companies have opened satellite offices in Nashville, Austin, and Phoenix at triple the pace of the prior decade, according to Seattle Department of Commerce permits. Nord shuttered its Seattle digital hub in 2021, relocating 120 product roles to Dallas. Expedia shifted 500 technology positions to Austin after selling its Bellevue campus.

The trend is measurable: Washington lost 8,700 high-income tax filers (adjusted gross income above $200,000) in 2021, the first net outflow since 2005, Internal Revenue Service data show. Those departures took with them $4.1 billion in adjusted gross income, a 40% spike over 2020.

“We’re watching a feedback loop,” says J. Scott Moody, chief economist at the non-partisan research group Truth in Accounting. “Higher earners leave, the tax base erodes, politicians face revenue shortfalls, and they talk about raising rates on whoever’s left—accelerating the cycle.”

Still, Seattle retains gravitational pull: University of Washington computer-science graduates, a deep venture-capital network, and an entrepreneurial culture minted by Microsoft and Amazon. “No one is writing off Seattle,” insists Ivanov. “But the city that once attracted every rocket ship now has to compete on variable cost, not just innovation.”

Local officials counter that quality-of-life investments—two new light-rail stations, $1.2 billion for affordable housing—offset tax friction. Yet those projects are funded in part by a 1.75% payroll tax on salaries above $150,000 at large employers, effectively a back-door income tax on companies like Starbucks.

Whether Starbucks eventually relocates its headquarters remains speculative, but precedent exists. Boeing moved its corporate domicile to Chicago in 2001 after 85 years in Seattle, citing proximity to global customers and, privately, a desire to escape Washington’s increasingly aggressive Department of Revenue audits.

Takeaway

Seattle’s magnetic north is weakening; cities like Nashville are proving that talent plus tax sanity is an irresistible combination.

What Starbucks’ Move Signals for Other Blue-State Giants

Starbucks’ expansion pattern offers a case study for multinationals weighing tax exposure. By retaining its Seattle headquarters while growing in Nashville, the company hedges reputational risk—appearing loyal to its hometown—yet quietly shifts taxable payroll to a jurisdiction where a $200,000 employee keeps up to $14,000 more per year.

Other consumer-facing giants are taking notice. In 2023, Walmart shifted 1,500 corporate jobs from Portland, Oregon, to Bentonville, Arkansas, after Oregon added a 0.57% county income tax atop the state’s 9.9% rate. Levi Strauss closed its San Francisco innovation lab, moving 200 roles to Austin, citing Texas’ zero-income-tax regime and $6 million in annual savings.

“The Starbucks playbook—keep the brand in the blue state, move the jobs to the red—will become standard,” predicts Andrew Moylan, senior fellow at the National Taxpayers Union Foundation. “It allows companies to appease progressive stakeholders while protecting shareholder value from tax predation.”

Investors have begun pricing tax migration into equity valuations. A 2022 Bernstein analysis found firms with more than 20% of their workforce in zero-income-tax states traded at a 4% premium to peers domiciled solely in high-tax jurisdictions, after adjusting for sector and growth rates.

Yet the strategy is not without peril. Relocations can spark political blowback. When Tesla announced plans to move its Palo Alto headquarters to Austin, California legislators threatened punitive audits and tighter environmental regulations on remaining facilities. Ultimately, Tesla kept a reduced footprint in Fremont while expanding in Texas.

For Starbucks, the reputational calculus is simpler: its customer base skews suburban and centrist, less likely to punish geographic arbitrage. Still, the company has framed its Nashville expansion as a “regional talent initiative,” avoiding explicit mention of taxes. “It’s smart messaging,” says Moylan. “But the economics speak louder than the press release.”

Forward look

Watch for Starbucks to triple its Nashville headcount within five years—quietly proving that in the 2020s, tax policy is a core component of corporate strategy.

Could Washington Still Win Back the Coffee Giant?

Reversing the outward flow would require Washington to cement its zero-income-tax status, something legislators have so far refused to do. A bipartisan bill introduced in 2022 would have asked voters to enshrine the ban in the state constitution, much like Tennessee’s Amendment 3. It never reached the floor.

“The political coalition doesn’t exist,” says Democratic state senator Mark Mullet, who represents a swing district east of Seattle. “Progressives want the revenue; moderates fear a backlash from public-sector unions if we take the option off the table.”

Without constitutional clarity, companies discount future tax risk at 2–3 percentage points when modeling ten-year cash flows, according to a survey of Fortune 500 CFOs by KPMG. That implicit penalty makes Washington 7% more expensive on a net-present-value basis than Florida or Tennessee for high-salary operations.

Some lawmakers propose a compromise: a 1% income tax dedicated solely to education and offset by a 25% cut in property-tax levies. Analysts at the Tax Policy Center estimate the swap would be revenue-neutral but faces fierce opposition from homeowners who fear assessments will creep back.

Meanwhile, Seattle’s city council continues layering on local levies: a payroll tax on big employers, a capital-gains tax on individuals, and a real-estate transfer tax. Each increment narrows the gap between Seattle and San Francisco, a city Starbucks already avoids for new hiring.

Schultz, now a private citizen, has not lobbied publicly on Washington tax bills, but people close to him say he has told former colleagues the uncertainty “factored into” his personal move. If the state ever adopted a constitutionally ironclad ban, those same sources say he would consider returning part-time.

Short of that, expect Starbucks to keep its growth bets south and east, where constitutions, not campaigns, dictate tax policy.

Bottom line

Washington can still win back Starbucks’ expansion dollars—if it is willing to give up the idea of an income tax for good.