California residents, businesses consider bailing on Golden State over taxes

[Xithras]

44. Define "top producer"

The wineries making real money are the supermarket-grade producers, and they aren't going to care much about trucking their juice a few hours up the freeway. Many of these producers ALREADY truck their juice (and even their pre-crush harvest) hours away from their harvest sites for processing. I know for a fact that DFV trucks grapes from as far as Fresno for bottling.

Smaller wineries certainly wouldn't do this, but smaller wineries generally don't generate enough profit to justify relocating out of state anyway (if you're not paying a lot of taxes, you aren't going to run to another state to avoid them). Bigger wineries would do this in a heartbeat if they thought it would make them money.

Besides, you're missing one very important point. It's not actually neccesary to ship the juice or winemaking equipment anywhere. I was simply giving an example. The winery merely needs to locate its corporate headquarters in another state, and then assign ownership of its California properties to that company. The vineyards, winemaking equipment, and even the caves and barrels can be located in California...heck, you can even keep the tasting room open for tourists...but all of those things would simply be the property of an out-of-state corporation. Under our tax rules, they would only be liable for income taxes generated on sales within California itself, and for property taxes on the land.

This is nothing new. Lockheed, Arco, Hilton...tons of companies have moved their headquarters out of California while keeping ownership of facilities here. Doing this slashes the amount of taxes they pay with little impact on their operations. There is ZERO reason why a winery couldn't do the same thing.

Of course, if you define "top producer" in terms of quality, then you're 100% right. You're never going to see some of the quality producers like David Arthur or Allora pushing their stuff through Nevada, but if you don't think that any of the already-corporate wineries (Mondavi, Diageo, etc) wouldn't do so to save a few bucks, you're kidding yourself.