State-Level Millionaire and Wealth Taxes: A Comprehensive 2026 Landscape Review
Across the United States, we are witnessing a significant shift in fiscal policy as the ‘millionaire tax’ movement gains momentum. For high-impact clients—including dual-income professionals and service-based entrepreneurs—staying ahead of these legislative changes is essential for maintaining financial clarity and control. At Hays CPA LLC, our mission is to ‘Go Beyond Accounting’ by providing the structural insight needed to navigate these complex regulatory waters.
States are increasingly debating whether high earners, billionaires, and luxury property owners should bear a larger portion of the tax burden to fund critical sectors like infrastructure, education, and healthcare. While some of these measures have stalled, others have transitioned into law or are quickly approaching the ballot box. For our clients in Staten Island and across the globe, understanding the geographic nuances of these policies is the first step in effective long-term tax planning.
California: The 2026 Billionaire Tax Act
California remains at the forefront of aggressive tax policy with the proposed 2026 Billionaire Tax Act. Proponents have successfully gathered the necessary signatures to place a 5% one-time wealth tax on the November 2026 ballot. This measure specifically targets individuals with a net worth exceeding $1 billion, with the potential to generate tens of billions in revenue for state healthcare programs. However, the proposal has drawn significant criticism from tech leaders and even Governor Gavin Newsom, who worry it could accelerate the migration of high-net-worth individuals to lower-tax jurisdictions.
Maine: A New Surcharge for High Earners
Maine has already codified its millionaire tax into law. In April 2026, Governor Janet Mills approved a budget containing a 2% surcharge on individual income exceeding $1 million. For those filing jointly or as heads of household, the threshold is set at $1.5 million. This tax is retroactive to the beginning of the year, and it is expected to provide a significant boost to public funding, raising nearly $100 million in its inaugural year.
Illinois: Legislative Momentum Stalls
In Illinois, the push for a millionaire tax has hit a roadblock. A proposed constitutional amendment aimed to introduce a 3% tax on income over $1 million, but it failed to secure the necessary support in the state House. Consequently, this measure is unlikely to appear on the 2026 ballot, providing a temporary reprieve for high earners in the Prairie State. We continue to monitor these developments closely, as legislative appetites can shift rapidly.
New York: Targeting Luxury Real Estate with the Pied- -Terre Tax
As a firm based in Staten Island, NY, we are particularly attuned to the debates in Albany. Governor Kathy Hochul has introduced a proposal for a pied- -terre tax specifically targeting second homes in New York City with valuations of $5 million or higher. This annual surcharge is designed to capture revenue from ultra-wealthy non-resident owners who use NYC real estate as an investment vehicle. While supporters argue this is a fair way to fund city services, critics point to the potential for complex valuation disputes and legal challenges. For our clients with multi-state property holdings, this represents a significant shift in New York’s approach to luxury assets.
Washington: A New High-Income Tax Faces Legal Hurdles
Washington state, traditionally known for its lack of a state income tax, has taken a bold step by enacting a 9.9% tax on income exceeding $1 million. Governor Bob Ferguson signed the law in March 2026, with an effective date set for 2028. However, its future is far from certain. Opponents have already filed lawsuits, arguing that the tax violates the state constitution by treating income as property. This legal battle will be a major focal point for tax professionals over the next two years.
Massachusetts: The Fair Share Surtax as a National Model
Massachusetts continues to serve as a test case for millionaire taxes. Since 2023, the state has collected an additional 4% surtax on taxable income above its annual threshold. The revenue is strictly dedicated to transportation and education projects. While the collections have been robust, the ongoing debate centers on whether the tax is influencing migration patterns among the state’s top earners—a concern we often discuss with our own high-impact clients during tax strategy sessions.
Oregon and Vermont: Pushing the Boundaries of Wealth Taxation
In the Pacific Northwest, Oregon may soon see ‘The Very Rich Pay Their Fair Share Act’ on the ballot. This initiative would tax assets such as stocks, business interests, and bonds rather than just traditional income. Similarly, Vermont lawmakers are exploring a new top income tax bracket of 13.3% for the top 1% of households. If passed, Vermont would possess one of the highest top rates in the United States, necessitating meticulous multi-state tax planning for those with ties to the region.
Connecticut, Maryland, and Rhode Island: New Approaches to Net Worth
In Connecticut, advocates recently used Tax Day protests to call for a billionaire tax, though no legislation has passed yet. Maryland is considering House Bill 1238, which would establish a one-time tax on residents with a net worth over $1 billion. Meanwhile, Rhode Island has enacted what some call the ‘Taylor Swift Tax.’ Starting July 1, 2026, a 0.5% annual surcharge will apply to non-owner-occupied properties valued over $1 million that are used for fewer than 183 days a year. This specific focus on secondary residences is becoming a popular tool for coastal states looking to expand their tax base.
New Jersey: The Evolution of the Mansion Tax
Just across the bridge from our Staten Island office, New Jersey has already expanded its mansion tax framework. In 2025, the state moved away from a flat 1% tax on sales over $1 million, implementing a tiered system. Transactions exceeding $3.5 million are now subject to a 3.5% tax. This change has immediate implications for real estate investors and homeowners in the Garden State, and it highlights the importance of having an extension of your leadership team to model these costs before a sale occurs.
Hawaii and the Federal Outlook
In Hawaii, several ambitious tax hikes on capital gains and high-value homes stalled in the Senate during the 2026 session, though local efforts in Hawaiʶi County continue to target homes valued over $4 million for homelessness funding. On the federal level, Senator Elizabeth Warren has reintroduced the Ultra-Millionaire Tax Act. The proposal seeks a 2% annual tax on net worth over $50 million. While it faces steep political resistance in Washington D.C., it remains a central pillar of the national dialogue regarding wealth inequality.
Final Thoughts for High-Impact Taxpayers
The definition of a ‘millionaire tax’ is evolving. Whether it takes the form of an income surcharge, a mansion tax, or a direct levy on net worth, the trend toward higher taxes for high-asset individuals is clear. At Hays CPA LLC, we believe that technology-forward consultancy combined with professional standards is the best way to manage these shifts. If you are concerned about how these state-level changes might impact your portfolio or business structure, we invite you to explore our tax and accounting advisory services. Let us help you grow with less stress and more financial control.
Note: State tax policy is subject to rapid change. This article reflects the landscape as of April 29, 2026. For personalized advice, schedule a consultation with our team today.
The emerging patchwork of state-level wealth and millionaire taxes creates a complex web for taxpayers who maintain residences or business interests in multiple jurisdictions. Navigating these requirements demands a proactive strategy that goes beyond simple filing; it requires a deep understanding of residency audits, domicile status, and the specific tests used by states like New York and Rhode Island. For instance, the 183-day rule is a common trigger for tax residency, making precise record-keeping more important than ever. Our team at Hays CPA LLC leverages modern accounting tools to help clients monitor these metrics, ensuring that a stay at a second home does not result in an unexpected tax assessment. By integrating these state-specific nuances into a broader financial roadmap, we provide the continuity and structure necessary to protect your assets across state lines. This level of oversight ensures that your financial leadership remains informed and prepared for whichever way the legislative wind blows in the coming years.
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