Leaving California: Interviews With Californians Who Moved To Greener Pastures, Part VII

‘The stress level for running a business in Nevada is much lower.’

What could possibly make someone leave Fullerton, California for a move to Henderson, Nevada? According to our latest interview on Leaving California, “they wanted us.”

Everyone is piling on California these days, and for many valid reasons. California is always ranked as one of the worst states in the country in which to run a business, while many other states are ranked at the top of the chart. “California has it real bad, with the state’s ideal climate and digital-tech dominance simply not able to overcome CEOs’ impressions that the Golden State just doesn’t care about how expensive and difficult it is to do business there,” Chief Executive says. “So it keeps hogging the bottom of the Chief Executive list.”

“Perennial No. 1 Texas is an example.” Texas always ranks as one of the best. Chief Executive rankings show Texas in first place and California in an embarrassing last place at 50th.

Nevada ranks in the Top 10 in the nation among the top-performing states in Chief Executive magazine’s 2019 Best & Worst States for Business survey.

According to Steve Harrington, after paying more than 50 percent of his business and personal income to the State of California and federal government, he found himself unable to reinvest in product development in his company. Steve owns Retro Manufacturing, which specializes in RetroSound radios replicating the look found in classic cars, but with radio streaming, auxiliary input, Bluetooth and SiriusXM radio.

“I did not want to leave California at all,” Steve said. “The state changed. California is not very tolerant of any other opinion these days. And if you make money, you are ‘evil’ in California.”

In 2013 Steve moved his company to Henderson, NV and since 2015 his company has grown by 30 percent each year. Steve said in just the last two years, he has doubled the size of his company. “Developing new products and reinvesting bak into the company was next to impossible in California,” Steve said. “And the stress level for running a business in Nevada is much lower.”

Steve, a lifelong resident, was born and raised in California. He and his wife and kids lived in Fullerton, in North Orange County. “We had no intention to leave California,” he said. Steve’s wife was an executive with Disneyland, and his children attended local Catholic schools. When his son was in college and his daughter was finishing high school, he looked around at other states.

Tired of struggling to pay hefty income taxes on his Limited Liability Corporation in California, where business income in a LLC is taxed as personal income unless the owner files incorporation papers, “Quarterly taxes were always on my mind,” Steve said. “The 37 percent tax to the feds and 13 percent to the state was daunting.” And he said his employees struggled as well. “Our lower level employees were always one paycheck away from not making a car payment or the rent,” he added. “It’s just too expensive to live in California.”

Steve said he made a few trips to Reno and Las Vegas to compare. When he returned home, he called the Nevada state and local government agencies he needed to communicate with if he was to make the move. “They actually answered their phones,” Steve said. “They helped us. They were gracious. They introduced us to financial institutions.”

Once Steve and his wife made the decision to move to Nevada, he said the transition was made absolutely wonderful by these state and local agencies. “My LLC was done in 30 minutes!” Steve said. He noted that whenever he had to deal with California government, “it took so many man hours to get things done in California.”

Steve said wages in Nevada are close to California’s but, “the standard of living is so much better. Our entry level employees can afford to buy a house, and even go on vacations. And they don’t need to borrow money when their transmission blows,” he said.

Steve’s business is international; he works with 25 different countries. His product engineered in the U.S. and manufactured in China. “It’s better for some businesses to manufacture in China, and mine is one of those,” Steve said. “No doubt ur product would be polluting somewhere in California.”

“California didn’t care if we stayed or left, but Nevada wants me and my business here,” Steve said. “And my business is worth more in Nevada than in California.” RetroSound has had double-digit growth for several years in Nevada. “We ship 100-400 orders every day to 25 countries,” he said. “And we now spend over $100,000 per year developing new products.”

“How would I innovate paying such high taxes in California?” Steve asked. “We are also able to invest in our employees more than ever in ways we never could in California. In an environment where the government harangues you… it becomes ‘un-fun’ for me.”

Steve also noted “there’s much less traffic in Nevada. And the stress level for running a business in Nevada is much lower.’

“The point of it is there are other places that want us,” Steve said. “And we’ve got ore opportunity than ever.”

“It’s not only affordability, I get lifestyle,” Steve said. “No amount of money could bring me back to what I left in California.”

Leaving California, Part I – Texas

Leaving California, Part II – Arizona

Leaving California, Part III – Idaho

Leaving California, Part IV – North Carolina

Leaving California, Part V – Nevada

Leaving California, Part VI – Indiana