California loses its Fortune 500 crown to a red state as billionaire tax fears loom

Don’t mess with Texas — especially if you’re a Californian.

In a symbolic blow to the Golden State’s longstanding economic dominance, Texas has officially dethroned California as the state with the most Fortune 500 companies headquartered there.

According to the 2026 Fortune 500 list, the Lone Star State now claims 57 companies with roughly $2.8 trillion in revenue, narrowly surpassing California’s 56 companies and $2.7 trillion.

For years, California proudly held the top spot, boasting tech giants like Chevron, Tesla and Oracle. But years of high taxes, crushing regulations and aggressive cost-of-living pressures have accelerated a corporate exodus — with Texas reaping the benefits of its no state income tax (one of only nine US states that does not have it), lighter regulations and a business-friendly playing field.

The shift comes as fears grow over proposed “billionaire taxes” in California, including a controversial 5% one-time wealth tax on the state’s wealthiest inhabitants.

Several prominent billionaires, including Uber co-founder Travis Kalanick, have already relocated to Texas towns like Austin, citing the looming tax threat. Other tech moguls, like former Silicon Valley power player and Palantir Technologies co-founder Joe Lonsdale and venture capitalist David Sacks have also expanded operations or moved assets to lower-tax states.

Multiple major companies have followed suit in recent years, relocating headquarters or key operations from California to Texas cities including Dallas and Houston. Executives frequently cite lower taxes, affordable housing and fewer regulatory headaches as their primary drivers.

This marks a significant but narrow reversal of fortune between the competing states. As recently as 2025, California still led with 58 Fortune 500 companies compared to Texas’ 54.

Critics of California’s policies argue the state’s high corporate and personal taxes, combined with its housing crisis and regulatory burden, are driving away the very companies and talent that fuel its economy. Supporters counter that California remains an innovation powerhouse with unmatched talent and infrastructure.

“I say to everybody, ‘Move to California. Don’t leave. It’s the highest taxes in the world, but it’s OK,’” said Nvidia CEO Jensen Huang, according to SFGate. Nvidia remains headquartered in Santa Clara in the Bay Area.

With Texas capitalizing on California’s economic challenges and overregulated business landscape, more West Coast billionaires and corporations will likely look for friendlier pastures in the South, thus losing the economic engine that has powered it for decades.

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