In a stunning announcement, In-N-Out CEO Lynsi Snyder is relocating to Tennessee and taking a brand new In-N-Out corporate office with her. This move follows fellow fast food chain Kentucky Fried Chicken in relocating from its hallmark or foundational location to a more business-friendly state. According to Fortune, Snyder broadly references the business environment that In-N-Out faced in California as tricky to navigate. On the flip side, Forbes ranks Tennessee as the 7th most business-friendly state in the U.S.
Despite no mention of taxes in Snyder’s interview, she and her company stand to benefit financially from relocating to a more tax-advantaged location. This article highlights three key tax benefits of In-N-Out’s move to Tennessee.
(1) Corporate Income Taxes
In 2025, the Tax Foundation shows that California taxes corporations among the highest in all fifty states, with a tax rate of 8.84%. Meanwhile, Tennessee levies a much more moderate 6.5% tax rate on corporations. While the individual locations will continue to accrue revenues and pay taxes in their respective locations (In-N-Out locations in California will still pay California corporate income taxes), profits can often be funneled toward corporate offices via operational strategic shifts (such as cost-sharing arrangements or transfer pricing). Thus, it is likely that In-N-Out will be able to benefit from paying nearly 2% less in taxes at the corporate level in Tennessee than California.
(2) Individual Income Taxes
Perhaps even more prominent in the mind of Snyder and her family-run business is the significantly lower individual income tax rates that she will face. In fact, it cannot get more extreme of a drop off than facing California’s 13.3% individual income tax rate (highest in the U.S.) to Tennessee, which is one of nine states that does not levy an individual income tax. With Snyder posting an estimated $7.3 billion net worth, according to Forbes, it can be reasonably expected that she is pulling in tens of millions of dollars annually. Going from having to pay 13.3% of this income to California to 0% to Tennessee likely reflects millions of dollars saved each year in tax payments.
However, the individual income tax benefits extend beyond those of Snyder. Corporate offices typically houses many members of the executive branch, as well as numerous high-ranking employees within the company. If these employees collectively have a lower tax burden due to not paying income taxes in Tennessee, then many important members of the company will stand to gain significant tax benefits.
(3) Investor-Level Taxes
In addition to the difference in individual income tax rates, California and Tennessee both offer the same state tax rates on investor level taxes, such as capital gains tax and dividends tax. Capital gains tax arises from income earned from investing, not unlike the ownership of a fast-food chain like In-N-Out. As the initial basis of the In-N-Out shares is likely significantly smaller than what they are worth today, Snyder is sitting on a massive potential tax bill if and when she disposes of the shares. F
As of now, Snyder has not indicated an interest in selling any part of her ownership stake in In-N-Out. However, Snyder reportedly owns 97% of the company, according to Entrepreneur. Thus, many shares can be parted with while still maintaining significant control over the company. If Snyder were to do this while being a California resident, she would owe 20% in Federal capital gains taxes plus the 13.3% California capital gains tax. For instance, if she sold enough to generate a $10,000,000 profit, her total capital gains tax bill would be $3,330,000. Meanwhile, if she had the same transaction but as a Tennessee resident, then her tax bill would be 40% less due to not having to pay state-level capital gains taxes.
Even beyond the selling of ownership, In-N-Out potentially compensates Snyder by issuing her dividends. When this happens in Tennessee, Snyder will not pay any additional tax liabilities in the state, as Tennessee does not levy a dividend tax. Meanwhile, California’s dividend tax rate is the same as its individual income tax rate (13.3%).
Some of the potential tax benefits highlighted above face the important caveat that In-N-Out is a privately held company. Consequently, the company does not disclose its financial statements publicly, providing the general public with limited tax insights into their potential tax benefits from moving from California to Tennessee. For example, it is unknown exactly how profitable In-N-Out is each year. Another example is that In-N-Out does not disclose how much it pays to it’s executives or how much dividends it issues each year.
Furthermore, Snyder has not expressed any intention of selling ownership interest in the company. However, Amazon founder Jeff Bezos made a similar move to Florida without announcing intentions of selling shares in his company. As reported by The Guardian, the subsequent sale of his shares while being a Florida resident saved him $600 million in capital gains taxes.
Lastly, it is important to highlight that Snyder is not making the most tax-savvy move on the table. In particular, In-N-Out continues to maintain a corporate headquarters in California. It could just as easily relocate the entire headquarters to Tennessee or even follow Kentucky Fried Chicken and relocate its headquarters to Texas, where In-N-Out already has 43 locations. In doing so, the company would face a 0% corporate income tax rate, rather than the 6.5% rate in Tennessee. Thus, Snyder appears to be betting on both the business-friendliness of Tennessee and the potential for larger operations on the eastern portion of the U.S.