The California Franchise Tax Board is preparing to audit some of the state's wealthiest former residents to determine whether they legitimately established residency elsewhere.

The Financial Times reported that the move would follow voter approval of a proposed tax on billionaires, if the measure passes.

The reviews could affect Google co-founder Sergey Brin, venture capitalist and White House adviser David Sacks, and Uber co-founder Travis Kalanick, all of whom relocated from California after the proposed tax was introduced.

The proposed fall ballot measure would impose a 5% tax on wealth exceeding $1 billion. It would apply retroactively to people who were California residents as of Jan. 1, 2026.

Brin, whose estimated net worth exceeds $270 billion, purchased a home on the Nevada side of Lake Tahoe late last year and listed Nevada as his state of residence in a campaign finance filing this year.

The Franchise Tax Board instructs auditors to determine whether a taxpayer "substantially severed his California connections upon his departure or whether he maintained his California connections in readiness for his return."

Investigators may review where a person's children attend school, where vehicles are registered, and where the individual maintains bank accounts, has physicians and veterinarians, and maintains other personal ties.

Aligned Wealth co-founder Pat Dwyer said residency disputes often become lengthy legal battles.

"Residency is murky and California are really tough, along with New York, in looking at more than just time spent in the state to decide whether you really live there," Dwyer told the Times, adding, "It's like a game of chess, your lawyers against their lawyers, and it'll end up in court."

Darien Shanske, a professor at the University of California, Davis, School of Law, said taxpayers seeking to establish residency elsewhere must demonstrate more than symbolic changes.

"Sending your assistant to get a driving license in Nevada,” he said, “spending Christmas at your home in Miami and writing a mean tweet about California are only moves on paper.” 

Tax attorney Alex Kugelman said that if voters approve the tax, the Franchise Tax Board "will not be afraid to try to collect it," while wealthy taxpayers are expected to challenge the measure in court.

Supporters say most revenue generated by the proposed tax would be directed to healthcare and education.