[stouset]

It's not really weird. California has a huge problem with people coming here to strike it rich, doing so, then abandoning the state in order to avoid taxes on the money they made while working here.

They're not exactly out of line in asserting that you earned that income while living in the state, even if you "happen" to move elsewhere just before selling your ISOs/RSUs.

[hamburglar]

But if you move somewhere else before they vest, you earned the money on the vest date, not the grant date. My four year grant is not “earned” the day I sign it. It’s incentive for four years of work.

[ojbyrne]

My reading of the tax code in California is that the tax is pro-rated over the time you were resident in CA. E.g you get a grant with a 4 year vest in California and move away after 1 year: 1st year California gets all the calculated tax, second they want 1/2, 3rd year 1/3, 4th year 1/4. Roughly like that (it’s actually counted in days).

[stouset]

Yes, but as far as I know that’s not the type of situation CA is generally chasing people down over. Maybe there are exceptions but I do agree with you that in typical situations it should be about when the equity vested, not when it was granted.

[loeg]

Unvested grants aren't income. California is wrong. This is just a middle finger to people leaving the state, a group that conveniently happens to have no representation in the state government.