Annuities are one of the most diverse retirment investment products available in the marketplace. They come in all shapes and sizes. While this fact is widely known, what many people do not realize is that annuities vary greatly from state-to-state.
Buying a product with the same name from the same company in one state could yield completely different results than buying the same product from the same company in a different state.
Annuities as a whole are valued differently from state-to-state because each state has different tax laws and tax codes which can greatly influence the way a product is designed as well as how it pays out upon annuitization.
Rates, features and benefits all can vary widely based on the rules and individual tax codes of each state. Other key factors which can differ from state-to-state are free-look provisions and market value adjustments.
As a quick example, the state of California rarely offers long-term healthcare riders (long-term care supplements) which are often found in annuities issued in most other states.
Some states also have special annuity taxes beyond the normal differential in the tax rates from state-to-state.

California, Maine, Nevada, South Dakota, Wyoming and West Virginia all have what is known as a premium state tax. This charge is normally applied at the time you purchase an immediate annuity or when you annuitize an existing deferred annuity.
This tax does not exist in the other states although Florida also charges a version of the annuity premium tax. A major difference with Florida is that insurers are exempt if they can prove that they have passed the savings onto the policyholders in the state. Puerto Rico also charges the state premium tax although they are a territory as opposed to a state.
The tax rate in these instances is dependent on whether the money you are investing is qualified (IRA, 401K, 403B, etc) or non-qualified (cash, savings, etc).
For example in Nevada, the premium tax is a whopping 3.50% for non-qualified monies while the tax does not exist for qualified monies.
It is important to note that you cannot simply buy annuities in different states just because they have a more attractive rate.
Generally an annuity can only be purchased when you have a residence in that state. If you have properties in multiple states than you are often able to purchase the annuity in one of the other states; however, some states only allow you to purchase the annuity in the state where your primary residence is located.
If you live in Michigan but spend the winter months in Florida, your primary residence is generally considered to be Michigan. But exceptions can be made especially if you spend half or more than half of your time in the alternative residence.
If you are planning on moving, than it is wise to find out the tax rates in the state you live in and the one you intend to move to. Depending on the circumstances, it could be beneficial to buy the annuity prior to moving or to wait on purchasing until after you move.
The best solution is to get rate comparisions in multiple states.
This is why it is extremely important to find an advisor who has your best interest at heart and provides multiple effective strategies specifically tailored towards the client’s needs.