Toyota will move the bulk of its sales and marketing staff from Torrance, Calif., to Plano, Texas, a Dallas suburb. The move makes it only the latest example of a major company that Texas has poached from the Golden State.
Torrance's mayor, Frank Scotto, said California's regulatory and business climate made it hard to keep businesses from leaving.
"When any major corporation is courted by another state, it's very difficult to combat that," Scotto told the Los Angles Times. "We don't have the tools we need to keep major corporations here. ... A company can easily see where it would benefit by relocating someplace else."
The change will complete transformation of the Japanese carmaker's U.S. branch into a mostly southern operation. Its main factories are in Kentucky, Texas, Mississippi and Alabama. All but Kentucky are right-to-work states where unions are weaker. Taxes and regulations are lighter as well.
The Tax Foundation rated California the 48th most business-friendly state, ahead of only New York and New Jersey, according to its 2014 state rankings. The survey sited both the state's relatively high taxes as well as their complexity.
Toyota sold 2.2 million cars in the U.S. last year, 75 percent of which were built inside the states.
In February, Occidental Petroleum said it would move its Los Angeles operations to Houston. In 2005, Nissan moved the bulk of its operations from Gardena, Calif., to Franklin, Tenn.
"The costs of doing business in Southern California are much higher than the costs of doing business in Tennessee," Nissan Chief Executive Carlos Ghosn said at the time.