San Diego, California is an expensive place to live, and Machado would be no exception to that-- unless he didn't technically live in the Golden State. Machado is expected to claim residency in Florida, where he is from originally and lives during the offseason.
If Machado has a Florida driver's license and claims his residency there as well, he stands to benefit massively: the state charges zero income tax. As Jon Heyman noted above, that's $39.9 million that Machado gets to keep, which is essentially one extra year of money without having to play.
That sounds pretty sweet.
The San Diego Padres, in seeing Machado take advantage of this, are beating the Tampa Bay Rays and Miami Marlins at their own game.
This could be one of the hurdles that kept this deal from happening for so long. Perhaps Machado didn't want to pay state taxes to play in California after his time with the Dodgers and general manager A.J. Preller discovered a loophole to help bolster the Padres' pitch.
Machado stands to be the face of this franchise for years to come, and without any state income taxes to pay, he's certainly going to enjoy that to the fullest.