Alberta to Texas: The Tax Side of Two No-Income-Tax-Adjacent Jurisdictions

Alberta to Texas is the busiest energy corridor on the continent, and it is easy to describe wrongly as a move from one low-tax jurisdiction to another. Alberta has no provincial sales tax and Canada's lowest top provincial rate; Texas has no state income tax. But Alberta's combined top rate is about 48% (federal plus provincial), the departure tax applies on the way out, Texas charges some of the highest property taxes in the US, and the US federal return, FBAR, and TFSA rules apply regardless of state.

Key takeaways

• Alberta's combined top rate of about 48% sets the departure tax. On a $300,000 unrealized gain, about $72,000.
• Texas has no state income tax; US tax is federal only, topping out at 37%.
• Alberta's 5% GST becomes 8.25% sales tax in the major Texas cities.
• Texas property tax runs 1.6% to 2.2% of assessed value; file the homestead application after you move in.
• AHCIP ends on permanent departure. The TFSA loses its tax-free status; close it before crossing.

The Alberta departure

Departure tax applies to non-registered investments, private company shares, crypto, and foreign property at fair market value on the departure date. Alberta real estate, RRSPs, TFSAs, and pensions are excluded. Report on Form T1243, list holdings on Form T1161 if the total exceeds $25,000, and post security under Form T1244 for illiquid assets. At about 48%, Alberta's effective exit rate on gains at the top bracket is roughly 24 cents on the dollar, the lowest in Canada.

A Calgary or Edmonton professional or holding corporation is deemed sold on departure, loses CCPC status when its controlling shareholder ceases to be a Canadian resident, and becomes a US controlled foreign corporation with Form 5471 filings and potential GILTI inclusions. Winding it up and paying the capital dividend account while still an Alberta resident is usually the cleaner path.

Texas's side

No income tax; property tax at 1.6% to 2.2% effective, with a homestead exemption on school district taxable value and a 10% annual appraisal cap; 8.25% sales tax in Houston, Dallas, Austin, and San Antonio; franchise tax on businesses above a multi-million-dollar revenue threshold; no estate tax; strong homestead creditor protection.

The RRSP and TFSA

The RRSP is untouched on departure, federally deferred under Article XVIII of the treaty, with no Texas layer. Withdrawals face 25% Canadian withholding on lump sums, 15% on periodic RRIF payments within the treaty limit, with a US foreign tax credit. The TFSA is different: no departure tax, but it loses its tax-free character the day you become a US person and may be treated as a foreign trust with Form 3520 filings. Most clients drain it before they cross.

US federal side

Dual-status return in the arrival year, FBAR on Canadian accounts above $10,000 aggregate, Form 8938 above thresholds, and Form 5471 for any surviving Canadian corporation. Equity compensation vesting after the move is split by working days between Canada and the US.

Who makes this move

Calgary energy executives and engineers to Houston, Alberta finance professionals to Dallas, Calgary software and data talent to Austin, and Alberta cybersecurity and defence staff to San Antonio.

Worked example

A Calgary energy executive moves to Houston on June 30 with $400,000 of unrealized gain in a non-registered account, $1 million in an RRSP, a $120,000 TFSA, a holding company with $500,000 of investments, and a Calgary home sold in the departure year.

• Departure tax. $400,000 gain, $200,000 taxable, at about 48%: roughly $96,000, plus the holding company shares.
• Holding company. Wind up before June 30 or accept Form 5471 in the US.
• TFSA. Withdrawn before departure; no Canadian tax; avoids the foreign trust problem.
• Home. Sold as a resident under the principal residence exemption.
• RRSP. No tax on departure; periodic withdrawals later at 15%.
• Houston. No state income tax. GST 5% becomes sales tax 8.25%. Property tax on a $900,000 home around $17,000 before homestead.

Official sources

"When you leave Canada, you are considered to have sold certain types of property (even if you have not sold them) at their fair market value (FMV) and to have immediately reacquired them for the same amount. This is called a deemed disposition and you may have to report a capital gain (also known as departure tax)." — Canada Revenue Agency, Leaving Canada (emigrants), https://www.canada.ca/en/revenue-agency/services/tax/international-non-residents/individuals-leaving-entering-canada-non-residents/leaving-canada-emigrants.html

"Texas imposes a 6.25 percent state sales and use tax on all retail sales, leases and rentals of most goods, as well as taxable services. Local taxing jurisdictions (cities, counties, special purpose districts and transit authorities) can also impose up to 2 percent sales and use tax for a maximum combined rate of 8.25 percent." — Texas Comptroller of Public Accounts, Sales and Use Tax, https://comptroller.texas.gov/taxes/sales/

"(2025 tax brackets) Up to $60,000 — 8%; $60,000.01 to $151,234 — 10%; [...] $362,961.01 and up — 15%." — Government of Alberta, Personal income tax, https://www.alberta.ca/personal-income-tax

Practitioner note

Alberta clients sometimes decide the move is 'not worth planning' because both ends are low-tax. The departure tax forms, the corporate exposure, the TFSA, and the first-year US filings are identical to an Ontario move; only the rate is different.

See also: Calgary to Austin: The Energy-to-Tech Pivot and Zero State Income Tax · Calgary to Dallas: Energy, Land Wealth, and One of the Cleanest Rate Drops on the Map · Calgary to Houston: Same Industry, Two Tax Systems, and Zero State Income Tax · Calgary to San Antonio: Energy, Military, and the Smallest Rate Drop in Texas. Browse every corridor by city, province, and state.

Next step

Fairlight prepares the Alberta departure return, the corporate wind-up, and the first-year US return for Texas clients. See cross-border pricing or book a call.