Alberta to Washington State: No Income Tax, a Capital Gains Excise, and the Energy-to-Tech Corridor

Calgary's engineers and data scientists are landing at Amazon, Microsoft, and Boeing, and the move from Alberta's combined top rate of about 48% to Washington's zero state income tax is a clean cut on salary. It is less clean on equity. Washington's capital gains excise applies to large stock sales, and for a tech worker with a concentrated RSU position it can exceed what Alberta would have charged on the same gain.

Key takeaways

• Alberta's roughly 48% top rate sets the departure tax. On a $300,000 unrealized gain, about $72,000.
• Washington has no income tax on wages or ordinary investment income.
• Washington taxes long-term capital gains above roughly $270,000 a year at 7%, plus 2.9% above $1 million. Retirement accounts and real estate are exempt; stock and RSU sales are not.
• Alberta's 5% GST becomes about 10.35% sales tax in Seattle.
• Washington's estate tax exemption is about $3 million; Alberta has no estate tax.

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. A Calgary corporation is deemed sold and becomes a US controlled foreign corporation after the move; wind it up before departure. AHCIP ends on permanent departure.

The excise comparison

Alberta taxes a capital gain at half inclusion and 48%, an effective 24%. Federally the US taxes long-term gains at up to 20% plus the 3.8% net investment income tax. Washington adds 7% above the threshold and 9.9% above $1 million. A $500,000 gain realized in Alberta costs about $120,000. The same gain realized as a Seattle resident costs about $119,000 federally plus roughly $16,000 of Washington excise on the portion above the threshold. On very large gains the Washington number exceeds Alberta's. Realizing before departure, or spreading sales across years to stay under the threshold, are the levers.

Washington's side

No income tax; capital gains excise as above; sales tax about 10.35% in Seattle; B&O gross receipts tax on businesses and consultants; property tax near 1% in King County; estate tax with an exemption near $3 million and rates to 35%.

The RRSP in Washington

Untouched on departure, federally deferred under the treaty, no state income tax to break the deferral, and exempt from the capital gains excise as a retirement account. Withdrawals face 25% Canadian withholding on lump sums, 15% on periodic RRIF payments within the treaty limit, with a US foreign tax credit.

Who makes this move

Calgary software engineers and data scientists to Amazon, Microsoft, and the Seattle startup scene; Alberta aerospace engineers to Boeing; and energy-sector analysts into Seattle's clean-energy and cloud-infrastructure firms.

Worked example

A Calgary data scientist moves to Seattle on May 31 with $200,000 of unrealized gain in a non-registered account, $400,000 in an RRSP, RSUs vesting quarterly after the move, and a Calgary home sold in the departure year.

• Departure tax. $200,000 gain, $100,000 taxable, at about 48%: roughly $48,000.
• Home. Sold as a resident under the principal residence exemption.
• RRSP. No tax on departure; exempt from the excise.
• RSUs. Vests are ordinary income split by working days; subsequent sales above the threshold face the 7% excise. Sell in tranches.
• Seattle. No state income tax. GST 5% becomes sales tax 10.35%.

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

Washington's capital gains tax is a "7% tax on the sale or exchange of long-term capital assets"; "The standard deduction for 2025 is $278,000." — Washington State Department of Revenue, Capital gains tax, https://dor.wa.gov/taxes-rates/other-taxes/capital-gains-tax

Alberta's top personal income tax bracket: "15%" on "$362,961.01 and up" (2025). — Government of Alberta, Personal income tax, https://www.alberta.ca/personal-income-tax

Practitioner note

Alberta-to-Seattle is a two-line file: salary, which is a clean cut, and equity, which is not. We build the RSU sale schedule against Washington's annual threshold before the move, and where the gain is already large we look at realizing it in Alberta.

See also: Weighing Florida instead? See the Canada-to-Florida guide.

Next step

Fairlight prepares the Alberta departure return, the equity timing plan, and the first-year US return for Seattle-area clients. See cross-border pricing or book a call.