Why Canadians Choose Florida: State Tax Compared
No income or estate tax, the comparison with other states, the offsetting costs, and the departure
Reviewed by the Fairlight Accounting cross-border tax team — U.S. & Canadian Tax Desks
For Canadians moving to the United States, Florida's appeal is partly climate and partly tax: no personal income tax and no estate or inheritance tax, so a Florida resident pays only federal income tax. In New York, California, or Massachusetts, top state income tax rates run from 9 to 13.3 percent. Federal tax and the Canadian departure apply anywhere.
On this page
State comparison (2026)
| State | Top personal income tax rate | Estate or inheritance tax |
|---|---|---|
| Florida | None | None |
| Texas, Nevada, Washington | None (Washington taxes long-term capital gains at 7 percent, 9.9 percent above US$1 million, and has enacted a 9.9 percent tax on income over US$1 million starting in 2028) | Washington has an estate tax (US$3 million exclusion from July 1, 2026) |
| New York | 10.9 percent (income over US$25 million), plus New York City tax for city residents | Estate tax |
| California | 13.3 percent (including the 1 percent surcharge on income over US$1 million) | None |
| Massachusetts | 5 percent, plus a 4 percent surtax on income over US$1,107,750 (2026) | Estate tax |
| Arizona | 2.5 percent flat | None |
What offsets it
Property taxes (higher on non-homestead property — the homestead guide), homeowners and flood insurance (substantially higher in many coastal areas), and sales tax (the what taxes Florida residents pay guide).
What doesn't change
Federal income tax on worldwide income once resident, the Canadian departure tax and the Article XIII(7) election, PFIC and TFSA issues, and the treaty's pension rules — all apply wherever in the U.S. you live (the pre-immigration planning guide).
Frequently asked questions
Why do Canadians move to Florida?
For many, the climate and community — and no state income, estate, or inheritance tax.
Do I pay state tax on my RRSP withdrawals in Florida?
No — Florida has no income tax; federal tax and Canadian withholding still apply.
Is Florida cheaper than Ontario for taxes?
For income tax, usually yes — but compare property tax and insurance costs too.
Does moving to Florida change the Canadian departure tax?
No — the departure tax applies wherever you move.
Official sources
The Florida Department of Revenue explains: “Florida does not impose a personal income tax, so there are no filing requirements.” — Florida Department of Revenue, Do I have to file a personal income tax return in Florida?, https://floridarevenue.com/faq/Pages/FAQDetails.aspx?FAQID=1466
Next step
Fairlight Accounting is a cross-border accounting and tax practice with a U.S. Tax Desk and a Canadian Tax Desk. Our U.S. Tax Desk and Canadian Tax Desk handle relocation tax planning for Canadians choosing a U.S. state, and first-year U.S. and Canadian departure returns. See pricing or book a call.
Cross-border taxes, handled in one place
U.S. and Canadian filings prepared together by our U.S. and Canadian Tax Desks.
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