Moving from Alberta to Washington State: Taxes, the Capital Gains Excise, and the Tech Corridor

Calgary to Seattle looks like the easiest tax move in this whole series. Alberta already runs the lightest provincial rate in Canada, no PST, just the 5% GST. Washington charges no state income tax at all. On paper, this is a straight downgrade in tax burden.

For salary and bonus income, that’s true. For a founder, an early employee sitting on vested RSUs, or anyone selling a business or a concentrated stock position, it isn’t automatic. Washington passed a 7% excise tax on long-term capital gains above a threshold, the state Supreme Court upheld it in 2023, and it stacks with whatever Alberta already taxed you on before you left. This corridor runs a lot of Calgary energy and engineering talent into Seattle, Bellevue, and Redmond tech jobs (Amazon, Microsoft, Boeing), and the RSU vesting patterns in that world are exactly where this catches people.

Why does Alberta already have the lowest tax bar in Canada?

Alberta has no provincial sales tax and a flat 15% top provincial income tax rate (formerly a bracketed system, now flat), the lowest top combined rate of any province, around 48% versus the mid-50s in Ontario, BC, or Quebec. If you’re comparing “what does my Canadian salary cost me,” Alberta is already the softest landing spot in the country. That matters here because it narrows the gap other corridors show. Moving from Ontario or BC to Washington produces a bigger jump in take-home pay than moving from Alberta does, simply because Alberta was already close to the floor.

What does departure tax look like leaving from Alberta?

The mechanics are federal, not provincial (T1161 and T1243, deemed disposition of most property at fair market value on the day you leave), so departure tax is the same computation whether you’re leaving Calgary or Toronto. What differs is the marginal rate applied to the resulting gain. At Alberta’s ~48% top combined rate versus the mid-to-high 53-54% in Ontario or BC, the same paper gain costs less in tax dollars leaving from Calgary.

• If you’re holding appreciated Canadian stock, a private company, or a rental property when you leave, that rate difference is real money, and it’s worth running before you set a departure date.
• Full mechanics: the T1161/T1243 departure tax guide.

How does Washington’s capital gains excise actually work?

Washington passed a 7% tax on long-term capital gains (assets held over a year) above an annually indexed threshold, $262,000 for 2024. It applies to gains from stocks, bonds, and business interests. It does not apply to real estate, retirement accounts (401(k), IRA), or a list of other statutory exclusions. In 2023 the Washington Supreme Court ruled it’s an excise tax on the privilege of selling an asset, not a tax on income, which is why it survived a constitutional challenge in a state whose constitution effectively bars a graduated income tax.

• Practically, if you’re a Calgary transplant with RSUs vesting over several years, most individual vesting events won’t come close to $262K in gain.
• A liquidity event, a large single-year sale, or an exercise-and-sell on a founder-level equity stake is where this becomes a live number.

Can the capital gains rules combine badly?

Yes, and this is the second corridor in this series where that happens (the first is Alberta to California). If you sell a large position after establishing US tax residency, the IRS taxes the federal long-term capital gain (15% or 20% depending on income, plus the 3.8% net investment income tax at higher incomes), and Washington adds its 7% excise on top for anything above the threshold.

• Layer those together and you can land in the high 20s to low 30s percent range on the gain, higher than what the same sale would have cost as an Alberta resident under Canada’s capital gains inclusion rate and Alberta’s flat provincial rate.
• The fix isn’t avoiding the move, it’s sequencing the sale, sometimes before you establish US residency, sometimes after, depending on where the departure tax step-up lands your cost basis.

What happens to RRSPs and TFSAs after the move?

RRSPs keep their US tax-deferred treatment automatically under the Canada-US tax treaty, and because Washington has no state income tax return, there’s no state-level add-back to worry about the way there is in states like California or New York that don’t automatically honor the treaty deferral. That’s a genuine simplification in this corridor. TFSAs get no such treaty protection: the IRS treats a TFSA as an ordinary taxable account, and depending on how it’s structured you can end up filing Form 3520/3520-A as a foreign trust. Most cross-border movers close or drain the TFSA before establishing US residency.

• Full rules: the RRSP/TFSA guide.

Does sales tax go up or down in the move?

Up, and by a lot. Alberta charges 5% GST and nothing else. Seattle’s combined state and local sales tax rate runs around 10.25%, among the highest in the US. Washington leans on sales tax and the B&O tax to fund government precisely because it has no income tax, so day-to-day spending costs more even though your paycheck isn’t taxed. Property tax runs the other direction: Washington’s effective rate sits around 1%, generally moderate compared to Alberta’s municipally variable rates, so home ownership costs can land close to a wash depending on which Alberta municipality you’re leaving.

What should a business owner know about the B&O tax?

Washington has no corporate income tax, but don’t read that as “business-friendly, full stop.” The Business and Occupation (B&O) tax applies to gross receipts, not net income, at rates that vary by business classification (typically well under 1%, but it applies whether or not you turned a profit). A business that’s thin-margin or early-stage can owe B&O tax in a year it lost money, which is a different risk profile than Alberta’s corporate tax on net income.

• If you’re bringing an Alberta-incorporated consulting practice or contracting business across the border, the B&O tax needs to go into the pricing model before day one, not after the first filing.

What happens to AHCIP health coverage after departure?

AHCIP coverage ends on the last day of the month you leave Alberta, full stop, regardless of the date within that month. There’s no proration and no grace period extension for a mid-month move. On the US side, Washington runs Apple Health (its Medicaid program) for lower-income residents, but most tech-corridor movers land directly on employer group coverage from day one at Amazon, Microsoft, or a similar employer, which is the cleanest way to avoid a coverage gap. Confirm your Washington employer’s coverage start date lines up with, or overlaps, your AHCIP end date.

• Details: the provincial health insurance guide.

How do Alberta and Washington compare side by side?

The table below puts each major tax category in Alberta against its Washington equivalent.

Category	Alberta	Washington State
Top combined income tax rate	~48%	0% (no state income tax)
Capital gains treatment	Included at federal inclusion rate, taxed at Alberta’s marginal rate	0% federal state add-on; 7% excise above $262K on long-term gains (real estate, retirement accounts excluded)
Sales tax	5% GST, no PST	~10.25% combined in Seattle
Corporate tax	Net income based	No corporate income tax; B&O tax on gross receipts
Property tax	Varies by municipality	~1% effective, moderate
Health coverage	AHCIP, ends end of departure month	Apple Health (Medicaid) or employer coverage

What’s the first filing season actually going to involve?

Your first US return is a dual-status or full-year resident return depending on when you establish residency, reporting worldwide income from your move date forward, plus FBAR and Form 8938 if your Canadian accounts cross the reporting thresholds. Washington adds no state income tax filing, which removes one full layer most cross-border movers deal with. What it doesn’t remove is the federal complexity: treaty positions on the RRSP, sourcing for a departure-year split between Canadian and US income, and the capital gains excise calculation if you have a qualifying sale. Walkthrough: the first US tax return guide.

• Moving from Alberta to Texas, the no-income-tax corridor for comparison
• Moving from Alberta to Florida, the other no-income-tax destination
• Moving from Alberta to California, the other corridor where the tax bill can go up
• Moving from Alberta to New York, the energy finance corridor into NYC
• The generic Canada-to-Washington corridor, from any province
• Moving from Ontario to Washington State, the larger volume tech corridor
• Moving from BC to Washington State, the closest-to-home version
• Calgary to Seattle, the energy-to-tech city corridor
• Canada’s departure tax, T1161 and T1243
• Leaving Canada permanently: the checklist
• RRSP and TFSA after moving to the US
• The US-Canada tax treaty explained
• Your first US tax return as a new immigrant
• Provincial health insurance when leaving Canada
• State income tax for cross-border filers

This guide is general information, not tax advice for your specific situation. Which points apply, and how, depends on your facts.