Moving from BC to Texas: Taxes, the PST Drop, and the Tech Corridor

By Yarik Yarosh, CPA ·August 31, 2026 ·8 min read

Written by Yarik Yarosh, CPA (US & Canada) August 31, 2026 · FL CPA license AC61704 · CPA Ontario

British Columbia’s combined federal and provincial top rate runs near 53.5%, with the provincial share alone topping out at 20.5%. Texas charges nothing on top of the federal return, on any income type. That’s one of the larger drops in the entire cross-border matrix, and it draws two very different kinds of movers: Vancouver tech and VFX workers following jobs to Austin and Dallas, and retirees chasing cheaper housing and a warmer winter. Both groups hit the same departure tax on the way out, and both need to budget for a Texas property tax bill that BC never sent them.

✓Key takeaway

BC’s combined top rate is roughly 53.5%; Texas adds 0% state income tax on top of the federal return. The departure tax is assessed at BC’s rates before that drop applies, sales tax actually falls too (BC’s 12% PST-plus-GST versus Texas’s 6.25% to 8.25%), and property tax runs the other way, roughly 0.5% to 0.7% in BC against 1.6% to 2.5% in Texas.

Why is BC to Texas one of the biggest rate drops?

Because BC starts from one of the highest combined rates in North America and Texas starts from zero. Stack the federal brackets on top of BC’s provincial rate, which climbs to 20.5% above $252,752 (2025 figures), and you land near 53.5% combined at the top. Texas adds nothing at the state level, on wages, self-employment income, capital gains, dividends, or RRSP withdrawals once you’re a resident. The gap only applies going forward from your residency change date, not retroactively to income already earned in BC.

Vancouver’s tech sector, Amazon, Microsoft, and SAP all run sizable local offices, feeds a steady stream of engineers into Austin’s tech corridor, often on direct transfers rather than open-market job searches.
Vancouver’s film and VFX industry (production houses supporting major studio work) sends a smaller but steady stream of artists and technical staff toward Austin and Dallas as US productions pull work back onto US soil.

How much does the departure tax take on the way out?

The same deemed disposition every departing province charges, just assessed at BC’s own bracket rates. Ceasing Canadian residence triggers a deemed sale of most property at fair market value, with the taxable half landing on your final T1: 50% inclusion on the first $250,000 of gains, 66.67% above that. Because BC is where you resided on your last day as a Canadian resident, that gain gets taxed at BC’s rates, provincial share up to 20.5%, which is part of why this corridor’s departure bill tends to run higher than a similar move out of Alberta.

The forms and worked math for the deemed disposition sit in the T1161 and T1243 guide.
A security-for-tax election can defer payment of the departure tax itself; it doesn’t reduce the liability, and the mechanics are in deferring departure tax.

Hypothetical example

Invented numbers. A Vancouver VFX supervisor in his late thirties takes a lead role at a studio expanding in Austin. Before he leaves, his non-registered brokerage account carries C$300,000 of unrealized gains, mostly tech and index holdings built up over a decade. On departure, deemed disposition applies: C$250,000 at the 50% inclusion rate and C$50,000 at 66.67%, producing roughly C$158,350 of taxable capital gain on his final T1, taxed at BC’s combined rates. In Austin, his new salary is taxed federally only, no state layer at all, and the sales tax on everything he buys drops from BC’s 12% to around 8.25% in most Austin suburbs. He buys a $650,000 home and discovers a property tax bill running $11,000 to $14,000 a year, split across school district, county, and city levies, something his Vancouver condo never charged him directly in that form. None of this is estimated against his real numbers; it’s here to show the shape of the calculation.

Illustrative numbers only, not a real client and not advice for your facts.

What happens to sales tax and property tax?

Sales tax drops, property tax rises, and the two don’t offset evenly. BC combines 7% PST and 5% GST for a 12% combined rate on most purchases. Texas runs 6.25% at the state level plus up to 2% local, usually landing between 6.25% and 8.25% depending on the city. Property tax runs the opposite direction: BC typically assesses 0.5% to 0.7% of value, while Texas has no cap on local levies and typically lands between 1.6% and 2.5%, among the highest ranges in the country.

Question	British Columbia	Texas
Top combined marginal rate	About 53.5%	Federal only, no state layer
Provincial/state top bracket	20.5% above $252,752	0%
Capital gains inclusion	50% on first $250,000, 66.67% above	Federal treatment only
Sales tax	12% (7% PST + 5% GST)	6.25% to 8.25% depending on locality
Property tax (effective)	Roughly 0.5% to 0.7%	Roughly 1.6% to 2.5%
State estate tax	Not applicable	None

What happens to the RRSP and TFSA?

The RRSP is the clean part of this move, precisely because Texas has no state return. Movers comparing this corridor to BC-to-California are usually surprised that California adds its own state-level tax on RRSP growth every year, treaty or not. Texas has no state filing to attach that add-back to, so the federal treaty deferral is the whole story: no distribution, no tax, until you actually withdraw, with Canadian withholding creditable against US tax through the foreign tax credit.

The TFSA gets no such pass. The US doesn’t recognize its tax-free status, and it’s treated as a foreign trust, dragging Form 3520 and 3520-A reporting behind it every year it stays open after you become a US person.
Full federal mechanics for both accounts are in RRSP and TFSA on a US move.

Does MSP coverage just stop the day you leave?

Not immediately, but the window is shorter than people plan for. BC’s Medical Services Plan continues coverage to the end of the second month after you leave the province, plus whatever period you’ve already prepaid. After that, there’s no BC coverage and no Canadian universal system behind it, so US coverage, employer-sponsored or an ACA marketplace plan, needs to be arranged before that window closes. The full timing sits in provincial health insurance and leaving Canada.

What happens to CPP and OAS after the move?

They keep arriving on schedule. Canada keeps withholding at source once you’re a non-resident, and the US taxes both benefits once you’re a resident, with the treaty crediting the Canadian withholding rather than taxing the income twice. Nothing about landing in Texas specifically changes that mechanic; it runs the same as it would in any other state, just without a state-level layer to coordinate the credit against.

Who is actually making this move?

Two distinct groups, running through the same tax mechanics. Vancouver’s tech corridor, Amazon, Microsoft, and SAP all keep large local offices, sends engineers and product staff to Austin on transfers and direct hires, while the VFX and film production side sends a smaller stream of artists and technical crew chasing US-based studio work. Separately, a steady flow of Vancouver-area retirees head to Austin and Dallas for cheaper housing, lower everyday costs, and warmer weather, accepting the property tax tradeoff as the price of the rest of it.

The Ontario-to-Texas corridor carries more finance-sector traffic; the Alberta-to-Texas corridor is dominated by energy-sector transfers between Calgary and Houston.

What should you settle before you book the move?

Two dates. The day your Canadian residence actually ends, since the deemed disposition and the BC bracket both key off it. And whether the substantial presence test already has you counted as a US resident before you intended, which happens quietly to people who extend a scouting trip a little longer than planned.

Departure tax checklist, the full Canadian exit sequence
Canada to Texas taxes, the generic corridor from any province
Quebec to Texas taxes, the biggest departure-tax rate drop in the matrix
BC to Florida taxes, the other major no-income-tax corridor from BC
BC to Washington State taxes, the closest-to-home no-tax option
BC to New York taxes, a high-tax contrast for comparison
BC to California taxes, where the RRSP gets taxed annually regardless of the treaty
US-Canada tax treaty explained, the transition-year mechanics
First US tax return as a new immigrant, what the first Texas-side filing actually requires
State income tax across corridors, the broader no-tax-state comparison
Vancouver to Austin, the city-level tech corridor from BC

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Cite this page

Yarik Yarosh, CPA. "Moving from BC to Texas: Taxes, the PST Drop, and the Tech Corridor." Blue Cloud CPA, August 31, 2026. https://bluecloudcpa.com/guides/moving-from-bc-to-texas-taxes

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