Moving from Canada to Alaska: No Income Tax, No Sales Tax, Plus a Yearly Check

Alaska is one of only two US states with neither a state income tax nor a statewide sales tax (New Hampshire is the other). It also pays residents an annual dividend from oil revenue, something no other state does. For Canadians in oil and gas, mining, fishing, or the military, Alaska is reachable by road through BC and the Yukon, not just by plane. The federal cross-border rules (departure tax, RRSP/TFSA, FBAR) are the same as any Canada-to-US move. This page covers what makes Alaska different.

What taxes does Alaska actually charge?

Tax	Rate	What it hits
Income tax	0%	Nothing. No state return filed
Sales tax	0% statewide	Some boroughs/cities add local sales tax, 2% to 7.5%. Anchorage has none
Property tax	Roughly 1.0% to 1.2% in Anchorage, similar in Fairbanks	Set by borough, varies significantly by location
Estate/inheritance tax	None	Alaska has neither
PFD	Federal income only	Annual per-resident payment, no state tax on it since there’s no state return

Compared to Alberta’s 10% to 15% provincial income tax brackets, Alaska’s zero rate on wages is a real jump. But groceries, heating fuel, and shipped goods cost more in Alaska than in most of Canada, which offsets part of the saving.

What is the Permanent Fund Dividend?

The PFD comes from the Alaska Permanent Fund, an investment account built from oil revenue since the 1970s. Every qualifying resident, including kids, gets a check each year. The amount moves with fund performance and legislative decisions, usually landing between $1,000 and $3,200 per person. It’s the one state in the country that pays its residents rather than the other way around.

The PFD is fully taxable on the federal return as ordinary income. There’s no special state treatment because there’s no state return to file. A family of four could see $4,000 to $12,000 a year in PFD income alone, all reportable to the IRS.

How does no income tax affect RRSP and retirement income?

Same effect as Texas or Nevada: only the federal layer applies, since Alaska has no state return at all.

• RRSP/RRIF withdrawals are taxed federally as ordinary income, with Canadian Part XIII withholding under the treaty (15% periodic, 25% lump sum). No state tax.
• CPP/OAS are taxed federally under treaty rules. No state tax.
• Capital gains on investment sales get federal preferential rates (0%, 15%, or 20%). No state tax, unlike Washington, which taxes large capital gains at the state level.

For a Canadian drawing $80,000 USD from an RRSP/RRIF annually, Alaska’s state tax is $0, same as Nevada or Texas. The RRSP and TFSA rules themselves don’t change by state: RRSPs get treaty deferral federally, TFSAs are a foreign trust from the IRS’s perspective and should be unwound before you leave.

Why do Canadians in oil and gas move to Alaska?

The Alaska Highway runs straight from BC through the Yukon into Alaska, and the oil, gas, mining, and fishing workforce moves along that corridor regularly. Employers like ConocoPhillips and Hilcorp (which took over much of BP’s Alaska production) recruit engineers and tradespeople who already have Fort St. John, Fort McMurray, or Grande Prairie experience. The military bases (JBER near Anchorage, Eielson and Fort Wainwright near Fairbanks) add a separate population of contractors and support workers.

Anchorage, Fairbanks, and Juneau are the three main population centers, and each has a distinct cost structure. Anchorage is the largest and has no local sales tax. Fairbanks runs colder and has higher heating costs. Juneau is only reachable by air or sea, which raises the price of everything shipped in.

What happens on the Canadian side when I leave?

The standard departure sequence applies the same way it would for any province:

• Deemed disposition at fair market value of worldwide assets
• Final Canadian return from January 1 to the departure date
• Provincial tax at your province of residence’s rates on departure day, T1161 and T1243 if applicable
• CRA non-resident notification
• RRSP left open, TFSA closed before the move

Your first US return needs to account for a part-year Alaska residency and the treaty provisions on any Canadian-source income still coming in.

How does Alaska compare to Texas, Washington, and Nevada?

All four have no state income tax on wages, but the details differ. Texas and Nevada have no state income tax and no PFD, funded instead by sales and property tax. Washington has no wage income tax but does tax large capital gains at the state level, something Alaska doesn’t do at all. Alaska is the only one of the four that pays residents a yearly dividend, and the only one where a statewide sales tax doesn’t exist (some Alaska boroughs charge local sales tax; Texas and Washington both have meaningful statewide sales tax). Montana is a useful non-comparison: it has no sales tax either, but it does tax income.

What should I do next?

The Canadian exit follows the standard departure checklist regardless of which state you land in. On the Alaska side, confirm your borough’s local sales tax rules if any apply, register for the PFD once you meet the residency requirement, and get your RRSP and TFSA handled before departure.

• Departure tax checklist, the full Canadian exit sequence
• US-Canada tax treaty explained, how income gets allocated between the two countries
• RRSP and TFSA on a US move, federal treatment and reporting
• Your first US tax return, what a part-year move looks like
• State income tax for cross-border filers, how Alaska compares
• T1161 and T1243, the Canadian departure forms
• Alberta to Texas, another no-income-tax oil corridor
• BC to Washington State, the state capital gains tax comparison
• Canada to Nevada, no income tax without the PFD
• Canada to Montana, no sales tax but income tax does apply

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