Moving from Canada to Nevada: No Income Tax, No Estate Tax, and Cross-Border Planning

Nevada has no state income tax, no state estate tax, and no state inheritance tax. It’s one of the most tax-friendly US states for individuals, which is why it draws Canadian retirees, real estate investors, entertainers, and increasingly tech workers (Reno’s growing corridor around Tesla, Switch, and Apple’s data center). The federal cross-border obligations (departure tax, RRSP/TFSA, FBAR, treaty elections) are the same as any Canada-to-US move. This page covers what makes the Nevada layer different.

What taxes does Nevada actually charge?

Tax	Rate	What it hits
Income tax	0%	Nothing. No state return filed
Sales tax	6.85% state + local additions (8.375% in Las Vegas / Clark County)	Retail purchases. Groceries are exempt from sales tax
Property tax	Capped at $3.64 per $100 of assessed value (assessed at 35% of taxable value)	Effective rate roughly 0.5% to 0.8% of market value. Annual increases capped at 3% for primary residence
Commerce tax	0.051% to 0.331% of gross revenue (varies by industry)	Only businesses with Nevada gross revenue exceeding $4 million
Estate/inheritance tax	None	Nevada has neither
Modified business tax	1.378% on wages above $50,000/quarter	Employers only (employee headcount-based)

Compared to Ontario’s 13% HST, Nevada’s sales tax is lower (8.375% in Las Vegas) and exempts groceries, which Ontario’s HST does not. Property tax rates are also lower than most Ontario municipalities, with a constitutional cap on assessment increases.

How does no income tax affect RRSP and retirement income?

The effect is the same as in Florida, Texas, and Tennessee: only the federal layer applies.

• RRSP/RRIF withdrawals are taxed federally as ordinary income and subject to Canadian Part XIII withholding (15% on periodic payments, 25% on lump sums under the treaty). No state tax.
• CPP/OAS are taxed federally (if included in AGI above the filing threshold). No state tax.
• US Social Security is taxed federally (up to 85% includable depending on provisional income). No state tax.
• Capital gains on investment sales are taxed federally at preferential rates (0%, 15%, or 20% depending on income). No state tax, and unlike Washington, no state capital gains tax either.

For a Canadian retiree drawing $80,000 USD from an RRSP/RRIF annually, the state tax in Nevada is $0. The same distribution in North Carolina would cost about $3,600 at the 4.5% rate, and in California, it could exceed $6,000.

Why do Canadian investors choose Nevada?

Nevada’s combination of no income tax, no estate tax, strong asset protection laws (including a domestic asset protection trust statute), and favorable LLC laws makes it attractive for Canadian investors holding US real estate or other US assets. The key scenarios:

Holding US rental property. A Canadian who moves to Nevada and owns US rental property pays federal tax on the rental income and capital gains on a sale, but no state tax. If the property is in another state (say, a rental in California), that state’s tax still applies to the income sourced there.

Nevada LLC or corporation. Nevada doesn’t tax business income, but the commerce tax applies if Nevada gross revenue exceeds $4 million. For most cross-border small businesses, this threshold isn’t reached. The modified business tax on wages applies to employers. Nevada’s LLC privacy provisions (no requirement to disclose members on public filings) are a separate, non-tax feature.

Estate planning. Nevada’s lack of state estate tax means the only estate tax threshold is the federal $13.61 million exemption (for US citizens and residents). Compared to Washington ($2.193 million state threshold) or New York ($6.94 million with a “cliff”), Nevada eliminates the state estate planning layer entirely.

What happens on the Canadian side when I leave?

The standard departure sequence:

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

What about the Reno tech corridor?

Reno’s tax-free environment has attracted significant tech investment. Tesla’s Gigafactory, Apple’s data center, Switch’s data centers, and Panasonic’s battery facility are all in the Reno/Sparks area. The University of Nevada, Reno provides a talent pipeline. For Canadian tech workers considering relocation:

• No state income tax on wages or RSU income
• No state capital gains tax on stock sales
• Cost of living significantly lower than the Bay Area or Seattle
• Washoe County (Reno) property taxes are lower than Clark County (Las Vegas)
• The commerce tax doesn’t apply to employers under $4 million gross revenue

The corridor is smaller than Seattle or the Bay Area but growing, and the tax advantage over California is substantial. A tech worker earning $200,000 USD in California would pay roughly $15,000 to $18,000 in state tax; the same income in Nevada is $0.

What should I do next?

The Canadian exit follows the standard departure checklist. On the Nevada side, the planning is minimal for individuals (no state return), but consider the commerce tax if you’re running a business, and confirm that your Canadian province’s health coverage end date is documented.

• Departure tax checklist, the full Canadian exit sequence
• RRSP and TFSA on a US move, federal treatment and reporting
• Arizona taxes, the neighboring low-tax state for comparison
• Ontario to Florida, another no-income-tax corridor
• State income tax for cross-border filers, how Nevada compares
• Moving from Canada to Utah, the neighboring flat 4.65% state with a growing tech corridor
• Moving from Canada to Alaska, another no-income-tax state with no sales tax and a yearly dividend

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