Tennessee Guide for Canadians

Quick Facts

State Income Tax	No state income tax (except investment income)
Sales Tax	7% state + local (9.55% average, Nashville 9.25%)
Driver's License Grace Period	30 days for residents
Residency Requirement for Tax	Domicile or 183+ days in Tennessee
Vehicle Registration Deadline	30 days for residents
REAL ID Deadline	May 7, 2025 for domestic flights
Enhanced Driver's License	Not available

First 90 Days Checklist

Week 1-2: Essential Documents & Registration

• Register with USCIS if staying 30+ days (required by April 11, 2025)
• Gather required documents for driver's license
• Open US bank account
• Set up Tennessee mailing address

Week 3-4: Official Registration

• Apply for Tennessee driver's license (within 30 days)
• Register vehicle if brought from Canada (within 30 days)
• Register to vote (if eligible)
• Obtain Tennessee identification if not driving

Month 2-3: Establishing Residency

• Update address with Canadian financial institutions
• Establish Tennessee ties and connections
• Research healthcare options and insurance
• Explore local communities and attractions

Driver's License & Vehicle Requirements

For Canadian Citizens

Required Documents:

• Original valid Canadian passport (proof of legal presence)
• Social Security Number or letter of ineligibility
• Two proofs of Tennessee residential address
• Birth certificate or citizenship documents for identity

Testing Requirements:

• Written knowledge test required for Canadian citizens
• Vision screening required
• Road skills test required - TN does not recognize foreign licenses
• No pre-licensing course required
• Canadian license will be returned after successful testing

REAL ID Compliance:

• Tennessee offers REAL ID compliant licenses
• Required by May 7, 2025 for domestic air travel
• Enhanced Driver's License not available in Tennessee
• Canadians must use passport for border crossings

Important Notes:

• 30-day limit to get TN license after residency
• REAL ID required by May 7, 2025 for air travel
• Must surrender valid out-of-state/country license
• Motorcycle endorsement requires separate testing

Vehicle Registration

• Register within 30 days of establishing residency
• Annual safety inspection required
• Emissions testing required in certain counties
• Tennessee insurance required for registration

Tax & Residency Considerations

Tennessee State Tax Structure

• **No state income tax** on wages and salaries
• **Investment income tax** 1% on interest and dividends over $1,250
• **No estate tax** (repealed in 2016)
• **Low property taxes** (0.64% effective rate)
• **High sales tax** 7% state + local (9.55% average)

Establishing Tennessee Tax Residency

Tennessee residency is based on domicile and statutory residence:

• Domiciled in Tennessee (intent to make permanent home)
• Statutory resident: 183+ days in tax year
• Maintaining permanent place of abode in Tennessee

Documentation to Establish Residency

• Tennessee driver's license and voter registration
• Bank accounts and utility bills in Tennessee
• Employment or business activities in Tennessee
• Professional licenses, club memberships
• Property ownership or long-term lease

Tax Advantage

Tennessee's lack of state income tax makes it very attractive for retirees and high-income individuals. Combined with low property taxes, overall tax burden is among the lowest in the US.

US Federal Tax Implications for Canadians

Important: Under the Substantial Presence Test, you may be considered a U.S. resident for tax purposes.
New Requirement: Canadians staying 30+ days must register with USCIS by April 11, 2025.
Recommendation: Consult a cross-border tax professional.

Healthcare Considerations

Insurance Options

• Tennessee uses federal healthcare.gov marketplace
• Travel insurance strongly recommended for visitors
• Consider US health insurance if staying permanently
• Major medical centers in Nashville, Memphis, Knoxville, Chattanooga

Prescription Medications

• Bring adequate supply from Canada
• Understand prescription transfer requirements
• US prices often higher than Canadian prices
• Research pharmacy options and discount programs

Special Considerations for Snowbirds

New US Registration Requirements (2025)

• Canadians staying 30+ days must register with USCIS
• Registration required by April 11, 2025
• Print and carry latest I-94 as proof of legal entry
• Failure to register may affect future US travel

Maintaining Canadian Ties

• Keep principal residence in Canada
• Monitor days in U.S. for tax reasons (183-day rule)
• Maintain Canadian insurance & banking relationships
• TN domicile-based residency requires careful planning

Property Considerations

• Generally affordable property values statewide
• Low property tax rates (0.64% effective)
• Growing real estate markets in major cities
• Impact on Canada's principal residence exemption

Climate & Lifestyle Factors

• Humid subtropical climate with mild winters
• Four seasons but shorter, milder winters than Canada
• Music heritage (Nashville, Memphis) and outdoor recreation
• Lower cost of living than most US states

Geographic Advantages

• Central location with easy access to Southeast and Midwest
• Major airports in Nashville, Memphis, and Knoxville
• Great Smoky Mountains National Park
• Rivers, lakes, and outdoor recreation opportunities

Travel Documentation

• Ensure passport validity (6+ months remaining)
• Consider Global Entry/NEXUS for easier border crossings
• Enhanced Driver's License not available in Tennessee
• I-94 registration now required for 30+ day stays

Cost of Living Advantage

Tennessee offers one of the lowest costs of living in the US, with no state income tax, low property taxes, and affordable housing. Sales tax is higher but overall tax burden remains very competitive.

Cultural Considerations

• Strong Southern hospitality and culture
• Rich music heritage (country, blues, rock)
• Diverse geography from mountains to rivers
• Growing Canadian expatriate communities in major cities

Key Contacts & Resources