Overview of Arizona Taxes
Taxpayers in Arizona face below-average income tax rates and property tax rates, along with low gas taxes. But the state’s sales tax is among the highest in the country.
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Your Income Taxes Breakdown
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* These are the taxes owed for the 2023 - 2024 filing season.
Your 2023 Federal Income Tax Comparison
- Your marginal federal income tax rate
- Your effective federal income tax rate
- Your federal income taxes
Total Estimated 2023 Tax BurdenIncome Tax $ Sales Tax $ Fuel Tax $ Property Tax$ Total Estimated Tax Burden $ Percent of income to taxes = % | $ |
- About This Answer
Our income tax calculator calculates your federal, state and local taxes based on several key inputs: your household income, location, filing status and number of personal exemptions.
How Income Taxes Are Calculated
- First, we calculate your adjusted gross income (AGI) by taking your total household income and reducing it by certain items such as contributions to your 401(k).
- Next, from AGI we subtract exemptions and deductions (either itemized or standard) to get your taxable income. Exemptions can be claimed for each taxpayer as well as dependents such as one’s spouse or children.
- Based on your filing status, your taxable income is then applied to the the tax brackets to calculate your federal income taxes owed for the year.
- Your location will determine whether you owe local and / or state taxes.
- Last Updated: January 1, 2024
When Do We Update? - We regularly check for any updates to the latest tax rates and regulations.
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Taxes in Arizona
Arizona State Tax Quick Facts
- Income tax: 2.55% - 2.98%
- Sales tax: 5.60% - 10.90%
- Property tax: 0.51% average effective rate
- Gas tax: 18 cents per gallon of regular gasoline, 26 cents per gallon of diesel
Arizona has been one of the fastest growing states in recent years, as low taxes may have played a role in drawing people to the desert. Among U.S. states, Arizona has below-average income and property tax rates, and it has the fifth-lowest gas tax rate in the nation. On the other hand, when considering both statewide and local taxes, the Grand Canyon State has the 10th-highest sales tax rate in the country. In all, the effect of Arizona’s tax system varies depending on your specific financial circumstances.
A financial advisor can help you understand how taxes fit into your overall financial goals. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
Arizona Income Taxes
Single taxpayers and those married filing separately are taxed at 2.55% for income under $28,653 and 2.98% for all other income above that. Joint filers and heads of household will pay 2.55% for income under $57,305 and 2.98% for additional income above that.
Those rates apply to Arizona taxable income. The starting point for computing Arizona taxable income is federal adjusted gross income (AGI). From here, there are a number of subtractions and additions made to calculate taxable income. For example, interest income from non-Arizona municipal bonds is taxable, and must be added to taxable income.
For the most part, however, calculating taxable income is a matter of subtracting deductions and exemptions from gross income. Itemized deductions in Arizona track very closely to federal itemized deductions. If you choose not to itemize on your Arizona tax return, you can claim the Arizona standard deduction, which is $12,950 for single filers and $25,900 for joint filers. Each of these match the federal standard deduction.
Arizona Sales Tax
You’ll have to pay state and local sales taxes on purchases made in Arizona. The statewide rate is 5.60%. When taking all local taxes into account, the state’s average rate is 8.40%, eighth-highest in the nation. The table below shows the combined state and county taxes for every county and the combined state, county and city sales tax rates for several cities in Arizona.
While most products purchased in the state will be subject to those rates, some items are exempt. Among the items exempt from sales tax in Arizona are groceries, internet subscriptions, prescription drugs and professional or personal services.
Arizona Property Tax
The typical homeowner pays $1,707 per year in property taxes in Arizona. The average effective property tax rate (total taxes paid as a percentage of home value) is 0.51%. That rate varies somewhat between cities and counties, but no county in Arizona has an effective property tax rate higher than 1.65%, which is 0.66% higher the U.S. average of 0.99%.
Arizona’s sales tax may be on the higher side, but its property taxes are among the lowest in the nation. If you’re looking to refinance or relocate to Arizona, take a look at our guide to Arizona mortgage rates and getting a mortgage in the state.
Arizona Tobacco Tax
On a nationwide scale, Arizona taxes cigarettes at a high rate. In fact, the tax costs $2.00 per pack of 20 cigarettes, or 10 cents per stick.
Arizona Estate Tax
As of January 2005, there is no estate tax in Arizona.
Arizona Alcohol Tax
Arizona collects excise taxes on alcoholic beverages, depending on the type of product being sold. The tax is equal to $3.00 per gallon of liquor, 84 cents per gallon of wine and 16 cents per gallon of beer.
- The Grand Canyon is over one mile deep in places, and as many as 18 miles wide. It may be over 17 million years old.
- Arizona was the last of the contiguous 48 states to achieve statehood. It did so on February 14, 1912.