Arizona State Taxes: Everything You Need to Know
Learn the basics of the Arizona tax laws.When it comes to taxes in the state of Arizona, it’s a mixed bag. For example, the state income tax you will pay is lower overall than in most U.S. states: Low median household income and comparatively low income tax rates are the reason. But sales taxes in Arizona are higher than in many U.S. states. And property taxes range anywhere from around 0.25 percent to over 1 percent.
Keep reading to find out all the details about state taxes in Arizona and how they will affect the size of your paycheck.
| Arizona State Taxes | |
| Rate Range of Taxes | 0% to 11.2% |
| State Sales Tax Rate Range | 5.6% to 11.2% |
| State Income Tax Rate Range | 2.59% to 4.54% |
| State Inheritance and Estate Tax Rate Range | 0% |
| State Average Property Tax Rate | 0.845% |
Arizona Income Tax
Personal income tax rates are levied on residents and nonresidents who earn income in the state. Anyone who makes at least $5,500 in adjusted gross income must file a state income tax return.
The state has a progressive income tax system that includes five income tax brackets. Depending on which bracket you’re in, you’ll pay anywhere from 2.59 percent to 4.54 percent:
| Arizona Income Tax Rates | |
| Estimated Income | Rate |
| $0 to $10,346 | 2.59% |
| $10,346 to $25,861 | 2.88% |
| $25,861 to $51,721 | 3.36% |
| $51,721 to $155,159 | 4.24% |
| $155,159 or more | 4.54% |
Just like on a federal tax return, Arizona’s state income tax return offers four filing statuses to choose from: single, married filing joint return, married filing separate return and head of household. Generally, whichever filing status you choose for your federal tax return should also be used on your state tax return.
Check Out: State Income Tax Rates Explained
Arizona Sales Taxes
The state sales tax rate in Arizona is currently 5.6 percent. The Arizona sales tax rate will ultimately vary according to locale, however. Local municipalities will add their own sales tax rate to the state’s rate. For example, the sales tax rate in Phoenix is 2.3 percent. When added to the state sales tax rate, the effective sales tax rate in Phoenix is 7.9 percent.
The average local sales tax rate across the state is a bit higher than in Phoenix, at 2.73 percent. When combined with the state sales tax rate of 5.6 percent, the average sales tax rate across Arizona is 8.33 percent.
Here’s How Much You’re Really Paying: Sales Tax by State
Arizona Property Taxes
Property taxes are assessed and administered in each county by its county tax assessor, but the effective rate for the state of Arizona overall is 0.845 percent. Each county’s property taxes will differ depending on which county the property is in and the rate of taxes that are set by the local taxing authorities.
Learn: 6 Things Every Homeowner Should Know About Property Taxes
Arizona Inheritance Taxes and Estate Taxes
As of Jan. 1, 2005, Arizona no longer imposes an estate tax. The federal estate tax still applies to Arizona residents, however.
In the U.S., there are only 12 states, plus the District of Columbia, that currently have an estate tax. Only six U.S. states have an inheritance tax. Out of those states, Maryland is the only one in the nation that has both an estate and inheritance tax. Arizona does not impose either.
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