Arizona State Taxes
Quick Tax Facts
- Income Tax: 2.55% – 2.98%
- State Sales Tax: 5.6%
- Median Property Tax: $1,356
Arizona is considered one of the top 10 most tax-friendly states for middle-class families. It has one of the lowest income tax rates (soon to be a flat rate of only 2.5%) and property tax rates (6th lowest). Arizona’s sales tax rate, which is called a transaction privilege tax (TPT) is one of the highest in the country.
Arizona Income Tax
Arizona previously had four income tax brackets with rates that ranged between 2.59% and 4.5%. Due to recent legislation, however, there are two brackets (2.55 % & 2.98%) for the 2022 tax year. For the 2023 tax year and beyond, the state will use a flat rate of 2.5% for income taxes.
|Arizona Individual Income Tax Rates By Filing Status|
|Single and Married Filing Separately||2.55% – Income up to $28,653|
2.98% – Taxed on income over $28,653, plus $731
|Married Filing Jointly and Head of Household||2.55% – Income up to $57,305|
2.98% – Taxed on income over $57,305, plus $1,461
Non-residents and seasonal residents (part-time) must also use the tax brackets above to determine their tax liability. Those who earn less than $50,000 in taxable income have the option of using the above tables or the optional tables available on the Arizona Department of Revenue’s website.
Who Must File?
Residents and non-residents must file an individual income tax return if they receive income from sources within Arizona, such as wages, rental income, business income, real estate sales, or income from other Arizona sources.
The filing threshold is based on filing status and federal gross income (excluding non-taxable Arizona income):
- Single and gross income is more than $12,950;
- Married filing joint and gross income is more than $25,900;
- Married filing separate and gross income is more than $12,950; and
- Head of Household and gross income is more than $19,400.
Non-residents are subject to the same income thresholds but should file Form 140NR, Nonresident Personal Income Tax Return. To determine if the income threshold is met, non-residents should check out the guidance provided by the Arizona Department of Revenue here.
Arizona Sales Tax
Arizona has a state sales tax rate (known as transaction privilege tax) of 5.6%. Each local government can also impose an additional sales tax of up to 5.6% for a total of 11.2%. The average local sales tax is 2.8% and the average combined rate (state & city) is 8.4%. Tucson, for example, has a sales tax rate of 8.7% which consists of the state sales tax of 5.6%, Pima County sales tax of .5%, and the city’s tax of 2.6%. You can find a list of sales tax rates by city here.
Arizona Property Taxes
Property taxes in Arizona are assessed at the county level and the tax rate varies by county. For example, Greenlee County’s median property tax is only $303 annually, while residents in Maricopa County average $1,418. Arizona’s median property tax is currently $1,356 per year (2022). Overall, Arizona is ranked 31 out of 50 in the U.S. for the average amount of property taxes collected.
Arizona Tax Holidays
At this time, Arizona does not offer any tax holidays.
Arizona Tax Resources
If you need assistance preparing your Arizona state taxes, you can speak with a tax professional from Tax Defense Network by calling 855-476-6920.
You can also visit the Arizona Department of Revenue website for additional resources.