Tool | August 2016

State-by-State Guide to Taxes

Compare state tax rates and rules -- on income, ordinary purchases, gas, "sin" products, property, and more -- across the U.S.

Arizona

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The Bottom Line
Map of Arizona

Most Tax-Friendly

While the Grand Canyon State does have an income tax, the rates are notably low: If you're a joint filer, you won't hit the top bracket until your income is over $300,000, helping earn Arizona a place among Kiplinger's top ten most tax-friendly states. The tax on gasoline is the country's third lowest.

Sales Tax

5.6% state levy. Localities can add as much as 5.3% to that, but the average combined levy is 8.25%, according to the Tax Foundation. Many cities in Arizona levy a tax on food for home consumption; Phoenix and Mesa are notable exceptions.

Income Tax Range

Low: 2.59% (on up to $20,000 of taxable income for married joint filers and up to $10,000 for all others)

High: 4.54% (on more than $300,000 of taxable income for married joint filers and more than $150,000 for all others)

See Kiplinger.com’s Retiree Tax MapMap to learn how Arizona taxes Social Security income and other forms of retirement income.

Motor Fuel Taxes

Gasoline: $0.19 per gallon.
Diesel: $0.27 per gallon.

Property Taxes

The median property tax on Arizona's median home value of $176,700 is $1,330.

See Kiplinger.com’s Retiree Tax MapMap to learn how Arizona taxes Social Security income and other forms of retirement income.

Vehicle Taxes

Sales tax is due; rate depends on home address of buyer. Arizona levies an annual tax based on a car’s sticker price and age. The assessment is set at 60% of the MSRP price, reduced by 16.25% for each year since the vehicle was first registered in Arizona. The rate is $2.89 (new vehicles) /$2.80 (used vehicles) for each $100 of assessed value. So for a vehicle that cost $30,000, tax in the first year would be $504.

Sin Taxes

Cigarettes: $2 per pack; many municpalities have their own, too.
Snuff, chewing and smoking tobacco: $0.22 per ounce
Cigars: $0.22 to $2.20 per ten cigars

Beer: $0.16 per gallon
Wine: $0.84 per gallon
Liquor: $3 per gallon

Travel Taxes

Hotel: State lodging tax is 5.5%. Localities can add additional taxes. In Phoenix, the total is 12.3%.

Rental cars: No specific state tax, but some counties may levy their own. On each rental contract, Pima County adds $3.50. Maricopa County adds $2.50 or 3.25%, whichever is greater, to fund stadium construction. Sales tax is due.

Taxes On Wireless Service

12%

Inheritance and Estate Taxes

There is no inheritance tax or estate tax.

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