State-by-State Guide to Taxes on Middle-Class Families
Tool | November 2020

Arizona State Tax Guide for Middle-Class Families

State tax rates and rules for income, sales, gas, property, cigarette, and other taxes that impact middle-class families.

Arizona

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The Bottom Line
Flag 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 $327,263 for 2020 taxes. The state tax on gasoline is the also one of the country's lowest.

Income Tax Range

Low: 2.59% (on up to $54,544 of taxable income for married filers and up to $27,272 for single filers)

High: 4.5% (on $327,263 and over of taxable income for married joint filers and $163,632 and over for single filers)

Starting in 2021, Proposition 208 (approved by voters on the November 3, 2020, ballot) imposes a 3.5% surtax on taxable income over $500,000 for joint filers and over $250,000 for single taxpayers.

Sales Tax

5.6% state levy. Localities can add as much as 5.6% to that, but the average combined levy is 8.4%, according to the Tax Foundation.

Groceries: Exempt from state tax, but local taxes may apply
Clothing: Taxable
Motor Vehicles: Taxable
Prescription Drugs: Exempt

Real Property Taxes

In Arizona, the median property tax rate is $617 per $100,000 of assessed home value.

Motor Fuel Taxes

Gasoline: 19¢ per gallon.
Diesel: 27¢ per gallon (19¢ per gallon for light vehicles like pickup trucks).

Sin Taxes

Cigarettes: $2 per pack.
Snuff, fine-cut chewing and smoking tobacco: $0.23 per ounce
Plug or twist chewing tobacco: $0.06 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

Marijuana: 16% excise tax, plus state and local sales tax

Annual Car Taxes and Fees

An annual vehicle license tax based on the car's sticker price (MSRP) and age is imposed.

Estate and Inheritance Taxes

No estate or inheritance tax.


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