State-by-State Guide to Taxes on Middle-Class Families
Tool | November 2021

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.


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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 (and will get lower starting in 2022). Sales tax rates are high in Arizona, but at least property taxes and taxes on gasoline are on the low end.

Income Tax Range

Low: 2.59% (on up to $54,615 of taxable income for married filers and up to $27,808 for single filers)

High: 4.5% (on $500,000 and over of taxable income for married joint filers and $250,000 and over for single filers)

Beginning in 2022, a two-bracket tax rate structure is adopted. The rates are 2.55% (on up to $54,544 of taxable income for joint filers and up to $27,272 for single filers) and 2.98% (on over $54,544 of taxable income for joint filers and on over $27,272 of taxable income for single filers). The rates will decrease to 2.53% and 2.75%, respectively, if certain state revenue amounts are reached. The state will then adopt a single flat rate of 2.5% if another state revenue amount is reached.

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 $644 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.