Arizona Income Tax Calculator

Arizona state tax quick facts Income tax: 2.59% - 4.54% Sales tax: 5.85% - 10.9% Property tax: 0.81% average effective rate Gas tax: 19 cents per gallon of regular gasoline, 27 cents per gallon of diesel (19 cents for light or exempt vehicles)

Arizona has been one of the five fastest growing states this decade, so have low taxes played a role in drawing people to the desert? Among U.S. states, Arizona has below-average income and property tax rates, and it has the 7th lowest gas tax rate in the nation. On the other hand, when considering both statewide and local taxes, the Grand Canyon state has the ninth highest sales tax rate in the country. In all, the effect of Arizona’s tax system varies depending on your specific financial circumstances. Below, we’ll take a closer look at the numbers to see how taxes in Arizona might affect you.

Arizona Income Tax

Like the federal income tax, Arizona’s state income tax has rates based on income brackets. The rates range from 2.59% to 4.54%, with higher brackets paying higher rates. The table below shows the tax brackets for Arizona taxpayers.

Those rates apply to Arizona taxable income. The starting point for computing Arizona taxable income is federal adjusted gross income (AGI). From there, there are a number of subtractions and additions made to calculate taxable income. For example, interest income from non-Arizona municipal bonds is taxable, and must be added to taxable income.

For the most part, however, calculating taxable income is a matter of subtracting deductions and exemptions from gross income. Itemized deductions in Arizona track very closely to federal itemized deductions. If you choose not to itemize on your Arizona tax return, you can claim the Arizona standard deduction, which is $4,945 for single filers and $9,883 for joint filers and heads of household.

In addition to the standard deduction, taxpayers in Arizona are also eligible for the state’s personal exemption of $2,100 (double that amount for joint filers). Additional exemptions of $2,300 may be made for dependents. Filing your return can be a rigorous task, but tax preparation software like TurboTax and TaxAct can save you time and money.

Arizona Sales Tax

If you need to buy some sunscreen, sunglasses or an air conditioner while you’re staying or living in Arizona, you’ll have to pay state and local sales taxes. While the statewide rate is 5.3%, local rates range from 0.25% to as much as 5.1%. When taking all those local taxes into account, the state’s average rate is 8.17%, ninth highest in the nation. The table below shows the combined state and county taxes for every county and the combined state, county and city sales tax rates for the largest cities in Arizona.

While most products purchased in the state will be subject to those rates, some items are exempt. Among the items exempt from sales tax in Arizona are: groceries, internet subscriptions, prescription drugs and professional or personal services.

Arizona Property Tax

On average, homeowners in Arizona pay $1,356 per year in property taxes, the 15th lowest amount nationally. Likewise, the average effective property tax rate (total taxes paid as a percentage of home value) is 19th lowest in the U.S, at 0.81%. That rate varies somewhat between cities and counties, but no county in Arizona has an effective property tax rate higher than 1.1%, which is the U.S. average.

Arizona’s sales tax may be on the higher side, but their property taxes are among the lowest in the nation. If you’re looking to refinance or relocate to Arizona, take a look at our guide to Arizona mortgage rates and getting a mortgage in the state.

Calculate Your Property Taxes: Arizona Property Tax Calculator

Arizona Tobacco Tax

Arizona has the 12th highest tax on cigarettes in the country. The tax costs $2.00 per pack of 20 cigarettes.

Arizona Estate Tax

As of January 2005, there is no estate tax in Arizona.

Arizona Alcohol Tax

Arizona collects excise taxes on alcoholic beverages, depending on the type of product being sold. The tax is equal to $3.00 per gallon of liquor, 84 cents per gallon of wine or 16 cents per gallon of beer.

Photo credit: Grand Canyon National Park

The Grand Canyon is over one mile deep in places, and as many as 18 miles wide. It may be over 17 million years old. Arizona was the last of the contiguous 48 states to achieve state hood. It did so on February 14, 1912.