Arizona Tax Guide
2.5%top marginal rate
Arizona switched to a flat income tax of 2.5% in 2023, making it one of the lowest flat-rate income tax states in the country. Combined with low property taxes, Arizona is increasingly popular for retirees and remote workers.
Arizona Tax at a Glance
Income Tax
2.5%
Flat rate
Sales Tax
5.6%
State-level rate
Property Tax
0.62%
44% below the national average
Estate Tax
No
No state estate tax
How Arizona Compares to the National Average
Notable Tax Facts
- Moved from a progressive system to a flat 2.5% income tax rate in 2023
- One of the lowest flat income tax rates among states that levy one
- Property tax rates are well below the national average
- No estate or inheritance tax
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Arizona Tax FAQ
What is Arizona's income tax rate?
Arizona has a flat income tax rate of 2.5%, one of the lowest in the country. This applies to all taxable income regardless of filing status or income level.
Is Arizona good for retirees?
Yes. Arizona does not tax Social Security benefits, has a low flat income tax, low property taxes, and no estate tax — making it very attractive for retirees.
What is the sales tax in Arizona?
Arizona's state sales tax (called Transaction Privilege Tax) is 5.6%. Local jurisdictions can add to this, with combined rates varying by city.
Does Arizona have property tax?
Yes, but Arizona's effective property tax rate of about 0.62% is well below the national average of roughly 1.1%.
Compare With Other States
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Educational content, not tax advice. Tax rates are approximate and subject to change. Consult a qualified CPA or tax professional for advice specific to your situation. Data reflects widely-known public information as of early 2026.