State Individual Income Tax Rates and Brackets, 2023
Individual income taxes are a major source of state government revenue, accounting for more than a third of state tax collections:
9 min read
Arizona Tax Rates, Collections, and Burdens
How does Arizona’s tax code compare? Arizona has a flat 2.50 percent individual income tax rate. Arizona has a 4.9 percent corporate income tax rate. Arizona also has a 5.6 percent state sales tax rate and an average combined state and local sales tax rate of 8.38 percent. Arizona has a 0.45 percent effective property tax rate on owner-occupied housing value.
Arizona does not have an estate tax or inheritance tax. Arizona has a 19 cents per gallon gas tax rate and a $2.00 cigarette excise tax rate. The State of Arizona collects $4,606 in state and local tax collections per capita. Arizona has $5,460 in state and local debt per capita and has a 73 percent funded ratio of public pension plans. Overall, Arizona’s tax system ranks 14th on our 2024 State Business Tax Climate Index.
Each state’s tax code is a multifaceted system with many moving parts, and Arizona is no exception. The first step towards understanding Arizona’s tax code is knowing the basics. How does Arizona collect tax revenue? Click the tabs below to learn more! You can also explore our state tax maps, which are compiled from our annual publication, Facts & Figures 2024: How Does Your State Compare?
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Featured Articles
State and Local Sales Tax Rates, Midyear 2023
Compare the latest 2023 sales tax rates as of July 1st. Sales tax rate differentials can induce consumers to shop across borders or buy products online.
8 min read
State Corporate Income Tax Rates and Brackets, 2023
New Jersey levies the highest top statutory corporate tax rate at 11.5 percent, followed by Minnesota (9.8 percent) and Illinois (9.50 percent). Alaska and Pennsylvania levy top statutory corporate tax rates of 9.40 percent and 8.99 percent, respectively.
6 min read
Facts & Figures 2023: How Does Your State Compare?
Facts & Figures serves as a one-stop state tax data resource that compares all 50 states on over 40 measures of tax rates, collections, burdens, and more.
2 min read
Unpacking the State and Local Tax Toolkit: Sources of State and Local Tax Collections (FY 2020)
The mix of tax sources states choose can have important implications for both revenue stability and economic growth, and the many variations across states are indicative of the different ways states weigh competing policy goals.
29 min read
2023 State Business Tax Climate Index
While there are many ways to show how much is collected in taxes by state governments, our Index is designed to show how well states structure their tax systems by focusing on the how more than the how much in recognition of the fact that there are better and worse ways to raise revenue.
129 min readAll Related Articles
State Tax Changes Effective January 1, 2021
Twenty-six states and the District of Columbia had notable tax changes take effect on January 1, 2021. Because most states’ legislative sessions were cut short in 2020 due to the COVID-19 pandemic, fewer tax changes were adopted in 2020 than in a typical year.
24 min read
Congress Passes $900 Billion Coronavirus Relief Package
The coronavirus relief package represents the second-largest recovery legislation, behind only the CARES Act, for a combined total of more than $3 trillion in support.
8 min read
Details and Analysis of State and Local Aid Under the Bipartisan State and Local Support and Small Business Protection Act of 2020
On Monday, members of the bipartisan Gang of Eight negotiating an end-of-year pandemic relief package announced that they had settled on language and had divided the package into two bills: a pandemic aid package and a $160 billion state and local support package.
6 min read
Wireless Tax Burden Remains High Due to Federal Surcharge Increase
A typical American household with four phones on a “family share” wireless plan can expect to pay about $270 per year (or 22 percent of their cell phone bill) in taxes, fees, and surcharges.
36 min read
Election Analysis: Why Voters Split the Difference on Income Tax Measures
Illinois voters rejected a high graduated rate income tax (“Fair Tax”) while Arizonans embraced a large income tax rate increase for high earners, among the many attention-grabbing results from Tuesday’s elections.
7 min read
Election Analysis: Recreational Marijuana Now Legal in Four More States
Voters in four states, Arizona, Montana, New Jersey, and South Dakota, approved ballot measures legalizing recreational marijuana.
7 min read
2021 State Business Tax Climate Index
166 min read
Top Rates in Each State Under Joe Biden’s Tax Plan
President Joe Biden’s tax plan would yield combined top marginal state and local rates in excess of 60 percent in three states: California, Hawaii, and New Jersey (also New York City).
4 min read
Arizona Proposition 208 Threatens Arizona’s Status as a Destination for Interstate Migration
Significantly raising the income tax through Proposition 208 will only serve to make Arizona less competitive, especially at a time when individuals and small businesses are already struggling. If Arizona is looking for a long-term way to increase education funding, it would do well to avoid overburdening struggling taxpayers and look toward more broad-based, stable sources of revenue.
5 min read
State and Local Tax Ballot Measures to Watch on Election Day 2020
Here are the state tax ballot measures to watch on Election Day 2020. Explore the most notable 2020 state tax ballot measures in 15 states.
4 min read