Arizona has a flat 2.50 percent individual income tax rate. Arizona has a 4.9 percent corporate income tax rate, a 5.60 percent state sales tax rate, and an average combined state and local sales tax rate of 8.52 percent. Arizona has a 0.48 percent effective property tax rate on owner-occupied housing value. Arizona does not have an estate tax or inheritance tax. Arizona’s gas tax is 19 cents per gallon, and its cigarette excise tax is $2.00 per pack of 20 cigarettes.
Arizona raises tax revenue primarily through general sales taxes (47.1 percent of total state and local tax revenue), property taxes (24.7 percent), and individual income taxes (12.9 percent). Arizona collects $5,006 in state and local tax collections per capita, carries $5,177 in state and local debt per capita, and has a 78 percent funded ratio of public pension plans. Arizona’s tax system ranks 14th overall on the 2026 State Tax Competitiveness Index.
Each state’s tax code is a multifaceted system with many moving parts, and Arizona is no exception. Use the tabs below to compare Arizona taxes with other states and to see how Arizona raises tax revenue. You can also browse our tax maps, which are compiled from our annual publication, Facts & Figures 2026: How Does Your State Compare?
Get facts about taxes in your state and around the US
The State Tax Competitiveness Index enables policymakers, taxpayers, and business leaders to gauge how their states’ tax systems compare. While there are many ways to show how much state governments collect in taxes, the Index evaluates how well states structure their tax systems and provides a road map for improvement.
122 min read
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
Individual income taxes are a major source of state government revenue, accounting for more than a third of state tax collections. How do income taxes compare in your state?
9 min read
Retail sales taxes are an essential part of most states’ revenue toolkits, responsible for nearly a quarter of combined state and local tax collections.
18 min read
Forty-four states levy a corporate income tax, with top rates ranging from a 2 percent flat rate in North Carolina to an 11.5 percent top marginal rate in New Jersey. Four states—Georgia, Nebraska, North Carolina, and Pennsylvania—reduced their corporate income tax rates effective January 1, 2026.
5 min read
Property taxes are the primary tool for financing local governments. While no taxpayers in high-tax jurisdictions will be celebrating their yearly payments, property taxes are largely rooted in the benefit principle of taxation: the people paying the property tax bills are most often the ones benefiting from the services.
9 min read
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
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
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
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
Voters in four states, Arizona, Montana, New Jersey, and South Dakota, approved ballot measures legalizing recreational marijuana.
7 min read
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
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
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
Legalizing recreational marijuana is a hot topic in many states where the state budgets are in disarray because of the coronavirus pandemic and new revenue sources are being sought.
7 min read
