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 5.60 percent state sales tax rate and an average combined state and local sales tax rate of 8.52 percent. Arizona has a 0.44 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 (per pack of 20 cigarettes). The State of Arizona collects $5,232 in state and local tax collections per capita. Arizona has $5,176 in state and local debt per capita and a 76 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. The first step toward 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 2025: How Does Your State Compare?
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