-
Overall Rank
17
Down 3 places since 2026 -
20
Down 4 places since 2026 -
14
Down 5 places since 2026 -
40
Down 5 places since 2026 -
8
Up 1 place since 2026 -
Unemployment Insurance Tax Rank
1
No change since 2026
Arizona ranks 17th overall on the 2027 State Tax Competitiveness Index.
Score 5.37 / 10
Notable Changes Arizona is singled out in the study for this year's changes.
In the 2027 Index
Arizona fell three places overall, from 14th to 17th. Arizona passed conformity legislation with several retroactive provisions, but since the legislation contained no emergency clause, the retroactivity was not legally in effect as of the Index’s snapshot date of July 1, 2026. This timing, in addition to not conforming to full expensing under Section 168(k), resulted in its corporate income tax ranking falling from 16th to 20th. Arizona’s fiscal year 2027 budget, which took effect on July 1, 2026, included a three-year moratorium on tax incentives on new data center tax projects, with a resulting drop in the state’s sales and use tax ranking from 35th to 40th due to the suspension of sales tax exemptions for the qualifying equipment purchases of new data centers. The state’s tangible personal property (TPP) tax exemption increased from $269,905 to $500,000, slightly improving its property and wealth tax ranking.
Snapshot date: The 2027 Index measures each state's tax law as of July 1, 2026. Changes enacted after that date are not reflected in these ranks.
About Arizona's Tax Code
Arizona’s tax code features all major tax types, but because of tax reforms adopted in recent years, the state ranks well on the Index. Arizona performs well on income and property taxes and has one of the most efficient unemployment insurance tax systems in the nation. The state’s individual income tax has a flat rate of 2.5 percent, the lowest flat rate in the country, making Arizona among the most competitive of the states that impose individual income taxes. Such a low rate makes the state very attractive to taxpayers who have decided to leave high-tax states, particularly California. The state could further improve its income tax competitiveness by increasing the filing threshold for nonresident workers to match its 60-day withholding threshold. A reform like this would not only reduce compliance burdens for individuals working in the state for just a short period of time, but it would also make the state the least burdensome in the country for nonresident workers.
Arizona also has a flat corporate income tax rate of 4.9 percent and avoids imposing harmful gross receipts taxes and capital stock taxes. However, the state does not conform to the federal treatment of bonus depreciation under Section 168(k) and requires that businesses add back to the corporate income tax base any bonus depreciation taken at the federal level. Conforming to these provisions would encourage further in-state investment and make a reasonably competitive tax code even better.
The combined state and local sales tax rate is relatively high, and localities can modify the sales tax base, making the system more complicated than in most states. The state sales tax base is also relatively narrow, below the median national level, because many personal services and some goods are tax-exempt. Expanding the base to include most personal services while keeping business inputs out represents another potentially beneficial tax reform for the state.
Arizona taxes tangible personal property but offers a generous de minimis exemption of $500,000 to minimize compliance costs for small and medium-sized businesses. Furthermore, the state does not impose inheritance, estate, or gift taxes, which makes it more attractive for wealthy households and retirees.
Component Scores
#17 overall · 5.37 / 10Each component is scored from 0 to 10, where 10 is best. Select a component for its detail page.
| Component | Rank | Score | |
|---|---|---|---|
| Corporate Taxes | #20 | 5.45 / 10 | |
| Individual Income Taxes | #14 | 5.56 / 10 | |
| Sales Taxes | #40 | 4.13 / 10 | |
| Property Taxes | #8 | 6.04 / 10 | |
| Unemployment Insurance Taxes | #1 | 6.19 / 10 |
Ranking Changes, 2020–2027
#17 in 2027 · up 2 places from 2020Arizona ranked 19th in 2020 and ranks 17th in 2027, an improvement of 2 places. The axis is zoomed to the state's range. Ranks for 2020 through 2026 are backcast under the current methodology.
Show the Table
| Year | Overall | Corporate | Individual Income | Sales | Property | Unemployment Insurance |
|---|---|---|---|---|---|---|
| 2020 | 19 (5.22) | 13 (5.51) | 20 (5.42) | 41 (4.04) | 12 (5.57) | 3 (6.07) |
| 2021 | 18 (5.25) | 14 (5.52) | 16 (5.50) | 41 (4.06) | 11 (5.57) | 3 (6.09) |
| 2022 | 18 (5.27) | 14 (5.55) | 16 (5.54) | 40 (4.09) | 11 (5.60) | 3 (6.00) |
| 2023 | 16 (5.46) | 12 (5.55) | 8 (6.08) | 40 (4.06) | 10 (5.74) | 2 (6.05) |
| 2024 | 14 (5.47) | 13 (5.53) | 8 (6.17) | 40 (4.09) | 10 (5.73) | 3 (5.96) |
| 2025 | 15 (5.43) | 14 (5.51) | 8 (6.10) | 40 (3.98) | 13 (5.71) | 1 (6.07) |
| 2026 | 14 (5.48) | 16 (5.47) | 9 (5.91) | 35 (4.27) | 9 (5.82) | 1 (6.19) |
| 2027 | 17 (5.37) | 20 (5.45) | 14 (5.56) | 40 (4.13) | 8 (6.04) | 1 (6.19) |
Arizona Compared across the States
#17 overallEach row places the states on a 0 to 10 score scale for one measure. Arizona is the large outlined dot, and the dashed line is the 50-state median, so a dot to its right scores better than the typical state. Hover over or tab to any dot for detail, and select it to open that state's profile.
Overall
#17 5.37
Corporate Taxes
#20 5.45
Individual Income Taxes
#14 5.56
Sales Taxes
#40 4.13
Property Taxes
#8 6.04
Unemployment Insurance Taxes
#1 6.19
- Arizona
- Other states, by rank (1st to 50th)
- 50-state median
Arizona and Its Neighbors
#17 overallArizona borders 5 states and ranks 17th overall; 1 of them ranks higher and 4 rank lower.
-
Utah #10 Score 5.61 7 places better -
Arizona #17 Score 5.37 This state -
Nevada #21 Score 5.31 4 places behind -
New Mexico #28 Score 5.12 11 places behind -
Colorado #33 Score 5.00 16 places behind -
California #49 Score 3.90 32 places behind
What Each Component Includes
The five components of the Index, what each one covers, and where Arizona lands. Open any component for the full breakdown.
-
Corporate Taxes
Rank #20Includes corporate income taxes and gross receipts taxes. Measures the impact of each state’s principal tax on business activities.
Full Breakdown for Arizona → -
Individual Income Taxes
Rank #14Covers the tax individuals pay on income, and with it a significant number of businesses — sole proprietorships, partnerships, and S corporations — that report their income through the individual income tax code.
Full Breakdown for Arizona → -
Sales Taxes
Rank #40Covers the general sales tax levied on the purchase price of goods and services, plus excise taxes on gasoline, diesel, tobacco, vapor products, beer, and spirits, and taxes on digital advertising.
Full Breakdown for Arizona → -
Property Taxes
Rank #8Includes taxes on real and personal property, net worth, and the transfer of assets — among them capital stock, estate, inheritance, and real estate transfer taxes.
Full Breakdown for Arizona → -
Unemployment Insurance Taxes
Rank #1Covers the taxes employers pay into the state unemployment insurance program to finance benefits for workers recently unemployed.
Full Breakdown for Arizona →
Tax Data Explorer
Every policy variable behind Arizona's 2027 scores, grouped by the report's tables, as of July 1, 2026. Its bordering states are shown alongside to start. Search the variables and values, or add up to 4 states to compare side by side.
156 data points · Shaded values differ from Arizona
Corporate Taxes: Corporate Income Tax Rates
| Variable | Arizona | California | Colorado | Nevada | New Mexico | Utah |
|---|---|---|---|---|---|---|
| Bracket 1 | 4.9% > $0 | 8.84% > $0 (differs) | 4.4% > $0 (differs) | None (differs) | 5.9% > $0 (differs) | 4.45% > $0 (differs) |
| Gross Receipts Tax | No | No | No | Yes (differs) | No | No |
| Gross Receipts Tax Minimum Rate | n.a. | n.a. | n.a. | 0.051% (differs) | n.a. | n.a. |
| Gross Receipts Tax Maximum Rate | n.a. | n.a. | n.a. | 0.331% (differs) | n.a. | n.a. |
| Gross Receipts Tax Rate Used in the Index | n.a. | n.a. | n.a. | 0.111% (differs) | n.a. | n.a. |
Corporate Taxes: Tax Credits and Gross Receipts Deductions
| Variable | Arizona | California | Colorado | Nevada | New Mexico | Utah |
|---|---|---|---|---|---|---|
| Job Credits | Yes | Yes | Yes | No (differs) | Yes | No (differs) |
| Research and Development Credits | Yes | Yes | Yes | No (differs) | Yes | Yes |
| Investment Credits | Yes | No (differs) | Yes | No (differs) | Yes | Yes |
| Compensation Expenses Deductible | n.a. | n.a. | n.a. | No (differs) | n.a. | n.a. |
| Cost of Goods Sold Deductible | n.a. | n.a. | n.a. | No (differs) | n.a. | n.a. |
Corporate Taxes: Net Operating Losses
| Variable | Arizona | California | Colorado | Nevada | New Mexico | Utah |
|---|---|---|---|---|---|---|
| Conforms to Federal NOL Treatment | No | No | No | n.a. (differs) | Yes (differs) | Yes (differs) |
| Carryback (Years) | 0 | 0 | 0 | n.a. (differs) | Conforms to federal treatment (differs) | Conforms to federal treatment (differs) |
| Carryback Cap | $0 | $0 | $0 | n.a. (differs) | Conforms to federal treatment (differs) | Conforms to federal treatment (differs) |
| Carryforward (Years) | 20 | 0 (differs) | 20 | n.a. (differs) | Conforms to federal treatment (differs) | Conforms to federal treatment (differs) |
| Carryforward Cap | Unlimited | $0 (differs) | 80% (differs) | n.a. (differs) | Conforms to federal treatment (differs) | Conforms to federal treatment (differs) |
Corporate Taxes: Treatment of Capital Investment
| Variable | Arizona | California | Colorado | Nevada | New Mexico | Utah |
|---|---|---|---|---|---|---|
| Section 168(k) Expensing | 0% | 0% | 100% (differs) | 100% (differs) | 100% (differs) | 100% (differs) |
| Conforms to Section 163(j) Limitation | Yes | No (differs) | Yes | No (differs) | Yes | Yes |
| GILTI Inclusion | Decouples | Decouples | 50% Inclusion (differs) | n.a. (differs) | Decouples | 50% Inclusion (differs) |
| Section 174 Expensing | Yes | Yes | Yes | Yes | Yes | Yes |
| Section 168(n) Expensing | No | No | Yes (differs) | Yes (differs) | Yes (differs) | Yes (differs) |
Corporate Taxes: Other Corporate Base Variables
| Variable | Arizona | California | Colorado | Nevada | New Mexico | Utah |
|---|---|---|---|---|---|---|
| Federal Income Used as State Tax Base | Yes | Yes | Yes | Yes | Yes | Yes |
| Conformity Status | Static (current) | Static (not current) (differs) | Rolling (differs) | Rolling (differs) | Rolling (differs) | Rolling (differs) |
| Allows Federal ACRS or MACRS Depreciation | Yes | No (differs) | Yes | Yes | Yes | Yes |
| Allows Federal Depletion | Yes | Partial (differs) | Yes | Yes | Yes | Yes |
| Throwback Rule | No | Yes (differs) | Yes (differs) | No | Yes (differs) | Yes (differs) |
| Foreign Tax Deductibility | No | No | No | Yes (differs) | Yes (differs) | No |
| Corporate AMT | No | Yes (differs) | No | No | No | No |
| Brackets Indexed for Inflation | Flat CIT | Flat CIT | Flat CIT | GRT (differs) | Flat CIT | Flat CIT |
Individual Income Taxes: Individual Income Tax Rates
| Variable | Arizona | California | Colorado | Nevada | New Mexico | Utah |
|---|---|---|---|---|---|---|
| Bracket 1 | 2.5% > $0 | 1.0% > $0 (differs) | 4.4% > $0 (differs) | No Income Tax (differs) | 1.5% > $0 (differs) | 4.45% > $0 (differs) |
| Bracket 2 | n.a. | 2.0% > $11,079 (differs) | n.a. | n.a. | 3.2% > $5,500 (differs) | n.a. |
| Bracket 3 | n.a. | 4.0% > $26,264 (differs) | n.a. | n.a. | 4.3% > $16,500 (differs) | n.a. |
| Bracket 4 | n.a. | 6.0% > $41,452 (differs) | n.a. | n.a. | 4.7% > $33,500 (differs) | n.a. |
| Bracket 5 | n.a. | 8.0% > $57,542 (differs) | n.a. | n.a. | 4.9% > $66,500 (differs) | n.a. |
| Bracket 6 | n.a. | 9.3% > $72,724 (differs) | n.a. | n.a. | 5.9% > $210,000 (differs) | n.a. |
| Bracket 7 | n.a. | 10.3% > $371,479 (differs) | n.a. | n.a. | n.a. | n.a. |
| Bracket 8 | n.a. | 11.3% > $445,771 (differs) | n.a. | n.a. | n.a. | n.a. |
| Bracket 9 | n.a. | 12.3% > $742,953 (differs) | n.a. | n.a. | n.a. | n.a. |
| Bracket 10 | n.a. | 13.3% > $1,000,000 (differs) | n.a. | n.a. | n.a. | n.a. |
| Standard Deduction (Single Filer) | $8,350 | $5,706 (differs) | $16,100 (differs) | n.a. (differs) | $16,100 (differs) | $21,708 (differs) |
| Personal Exemption (Single Filer) | n.a. | n.a. | n.a. | n.a. | n.a. | Combined with the standard deduction into one credit (differs) |
| Personal Exemption Credit (Single Filer) | n.a. | $153 (differs) | n.a. | n.a. | n.a. | Combined with the standard deduction into one credit (differs) |
| Personal Exemption per Dependent | n.a. | n.a. | n.a. | n.a. | $4,000 (differs) | $2,111 (differs) |
| Personal Exemption Credit per Dependent | $125 | $476 (differs) | n.a. (differs) | n.a. (differs) | n.a. (differs) | n.a. (differs) |
| Average Local Income Tax Rate | None | None | 0.06% (differs) | None | None | None |
| Surtaxes on Wage Income | n.a. | 1.3% (differs) | n.a. | n.a. | n.a. | n.a. |
Individual Income Taxes: Marriage Penalty, Capital Income, Indexation
| Variable | Arizona | California | Colorado | Nevada | New Mexico | Utah |
|---|---|---|---|---|---|---|
| Marriage Penalty | No | Yes (differs) | No | n.a. (differs) | Yes (differs) | No |
| Married Couples Can File Separately on One Return | No | No | No | n.a. (differs) | No | No |
| Convenience Rule | No | No | No | No | No | No |
| Interest Taxed | Yes | Yes | Yes | n.a. (differs) | Yes | Yes |
| Dividends Taxed | Yes | Yes | Yes | n.a. (differs) | Yes | Yes |
| Capital Gains Taxed | Yes | Yes | Yes | n.a. (differs) | Yes | Yes |
| Combined Capital Gains Tax Rate | 1.875% | 13.3% (differs) | 4.4% (differs) | n.a. (differs) | 5.9% (differs) | 4.45% (differs) |
| Tax Brackets Indexed for Inflation | Yes | Partial (differs) | Yes | n.a. (differs) | No (differs) | Yes |
| Standard Deduction Indexed for Inflation | Yes | Yes | Yes | n.a. (differs) | Yes | Yes |
| Personal Exemption Indexed for Inflation | Yes | Yes | Yes | n.a. (differs) | Yes | Yes |
| Progressivity Ratio | 1.00 | 2.22 (differs) | 1.00 | n.a. (differs) | 1.37 (differs) | 1.00 |
Individual Income Taxes: Other Individual Base Variables
| Variable | Arizona | California | Colorado | Nevada | New Mexico | Utah |
|---|---|---|---|---|---|---|
| Federal Income Used as State Tax Base | Yes | Yes | Yes | n.a. (differs) | Yes | Yes |
| Conformity Status | Static (not current) | Static (not current) | Rolling (differs) | n.a. (differs) | Rolling (differs) | Rolling (differs) |
| Credits for Taxes Paid to Other States | Yes | Yes | Yes | n.a. (differs) | Yes | Yes |
| AMT Levied | No | Yes (differs) | Yes (differs) | n.a. (differs) | No | No |
| Recognition of S Corporation Status | Yes | Yes | Yes | Yes | Yes | Yes |
| Section 179 Expensing Limit | $2,560,000 | $25,000 (differs) | $2,560,000 | $2,560,000 | $2,560,000 | $2,560,000 |
| Tips | Exempt | Taxable (differs) | Exempt | n.a. (differs) | Taxable (differs) | Taxable (differs) |
| Overtime | Exempt | Taxable (differs) | Taxable (differs) | n.a. (differs) | Taxable (differs) | Taxable (differs) |
| Filing and Withholding Threshold Index | 5 | 0.849 (differs) | 0 (differs) | 10 (differs) | 2.5 (differs) | 3.333 (differs) |
Individual Income Taxes: Other Individual Income Variables
| Variable | Arizona | California | Colorado | Nevada | New Mexico | Utah |
|---|---|---|---|---|---|---|
| Income Recapture | No | No | No | n.a. (differs) | No | No |
Sales Taxes: Sales and Excise Tax Rates
| Variable | Arizona | California | Colorado | Nevada | New Mexico | Utah |
|---|---|---|---|---|---|---|
| State Sales Tax Rate | 5.60% | 7.25% (differs) | 2.90% (differs) | 6.85% (differs) | 4.88% (differs) | 6.10% (differs) |
| Average Local Sales Tax Rate | 2.94% | 1.78% (differs) | 4.99% (differs) | 1.39% (differs) | 2.80% (differs) | 1.32% (differs) |
| Maximum Local Sales Tax Rate | 5.30% | 5.25% (differs) | 9.10% (differs) | 1.525% (differs) | 4.5625% (differs) | 4.70% (differs) |
| Gasoline Tax (Cents per Gallon) | 19.00 | 73.64 (differs) | 30.18 (differs) | 24.81 (differs) | 18.88 (differs) | 32.55 (differs) |
| Diesel Tax (Cents per Gallon) | 19 | 92.94 (differs) | 35.68 (differs) | 27.75 (differs) | 22.88 (differs) | 38.55 (differs) |
| Cigarette Tax (Dollars per Pack of 20) | $2.00 | $2.87 (differs) | $2.24 (differs) | $1.80 (differs) | $2.00 | $2.20 (differs) |
| Beer Tax (Dollars per Gallon) | $0.16 | $0.20 (differs) | $0.08 (differs) | $0.16 | $0.41 (differs) | $0.4387 (differs) |
| Spirits Tax (Dollars per Gallon) | $3.00 | $3.30 (differs) | $2.28 (differs) | $3.60 (differs) | $6.06 (differs) | $16.07 (differs) |
| Vapor Tax Ratio to Cigarette Tax | n.a. | 201.1118% (differs) | 146.5333% (differs) | 78.50% (differs) | 27.7778% (differs) | 185.7833% (differs) |
Sales Taxes: Business-to-Business Exemptions
| Variable | Arizona | California | Colorado | Nevada | New Mexico | Utah |
|---|---|---|---|---|---|---|
| Business Inputs | Some Taxable | Some Taxable | Some Taxable | Some Taxable | Some Taxable | Some Taxable |
| Farm Equipment | Exempt | Partial (differs) | Exempt | Exempt | Partial (differs) | Exempt |
| Office Equipment | Taxable | Taxable | Taxable | Taxable | Taxable | Taxable |
| Manufacturing Machinery | Exempt | Partial (differs) | Exempt | Taxable (differs) | Exempt | Exempt |
| Manufacturing Raw Materials | Exempt | Exempt | Exempt | Exempt | Exempt | Exempt |
| Business Fuel and Utilities | Exempt | Taxable (differs) | Exempt | Taxable (differs) | Exempt | Exempt |
| Business Leases and Rentals | Taxable | Taxable | Taxable | Taxable | Taxable | Taxable |
| Information Services | Exempt | Exempt | Exempt | Exempt | Taxable (differs) | Exempt |
| Software as a Service (SaaS) | Taxable | Exempt (differs) | Exempt (differs) | Exempt (differs) | Taxable | Taxable |
| Platform as a Service (PaaS) | Taxable | Exempt (differs) | Exempt (differs) | Exempt (differs) | Taxable | Exempt (differs) |
| Digital B2B Products | Exempt | Exempt | Exempt | Exempt | Taxable (differs) | Exempt |
| Payroll Services | Exempt | Exempt | Exempt | Exempt | Taxable (differs) | Exempt |
| Data Center Purchases | Taxable | Taxable | Taxable | Partial (differs) | Partial (differs) | Exempt (differs) |
| Digital Advertising Tax | No | No | No | No | Yes (differs) | No |
Sales Taxes: Consumer Goods and Services in the Base
| Variable | Arizona | California | Colorado | Nevada | New Mexico | Utah |
|---|---|---|---|---|---|---|
| Groceries | Exempt | Exempt | Exempt | Exempt | Exempt | Alternate Rate (differs) |
| Clothing | Taxable | Taxable | Taxable | Taxable | Taxable | Taxable |
| Prescription Medication | Exempt | Exempt | Exempt | Exempt | Exempt | Exempt |
| Nonprescription Medication | Taxable | Taxable | Taxable | Taxable | Taxable | Taxable |
| Gasoline | Exempt | Alternate Rate (differs) | Exempt | Exempt | Exempt | Exempt |
| Landscaping | Taxable | Exempt (differs) | Exempt (differs) | Exempt (differs) | Taxable | Exempt (differs) |
| Repair Services | Exempt | Exempt | Exempt | Exempt | Taxable (differs) | Taxable (differs) |
| Real Estate Services | Exempt | Exempt | Exempt | Exempt | Taxable (differs) | Exempt |
| Parking | Taxable | Exempt (differs) | Exempt (differs) | Exempt (differs) | Taxable | Exempt (differs) |
| Dry Cleaning | Exempt | Exempt | Exempt | Exempt | Taxable (differs) | Taxable (differs) |
| Fitness Services | Taxable | Exempt (differs) | Exempt (differs) | Exempt (differs) | Taxable | Taxable |
| Barber Services | Exempt | Exempt | Exempt | Exempt | Taxable (differs) | Exempt |
| Veterinary Services | Exempt | Exempt | Exempt | Exempt | Taxable (differs) | Exempt |
| E-Books | Taxable | Exempt (differs) | Taxable | Exempt (differs) | Taxable | Taxable |
| Streaming Video | Taxable | Exempt (differs) | Taxable | Exempt (differs) | Taxable | Taxable |
| Medical Services | Exempt | Exempt | Exempt | Exempt | Taxable (differs) | Exempt |
| Legal Services | Exempt | Exempt | Exempt | Exempt | Taxable (differs) | Exempt |
| Financial Services | Exempt | Exempt | Exempt | Exempt | Taxable (differs) | Exempt |
| Accounting Services | Exempt | Exempt | Exempt | Exempt | Taxable (differs) | Exempt |
| Sales Tax Holiday | No | No | No | Yes (differs) | Yes (differs) | No |
Sales Taxes: Sales Tax Structure
| Variable | Arizona | California | Colorado | Nevada | New Mexico | Utah |
|---|---|---|---|---|---|---|
| Uniform Base Definitions | No | Yes (differs) | No | Yes (differs) | Yes (differs) | Yes (differs) |
| Unified Tax Administration | Yes | Yes | No (differs) | Yes | Yes | Yes |
| Safe Harbor for Remote Sellers | Gross Sales Threshold | Gross Sales Threshold | Gross Sales Threshold | Sales or Transactions Threshold (differs) | Gross Sales Threshold | Gross Sales Threshold |
Property Taxes: Property and Capital Stock Tax Rates
| Variable | Arizona | California | Colorado | Nevada | New Mexico | Utah |
|---|---|---|---|---|---|---|
| Property Tax Collections per Capita | $1,269 | $2,492 (differs) | $2,379 (differs) | $1,582 (differs) | $1,251 (differs) | $1,428 (differs) |
| Property Tax as a Percentage of Personal Income | 1.92% | 2.88% (differs) | 2.88% (differs) | 2.26% (differs) | 2.14% (differs) | 2.12% (differs) |
| Assessment Limit | Yes | Yes | No (differs) | No (differs) | Yes | No (differs) |
| Levy Limit | Yes | No (differs) | Yes | Yes | Yes | No (differs) |
| Capital Stock Tax Rate | None | None | None | None | None | None |
| Capital Stock Tax Maximum Payment | n.a. | n.a. | n.a. | n.a. | n.a. | n.a. |
| Payment Options for Capital Stock and Corporate Income Taxes | n.a. | n.a. | n.a. | n.a. | n.a. | n.a. |
Property Taxes: Property Tax Bases
| Variable | Arizona | California | Colorado | Nevada | New Mexico | Utah |
|---|---|---|---|---|---|---|
| Tangible Personal Property Tax | Yes | Yes | Yes | Yes | No (differs) | Yes |
| Tangible Personal Property De Minimis Exemption | $500,000 | None (differs) | $56,000 (differs) | None (differs) | n.a. (differs) | $30,100 (differs) |
| Intangible Property Tax | No | No | No | No | No | No |
| Inventory Tax | No | No | No | No | No | No |
| Real Estate Transfer Tax | No | Yes (differs) | Yes (differs) | Yes (differs) | No | No |
| Split Roll | Yes | No (differs) | Yes | No (differs) | Yes | Yes |
| Split Roll Ratio | 1.55 | 1.00 (differs) | 3.82 (differs) | 1.00 (differs) | 1.11 (differs) | 1.82 (differs) |
| Estate Tax | No | No | No | No | No | No |
| Inheritance Tax | No | No | No | No | No | No |
| Gift Tax | No | No | No | No | No | No |
Unemployment Insurance Taxes: UI Tax Rates
| Variable | Arizona | California | Colorado | Nevada | New Mexico | Utah |
|---|---|---|---|---|---|---|
| Minimum Rate | 0.03% | 1.60% (differs) | 0.72% (differs) | 0.30% (differs) | 0.33% (differs) | 0.10% (differs) |
| Maximum Rate | 8.36% | 6.20% (differs) | 10.85% (differs) | 5.40% (differs) | 6.40% (differs) | 7.10% (differs) |
| Taxable Wage Base | $8,000 | $7,000 (differs) | $30,600 (differs) | $43,700 (differs) | $34,800 (differs) | $50,700 (differs) |
| Most Favorable Schedule: Minimum Rate | 0.02% | 0.10% (differs) | 0.51% (differs) | 0.25% (differs) | 0.33% (differs) | 0.00% (differs) |
| Most Favorable Schedule: Maximum Rate | 5.40% | 5.40% | 6.28% (differs) | 5.40% | 5.40% | 7.00% (differs) |
| Least Favorable Schedule: Minimum Rate | 0.02% | 1.50% (differs) | 0.75% (differs) | 0.25% (differs) | 0.33% (differs) | 0.00% (differs) |
| Least Favorable Schedule: Maximum Rate | 5.40% | 6.20% (differs) | 10.39% (differs) | 5.40% | 5.40% | 7.00% (differs) |
| Employer Contributions as a Share of Total Wages | 0.20% | 0.33% (differs) | 0.62% (differs) | 0.97% (differs) | 0.45% (differs) | 0.35% (differs) |
| Employer Contributions as a Share of Taxable Wages | 1.25% | 3.22% (differs) | 1.86% (differs) | 1.70% (differs) | 0.86% (differs) | 0.61% (differs) |
| Trust Fund Solvency Ratio | 0.9 | 0 (differs) | 0.4 (differs) | 0.83 (differs) | 0.56 (differs) | 1.15 (differs) |
| New Employer Rate | 2.00% | 3.40% (differs) | 1.70% (differs) | 2.95% (differs) | 1.00% (differs) | 3.00% (differs) |
Unemployment Insurance Taxes: Experience Formulas and Charging Methods
| Variable | Arizona | California | Colorado | Nevada | New Mexico | Utah |
|---|---|---|---|---|---|---|
| Experience Formula Based On | Reserve Ratio | Reserve Ratio | Reserve Ratio | Reserve Ratio | Benefits Ratio (differs) | Benefits Ratio (differs) |
| Benefits Charged in Proportion to Base-Period Wages | Yes | Yes | No (base-period employers in inverse chronological order) (differs) | No (most recent or principal employer) (differs) | Yes | Yes |
| Charged If Employee's Benefit Award Is Reversed | No | No | No | Yes (differs) | No | No |
| Charged for Reimbursements on Combined Wage Claims | No | Yes (differs) | No | No | Yes (differs) | No |
| Charged If Employee Left Voluntarily | No | No | No | No | No | No |
| Charged If Employee Was Discharged for Misconduct | No | No | No | No | No | No |
| Charged If Employee Refused Suitable Work | Yes | Yes | Yes | Yes | No (differs) | Yes |
| Charged If Employee Continues to Work Part-Time | No | No | No | Yes (differs) | No | No |
Unemployment Insurance Taxes: Other UI Base Variables
| Variable | Arizona | California | Colorado | Nevada | New Mexico | Utah |
|---|---|---|---|---|---|---|
| Solvency Tax | No | Yes (differs) | Yes (differs) | No | No | No |
| Taxes for Socialized Costs or Negative Balance Employers | No | No | No | No | No | Yes (differs) |
| Loan and Interest Repayment Surtaxes | Yes | No (differs) | Yes | Yes | No (differs) | No (differs) |
| Reserve Taxes | No | No | No | No | No | No |
| Surtaxes for UI Administration or Non-UI Purposes | No | Yes (differs) | No | Yes (differs) | No | No |
| Temporary Disability Insurance | No | Yes (differs) | No | No | No | No |
| Voluntary Contributions | Yes | Yes | Yes | No (differs) | Yes | No (differs) |
| Years to Qualify for Experience Rating | 2 | 3 (differs) | 1 (differs) | 3 (differs) | 2 | 1 (differs) |
Share This Page
About the Authors
Janelle Fritts is a Senior Policy Analyst with the Tax Foundation’s Center for State Tax Policy. She is the lead researcher on the annual State Tax Competitiveness Index and serves as a resource to policymakers in their efforts to modernize and improve the structures of their state tax codes. Her work has been cited in The New York Times, the Associated Press, Bloomberg, and numerous state media outlets across the country.
Jared Walczak is a Senior Fellow at the Tax Foundation, where he spent five years as Vice President of State Projects, and president of Walczak Policy Consulting.
Nicole Fox is a Policy Analyst with the Center for State Tax Policy at the Tax Foundation, where she serves as a resource to policymakers in their efforts to modernize and improve the structure of their state tax codes.
Katherine Loughead is the Vice President of State Tax Policy at the Tax Foundation, where she oversees the state tax policy team’s research agenda and serves as a resource to policymakers in their efforts to modernize and improve the structure of their state tax codes.
Media Contacts
Sarah Wilbur
Sarah Wilbur is Communications Manager at the Tax Foundation where she advances the organization’s institutional reach by developing its corporate communications and media programs.
Jesse Solis
Jesse Solis is Vice President of Communications at the Tax Foundation, where he leads the communications team and works to build coverage of Tax Foundation’s experts and their work across the globe. He joined the team in 2021 as Communications Manager and became Communications Director in 2024.