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. Arizona’s tax system ranks 15th overall on the 2025 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 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?
Subscribe to get insights from our trusted experts delivered straight to your inbox.
Subscribe
Get facts about taxes in your state and around the U.S.
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.
115 min read
Tax burdens rose across the country as pandemic-era economic changes caused taxable income, activities, and property values to rise faster than net national product. Tax burdens in 2020, 2021, and 2022 are all higher than in any other year since 1978.
24 min read
Some European countries have raised their statutory corporate rates over the past year, including Czechia, Estonia, Iceland, Lithuania, and Slovenia.
3 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?
12 min read
Retail sales taxes are an essential part of most states’ revenue toolkits, responsible for 24 percent of combined state and local tax collections.
15 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
Does your state have a small business exemption for machinery and equipment?
4 min read
One area of the tax code in which extreme complexity and low compliance go hand-in-hand—and where reform is desperately needed—is in states’ nonresident individual income tax filing and withholding laws.
7 min read
The trend of tax exemptions on tips, overtime, and bonuses may sound like a win for workers, but it is a shortsighted fix with long-term drawbacks.
11 min read
Many states regulate and tax legal marijuana sales and consumption, despite the ongoing federal prohibition. Explore the data here.
8 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
The amount of revenue states raise through roadway-related revenues varies significantly across the US. Only three states raise enough revenue to fully cover their highway spending.
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
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?
12 min read
Retail sales taxes are an essential part of most states’ revenue toolkits, responsible for 24 percent of combined state and local tax collections.
15 min read
As a rule, an individual’s income can be taxed both by the state in which the taxpayer resides and by the state in which the taxpayer’s income is earned.
52 min read