Arizona Income Tax at a Glance
Arizona has a flat 2.5% state income tax — one of the lowest in the nation. Sales tax is 5.6% state + up to 5.5% local (Phoenix: 8.6%). Property taxes are moderate (~0.6% effective). No tax on Social Security. Retiree-friendly.
How Arizona's Tax Compares
Arizona has a cost of living index of 102 (where 100 is the national average), putting it 2% above average. This means a $75,000 salary in Arizona has the purchasing power of about $73,529 in an average-cost state.
Take-Home Pay by Salary in Arizona
Here is the approximate Arizona state tax on common salary levels for a single filer taking the standard deduction:
| Annual Salary | State Effective Rate | Est. State Tax |
|---|---|---|
| $50,000 | 2.5% | $1,250 |
| $75,000 | 2.5% | $1,875 |
| $100,000 | 2.5% | $2,500 |
| $150,000 | 2.5% | $3,750 |
| $250,000 | 2.5% | $6,250 |
These are state-only estimates. Your paycheck also loses federal tax (10-37% progressive) and FICA (7.65%). Use our tax calculator pre-filled for Arizona to see the full picture.
Largest Cities in Arizona
Arizona's population centers, each with their own local tax quirks, property tax rates, and cost of living:
Common Arizona Deductions & Credits
- Standard deduction — varies by state; most states mirror or reduce the federal amount
- Retirement account contributions — 401(k), IRA, HSA typically deductible (check state conformity)
- Charitable giving — if you itemize on state return
- Mortgage interest — if itemizing
- State-specific credits — earned income tax credits, child tax credits, property tax credits
Is Arizona a Tax-Friendly State?
It depends on income. Lower earners pay relatively little. Higher earners in Arizona face one of the heavier combined federal + state burdens. See how you compare with our tax calculator.
Arizona vs No-Tax States
If you earn $100,000 in Arizona, your state tax is roughly $2,500. In Texas, Florida, or Washington, you would pay $0. Over 30 years of work, that difference compounds into a real retirement-size gap. But cost of living, property tax, and quality-of-life factors matter too — don't move just for the tax.