Does Arizona have a state income tax?

Yes. Arizona has a state income tax with a top rate of 2.5%.

How much is Arizona state tax on a $100,000 salary?

On a $100,000 salary in Arizona, state income tax is approximately $2,098. Your estimated total take-home pay is $77,083/year.

What other taxes does Arizona have?

Arizona has a 5.6% state sales tax. Local taxes push Scottsdale/Tempe rates to ~8.1% and Phoenix to ~8.6%. No estate or inheritance tax.

How does Arizona compare to other states for taxes?

Arizona's top rate of 2.5% compares favorably — below the national median for state income taxes.

What is Arizona's state income tax rate?

Arizona's flat income tax rate is 2.5% on all taxable income. This is among the lowest rates in the US for states that do levy an income tax, making Arizona very competitive for workers relocating from high-tax states.

Did Arizona cut its income tax recently?

Yes. Arizona enacted major tax reform between 2021–2022, collapsing a multi-bracket system with a top rate of 8% down to a single flat rate of 2.5%. The flat rate took full effect in 2023.

How does Arizona compare to Nevada for taxes?

Nevada has no income tax at all, giving it an edge over Arizona's 2.5%. However, Nevada's sales taxes are higher (6.85% base) and housing costs in Las Vegas are rising. For most middle-income workers, the difference in take-home pay is modest.

Does Arizona have a standard deduction?

Yes. Arizona conforms closely to federal standard deduction amounts — $13,850 for single filers and $27,700 for married filing jointly. Taxpayers can also itemize using Arizona-specific rules.

State Tax Guide

Arizona State Income Tax Guide (2026)

Arizona has a flat state income tax rate of 2.5% — one of the lowest income tax rates in the entire US, achieved through major tax reforms in 2022.

Top State Rate

2.5%

$100k Take-Home

$77,083

/year (single)

State Tax on $100k

$2,098

single filer

Arizona Income Tax Brackets (2026)

Marginal Rate	Taxable Income (Single Filer)
2.5%	$0→All income

Each rate applies only to income within that bracket. Your effective rate is the average across all brackets — meaningfully lower than your top marginal rate.

Standard deduction: $13,850 single / $27,700 married filing jointly

Brackets reflect the most recently published schedules. Some states inflation-index thresholds annually — specific 2026 amounts may shift slightly. Verify with your state's Department of Revenue before filing.

$100,000 Salary in Arizona — Full Tax Breakdown

Category	Annual	Monthly
Gross Salary	$100,000	$8,333
Federal Tax	−$13,170	−$1,098
FICA (SS + Medicare)	−$0.00	−$0.00
Arizona State Tax	−$2,098	−$175
Take-Home Pay	$77,083	$6,424

Assumes single filing status, standard deduction, no 401(k) or HSA contributions. 2026 tax year.

Run your numbers through the right calculator

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Bonus Calculator

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The 30-second version

1.Arizona has a flat 2.5% income tax — the lowest of any state with an income tax. Achieved via major reform in 2021–2022 (S.B. 1828) that collapsed a 4-bracket system with a top rate of 4.5% (and a temporary 8% surcharge that was repealed) into a single flat rate.
2.AZ conforms closely to federal standard deduction ($13,850 single / $27,700 MFJ for 2026 — slightly below federal $15K/$30K). So your AZ taxable income is close to your federal taxable income.
3.Phoenix metro is one of the fastest-growing US tech corridors (TSMC fab in Phoenix, Intel Chandler, Insight Enterprises HQ, dozens of growth-stage startups). Combined with low income tax, the AZ tech worker take-home advantage vs CA is substantial.
4.Snowbird / retirement-friendly: SS fully exempt, low property tax (~0.6% effective average), no estate tax. AZ is among the top 5 retirement-relocation destinations.
5.Sales tax stacks high — 5.6% state + local often pushing to 8.4% in Phoenix and 8.1% in Scottsdale. The trade-off for the low income tax.

Why you can trust these numbers

Numbers reflect 2026 IRS federal brackets, FICA caps, and the current Arizona Department of Revenue 2.5% flat rate. The calculator at the top reflects this directly. For typical W-2 earners, the calculator output is essentially equal to your actual AZ bill.

Sources: federal brackets + standard deduction from IRS Rev. Proc. 2025-32; state brackets verified against the Tax Foundation 2026 State Income Tax Rates compilation and the official Form 140 Individual Income Tax Forms (AZ Department of Revenue).

The flat 2.5% — among the most competitive in the country

Arizona's 2.5% flat income tax is the result of major tax reform passed in 2021 (S.B. 1828) and accelerated to full effect in 2023. The previous structure had 4 brackets ranging from 2.59% to 4.5%, plus a temporary 8% surcharge on income above $250,000 (Proposition 208, since invalidated). The new flat rate dramatically simplified the AZ tax code and made it the lowest income tax rate among states that levy one.

AZ standard deduction ($13,850 single / $27,700 MFJ for 2026) is slightly below the federal $16,100 / $32,200 figure but close enough that most filers experience near-conformity. Personal exemptions are zero (AZ eliminated personal exemptions in the 2018 federal conformity update).

What you'll actually pay — two real-life scenarios

Two scenarios to anchor the math. The calculator at the top handles your specific number.

Illustrative — single filer unless noted, federal standard deduction, full-year AZ residency, W-2 income unless specified. Two-earner MFJ households pay more FICA than the calculator shows. Ballparks, not invoices.

Scenario 1: Phoenix tech worker (TSMC/Intel area), $135,000

Federal income tax	~$21,300
Arizona income tax (2.5% × $120K taxable)	~$3,000
FICA (Social Security + Medicare)	~$10,350
Total income taxes	~$34,650
Annual take-home	~$100,350
Effective AZ tax rate	~2.2%

Phoenix-area tech worker — TSMC Arizona fab, Intel Chandler, Insight, Banner Health, or one of the growing fintech operations in the Phoenix metro. Same comp in California: ~$8,000 CA state tax. AZ saves $5,000/year in income tax — combined with Phoenix's lower cost of living, the after-tax wage advantage is meaningful. Many CA tech workers have made this move in the past 5 years.

Scenario 2: Scottsdale retired couple, $180,000 MFJ

Federal income tax (after SS partial taxation)	~$21,200
Arizona income tax (after SS exemption)	~$3,125
FICA	$0 (retirement income exempt)
Total income taxes	~$24,325
Annual take-home	~$155,675
Effective AZ tax rate	~1.7%

Composition: $50K Social Security + $80K pension + $30K IRA + $20K dividends/interest = $180K MFJ. AZ exempts SS fully and offers a $2,500 federal/state pension subtraction. Same income in CA: ~$10K state tax — a $7K/year delta. Combined with cheaper Scottsdale housing vs equivalent California retirement communities, AZ is a powerful retirement-relocation choice.

Property tax + the AZ retiree advantage

AZ property tax effective rates by county (approximate, primary residence): Maricopa (Phoenix metro) ~0.55%, Pima (Tucson) ~0.85%, Pinal (Casa Grande/San Tan Valley) ~0.65%, Yavapai (Sedona/Prescott) ~0.55%, Coconino (Flagstaff) ~0.62%. Statewide average is ~0.62% — among the lowest in the country, behind only Hawaii, Alabama, and Colorado.

Senior Property Valuation Protection Option (Senior Freeze) for ages 65+ with limited income freezes the property's full cash value at the year of qualification. Combined with the low effective rate baseline, AZ retirees often pay $1,500–$3,000/year in property tax on a $400K home.

Things financially comfortable Arizonans actually do

Max your 401(k) ($24,500 in 2026) — pre-tax for federal AND Arizona.
Max your HSA if eligible — pre-tax for federal AND AZ.
Backdoor Roth IRA — fully legal, well-established, mostly free.
Mega backdoor Roth if your employer's 401(k) plan allows after-tax contributions.
AZ529 (Arizona Family College Savings Program) — AZ allows a state-tax deduction up to $2,000 single / $4,000 MFJ per beneficiary annually for contributions to any 529 plan. Modest but worth claiming.
Senior Property Valuation Protection — file with your county assessor at age 65 if income-eligible. Locks in your property's full cash value, capping property tax growth.
Conservation easement and historic property tax classifications — for qualifying rural and historic properties, AZ offers significant assessment reductions.

Real questions people actually ask

Q: Is Arizona's 2.5% flat tax really permanent?

It's statutory, not constitutional, so a future legislature could change it. But the political fight to enact the flat tax was substantial (2021's S.B. 1828) and the 2022 ballot referendum to repeal it failed. Realistically, plan around 2.5% for the foreseeable future. AZ has been on a multi-decade trajectory of income tax reduction.

Q: Does AZ tax my retirement income?

Partially. SS is fully exempt. Federal civil service and military retirement: $2,500 subtraction (modest). Private pensions and IRA/401(k) distributions: taxed at 2.5% on AZ taxable income. Combined with the very low rate, AZ is genuinely retirement-friendly. SS at $40K + pension at $40K + IRA at $30K for a 65+ filer: $40K SS exempt + $2,500 pension subtraction = AZ taxable on $67,500; AZ tax = ~$1,690. Modest.

Q: How does AZ compare to NV for tax?

NV has zero income tax (better than AZ's 2.5%). NV sales tax is similar (8.38% Las Vegas vs 8.6% Phoenix). NV property tax average ~0.55%, AZ ~0.62% — comparable. For pure tax minimization, NV wins by $2,500–$5,000/year for typical professionals. But AZ's economy is more diversified (tech beyond gaming/hospitality), and Phoenix housing/lifestyle differs substantially from Las Vegas.

Q: Will Phoenix's tech boom continue?

Indicators positive: TSMC committed $65B+ to Phoenix fabs through 2030, Intel Chandler is expanding, multiple fintech and SaaS operations have relocated from California. The water situation is the long-term risk — Colorado River allocation cuts and groundwater depletion are real factors for Phoenix metro growth. Most relocators don't price this in but should.

Our honest opinion (which is just an opinion)

Arizona is among the best tax states in the country for working professionals and retirees. The 2.5% flat rate is the lowest of any state with an income tax, property tax is among the lowest, and there's no estate tax. The trade-off is a high sales tax stack and the long-term water question — neither immediately financially obvious but both real.

The case for Arizona:

2.5% flat rate — lowest of any state with income tax
Property tax among the lowest in the country (~0.62%)
No state estate or inheritance tax
SS exempt; modest pension subtractions
Phoenix tech/biotech growth + lower cost of living than CA
Senior Freeze + retirement-friendly structure
300+ days of sunshine annually

The case against:

Sales tax 8.4–8.6% in metros — among the higher
Water/Colorado River allocation is a long-term risk
Summer heat (June–September) is genuinely brutal — 105–115°F daily
AZ standard deduction is slightly below federal — minor non-conformity

Honest take: if you're a tech worker, retiree, or anyone with flexible domicile considering CA-vs-AZ, AZ is almost always the right financial answer. The tax math is excellent, cost of living is reasonable, and the lifestyle works for most people who can handle the heat. For pure tax minimization, NV/TX/FL beat AZ marginally — but AZ's job market depth often makes the small income-tax cost worthwhile.

What now

Run your numbers in the calculator above. The AZ line is small and predictable. If you're 65+, file the Senior Freeze with your county assessor. If you have kids, max AZ529 contributions. The biggest tax mistake most Arizonans make isn't paying too much state income tax — it's missing the Senior Freeze or letting AZ529 deduction slip.

Sources & further reading

A few honest notes

Not personal tax, legal, or financial advice. Verify with a licensed CPA, EA, or tax attorney before making meaningful decisions.
Tax law changes. This guide reflects 2026 IRS schedules and current AZ DOR rules.
Property tax estimates vary by county and valuation cycle — check your county assessor's website for your specific parcel.
The numbers are illustrative — scenarios don't include every credit, deduction, or wrinkle that might apply to you.
No client relationship is created by reading this page.

Last updated April 2026 with 2026 IRS schedules and current AZ DOR guidance.