State Income Tax Range: 2% (on taxable income from $5,000 to $9,999 for taxpayers with net income of $84,500 or less, and on the first $4,300 of net income for taxpayers with net income over $84,500) - 4.9% (on taxable income from $23,600 to $84,500 for taxpayers with net income of $84,500 or less, and on taxable income over $8,500 for taxpayers with net income over $84,500).However, Arizona does not have an estate or inheritance tax, which makes it a more attractive retirement destination for wealthier seniors.įor more information, see the Arizona State Tax Guide (opens in new tab). Sales taxes are above average in the state - the average combined (state and local) rate is 8.37%, which is the 11th-highest in the nation. (Beginning in 2023, a flat rate of 2.5% applies.) While plenty of other states have more generous exemptions, Arizona's low income tax rates for most people keep the net burden down. Military retirement income is tax-free in Arizona, too. The Grand Canyon State exempts Social Security benefits from state income taxes, plus up to $2,500 of income from federal and Arizona government retirement plans. Sunshine, sunshine, sunshine - and low taxes. Median Property Tax Rate: $508 per $100,000 of assessed home value.Average Combined State and Local Sales Tax Rate: 8.37%.
State Income Tax Range: 2.55% (on up to $57,305 of taxable income for married filers and up to $28,653 for single filers) - 2.98% (on taxable income over $57,305 for married joint filers and over $28,653 for single filers).