Arizona variant. This is a Arizona-specific version of the Stock Sale Capital Gains Tax Estimator, using pre-defined local figures (tax rates, median home and income values, and typical regional costs). For the full formula, methodology, and FAQ, open the main Stock Sale Capital Gains Tax Estimator.
Most states tax capital gains as ordinary income. In Arizona, that means a top rate of 2.5% on gains.
Capital gains tax in Arizona
Federally, long-term gains are taxed at 0%, 15%, or 20% depending on income, plus a possible 3.8% net investment income tax. Arizona then taxes the same gains as ordinary income at up to 2.5%.
Short-term gains (assets held under a year) are taxed as ordinary income at both levels - usually the most expensive outcome.
About taxes and housing in Arizona
Arizona uses a flat individual income tax of 2.5%, one of the lowest flat rates in the nation.
Arizona keeps property taxes relatively low and limits how much a primary residence's taxable value can rise each year.
Arizona's economy is driven by technology, tourism, and rapid population growth, with a warm climate that attracts retirees and remote workers.
Worked example: $50,000 long-term gain
A $50,000 long-term gain: federal 15% = $7,500, plus Arizona state tax up to 2.5% = $1,250, for a combined bill near $8,750.
Quick reference
- State income tax: Flat 2.5% as of 2023
- State sales tax: 5.6% (plus 2.80% avg local)
- Median home value: $425,000
- Median household income: $74,568
- Effective property tax rate: 0.51%
- Avg auto insurance: $1,812/yr
Frequently Asked Questions
Does Arizona tax capital gains?
Yes - Arizona taxes capital gains as ordinary income at up to 2.5%.
What's the difference between short and long-term gains?
Assets held over a year get preferential long-term federal rates (0/15/20%); shorter holds are taxed as ordinary income.