Arizona variant. This is a Arizona-specific version of the Income Tax Calculator, 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 Income Tax Calculator.
Arizona income tax (Flat 2.5% as of 2023) stacks on top of federal tax. Understanding both layers is essential to estimating your total Arizona tax bill.
Arizona state income tax structure
Arizona taxes income at Flat 2.5% as of 2023, with a top marginal rate of 2.5%. Like the federal system, only income within each bracket is taxed at that bracket's rate.
Federal brackets (10%–37%) apply nationwide. Combine your federal effective rate with the Arizona rate to find your true marginal tax on the next dollar earned.
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: state tax on $74,568
Using the 2.5% top rate as a ceiling, state income tax on $74,568 is at most about $1,864; the actual figure is lower after brackets and deductions.
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 have state income tax?
Yes - Flat 2.5% as of 2023, topping out at 2.5%.
What is the top tax rate in Arizona?
The top marginal state rate is 2.5%.