Arizona

Financial data for local governments across Arizona

46 Cities

15 Counties

45 Towns

376 CDPs

Tax Snapshot (Beta)

Beta: source-backed tax context only. This is not a personalized tax-burden estimate.

Current source-backed tax context for Arizona.

Component	Summary	Effective	Coverage	Sources
AZ state individual income tax	Arizona taxes every filing status at a flat 2.5%, applied to Arizona adjusted gross income after a standard deduction of $14,600 single or married filing separately, $21,900 head of household and $29,200 married filing jointly for tax year 2024, rising to $15,750, $23,625 and $31,500 for 2025 (the 2026 tax omnibus, H.B. 4168 / S.B. 1861, legislated the 2025 amounts retroactive to January 1). Arizona grants no personal or dependent exemption — both were repealed in 2019 when the standard deduction was coupled to the federal amount. The calculator applies the $25-per-dependent floor of the dependent tax credit, the family income tax credit, and the refundable increased excise tax credit, and discloses what it cannot model — headed by the extra $75 Arizona pays for each dependent under seventeen, whose ages we do not collect. No Arizona county, city, town or other political subdivision levies an income tax — A.R.S. § 43-201 preempts the field outright, for as long as the urban revenue sharing fund of § 43-206 is maintained.	Tax years 2024 and 2025.	Source verified	Arizona DOR 2025 Form 140 instructions; Arizona DOR 2024 Form 140; Arizona DOR Individual Income Tax Updates, January 2025; A.R.S. section 43-201, preemption by state of income taxation; A.R.S. section 43-206, urban revenue sharing fund; Arizona Legislature S.B. 1861 / H.B. 4168 enacted fact sheet
AZ transaction privilege/use tax (state base)	Arizona state transaction privilege/use tax rate is 5.6%; local city and county rates can apply in addition.	Current ADOR guidance (as accessed April 18, 2026).	Rate missing	Arizona understanding use tax; Arizona transaction privilege tax
AZ property tax policy (state-county administration)	Arizona property tax administration is shared by ADOR and county assessors/treasurers, with local jurisdictions setting overall rates.	Current ADOR guidance (as accessed April 18, 2026).	Needs review	Arizona property tax; Arizona property tax FAQs

Retirement income taxes in Arizona

Tax year 2026. Verified 2026-10-08.

Retirement income

Social Security

Not taxed: exempt from the state income tax.

Sources (4)

Government pensions and plans, in-state and federal

Partly taxed: The first $2,500 a year is exempt; the rest is taxed. The exemption covers a pension or retirement plan of the federal government, of the State of Arizona and of an Arizona county, city or town; it is one $2,500 per person (each spouse's own on a joint return, as the Department's 2025 instructions apply it); no age or income test.

Sources (6)

Government pensions and plans from other states

Taxed.

Sources (8)

Military retired pay

Not taxed: exempt from the state income tax.

Sources (4)

Private pensions

Taxed.

Sources (9)

Private employer plan withdrawals (401(k) and similar)

Taxed.

Sources (7)

IRA withdrawals

Taxed.

Sources (8)

Dividends and interest

Taxed.

Sources (11)

Capital gains

Partly taxed: Long-term gains on assets acquired after 2011 are taxed on three quarters of the gain (a 25 percent subtraction, only where the acquisition date can be verified); short-term gains, and long-term gains on assets acquired before 2012, are taxed in full, except that gain from an installment sale which another state properly taxed in an earlier year is subtracted in the year Arizona would tax it (not gain both states tax in the same year, which may get a credit instead); two narrow kinds of gain are exempt whole, from a qualified Arizona small business and from exchanging one legal tender for another.

Sources (9)

A deduction for all income, by age or low income

Yes: By age: an exemption of $2,100 for each taxpayer who is 65 or older before the year's end and is not claimed as another taxpayer's dependent, on a separate or a joint return (and another $2,100 for a spouse who is 65 or older and not another taxpayer's dependent, on a joint return only), with no income test; and, for tax years 2025 through 2028, Arizona subtracts whatever the federal return deducts as the senior deduction (up to $6,000 per person 65 or older, reduced by 6 percent of modified adjusted gross income over $75,000, $150,000 on a joint return), on the federal return's own conditions, among them a Social Security number of the kind federal law requires and a joint return for a married person.

Sources (20)

Other state taxes on this income

None.

Sources (12)

Local income taxes

None.

A state statute bars every county, city, town and other political subdivision from levying an income tax, for as long as the state maintains its urban revenue sharing fund, which current law establishes (A.R.S. §§ 43-201 and 43-206). A charter county's taxing power is subject to state law, so the ban binds it too. No local tax on wages or payroll under another name exists either; for that part this rests on a search, not on a ban: no state law we read lets a local government levy one, the general powers we read name none, and the Census count for fiscal year 2022 shows no Arizona local government with an individual income tax.

Sources (26)