How taxes work in Arizona
Sales tax. Arizona charges a 5.6% statewide sales tax, and counties, cities and special districts add their own on top — which is why the average combined rate of about 8.4% is the number that matters at the till. Groceries are exempt from the state transaction privilege tax, but some cities tax food for home consumption.
Property tax. At an average effective rate of about 0.51%, a $350,000 home in Arizona carries roughly $1,785 a year in property tax before exemptions. Arizona is a low-property-tax state, which quietly lowers the true cost of owning there. Local assessors set actual bills, so verify with the county for any specific property.
Income tax. Flat 2.5% income tax — the lowest flat rate in the US. If you are self-employed in Arizona, you still owe federal self-employment tax plus quarterly state estimates where applicable.
Sales tax · average combined
Property tax · average effective
Chart: DailyFinance.tools · Rates are reviewed averages from our state tax dataset — your exact local rate may differ.
How Arizona compares with similar states
The states closest to Arizona on average combined sales tax. Property tax is the average effective rate; income tax shows the structure, not a single rate.
| State | Combined sales tax | Property tax | Income tax |
|---|---|---|---|
| Arizona (this page) | 8.4% | 0.51% | Flat |
| New York | 8.53% | 1.73% | Progressive |
| Missouri | 8.35% | 0.97% | Progressive |
| Nevada | 8.23% | 0.53% | None |
| Texas | 8.2% | 1.6% | None |
| All-state average (51 entries) | 6.61% | 1.04% | — |
What this means for your money in Arizona
Property tax is light in Arizona: an average effective rate of 0.51% ranks 49 of 51, well below the all-state average of 1.04%. A $400,000 home carries about $2,040 a year. Low property tax lowers the fixed cost of owning, which partly offsets whatever the state's income and sales taxes take.
Read together: Arizona combines an average combined sales tax of 8.4% (rank 11 of 51), an average effective property tax of 0.51% (rank 49 of 51) and a flat state income tax. A household comparing states should compare all three against its own pattern — a high earner who rents weighs the income tax most; a homeowner on a fixed income weighs the property tax most.
Major cities in Arizona
Phoenix, Tucson, Mesa, Chandler, Scottsdale. Combined sales-tax rates differ between these cities — sometimes by more than a full percentage point inside the same state — because county and city layers stack on the state base. The Arizona sales tax guide breaks down the calculation and links the calculator where you can enter your exact local rate.
Calculators for Arizona residents
- Arizona Sales Tax Guide & Examples — what you actually pay, with worked amounts.
- Sales Tax & VAT Calculator — add or extract tax at any rate, including your exact Arizona local rate.
- Mortgage Calculator — include Arizona property tax in the monthly payment.
- Property Tax Calculator — estimate a specific property's bill.
- Self-Employment Tax Calculator — federal SE tax for Arizona freelancers.