Arizona state taxes at a glance
| Individual income tax | Flat-rate income tax |
|---|---|
| Rate structure | A flat 2.5% individual income tax rate, according to the Arizona Department of Revenue, applied after Arizona’s own standard deduction and credits. Verify current-year figures. |
| Tax agency | Arizona Department of Revenue (ADOR) |
| Main individual return | Form 140 (full-year residents); Form 140A or 140EZ for simple returns that qualify; Form 140NR (nonresidents); Form 140PY (part-year) |
| Local income taxes | No local income taxes. |
| Sales tax | Arizona calls its sales tax the Transaction Privilege Tax (TPT). A state rate plus county and city rates; Tax Foundation’s mid-2026 data show a combined average of roughly 8.5%. |
| Property tax | Assessed by counties. Arizona limits how fast the taxable (limited property) value of a property can grow each year; the state also has a property tax credit for certain low-income owners and renters. |
| Retirement & Social Security | Arizona does not tax Social Security benefits. Other retirement income is generally taxable, with a subtraction for certain government pensions; check ADOR guidance. |
Verify current-year figures: state rates, brackets, credits and filing rules change. Treat this page as a starting orientation and confirm details on the Arizona Department of Revenue (ADOR) website.
How Arizona income tax works
Arizona replaced its old multi-bracket system with a single rate, and ADOR now states a flat 2.5% for tax year 2023 and beyond. Tax Foundation’s 2026 table lists Arizona at the lowest top rate in the country, tied with North Dakota. Because there is only one rate, ADOR no longer publishes the old optional or “X and Y” tax tables; instead the tax is a straight calculation on Arizona taxable income.
The return starts from federal adjusted gross income. From there Arizona applies its own standard deduction, which Tax Foundation reports as conforming to an older federal amount for 2026 ($8,350 single, $16,700 joint) while legislators consider updating the state’s tie to the federal tax code. Because that conformity can change by legislation, do not assume Arizona’s deduction equals the larger federal one. Arizona also lets some filers increase the standard deduction by a percentage of what they would have deducted as charitable giving, and replaces the dependent exemption with a dependent tax credit that phases out at higher incomes.
Arizona’s sales tax has an unusual name and legal structure. The Transaction Privilege Tax (TPT) is technically a tax on the seller’s privilege of doing business, which sellers usually pass along to buyers on the receipt. Rates stack from the state, county and city, and there are cities that collect their own. If you sell goods or taxable services, you generally need a TPT license from ADOR; see ADOR’s business pages for details.
Filing your Arizona return and free options
Which Arizona form you use depends on your situation. ADOR says you must use Form 140 rather than the simpler forms if your Arizona taxable income is $50,000 or more, you make adjustments to income, you itemize, you increase the standard deduction for charitable gifts, you claim certain credits, or you pay estimated tax. Arizona e-filing is processed through the IRS first, so the state’s e-file season opens when the IRS season does.
For free filing, ADOR points to the Free File Alliance: partner software that is typically free for taxpayers with AGI of $89,000 or less, with each provider setting its own rules; go through the links on ADOR’s page so your state return is included at no cost. If you are above that limit, ADOR offers fillable (non-calculating) PDF forms you can type and mail, which is faster than handwriting. Free in-person help comes through AARP Tax-Aide and VITA. For the federal return, see IRS Free File eligibility.
For the federal side, see our guides to free federal filing options and the complete guide to filing taxes.
Things Arizona residents often ask about
- Reverse-credit commuters: Tax Foundation notes Arizona, California, Indiana, Oregon and Virginia use “reverse credit” arrangements, which affect where residents report income earned in those states. Read the instructions before filing in two states.
- TPT, not sales tax: online and in-person sellers register for a TPT license; buyers see it as tax on the receipt.
- Family credits: Arizona offers dependent and family income tax credits instead of exemptions; amounts and phase-outs change.
- Standard deduction conformity: Arizona may use a lower deduction than the federal one until its tie to the federal code is updated; confirm the figure on the current-year form.
- Part-year residents: Form 140PY and Form 140NR have their own income allocation rules.
Official Arizona links
- Arizona Department of Revenue
- ADOR: free electronic filing for individuals
- ADOR: individual income tax information
- Federation of Tax Administrators: State tax agencies
Frequently asked questions
What is Arizona’s state income tax rate?
Arizona uses a flat 2.5% rate for tax year 2023 and beyond, according to the Department of Revenue. Verify the rate and your deduction on the current-year instructions.
Is there free state filing in Arizona?
ADOR lists Free File Alliance partners that are typically free for AGI of $89,000 or less, plus fillable forms to print and mail. Free in-person help is available through AARP Tax-Aide and VITA.
What is the Arizona TPT?
The Transaction Privilege Tax is Arizona’s version of a sales tax: a tax on the seller’s business activity that is typically passed on to customers.
General information only — not tax, legal or financial advice. Tax figures change every year; verify the current numbers at IRS.gov or with a qualified professional. Read the full disclaimer.