*Sales Tax Comments: Several cities levy a sales tax on unprepared foods.
- Statewide: 5.6%
- Counties can levy sales tax of no more than 5.5%.
- Current average sales tax (with local taxes included): 8.00%
- Common Exceptions at State Level:
- Prescription Medicine: Exempt
- Unprepared Foods: Exempt*
- Gasoline Tax: 37.40 cents/gallon (Includes all state, local, and federal taxes)
- Diesel Fuel Tax: 51.40 cents/gallon (Includes all state, local, and federal taxes)
Personal Income Tax
* Income tax comments: Retirement income from public pension of up to $2,500 is tax-exempt. Standard deductions can be increased by 27% of the charitable donations if not itemizing.
- Personal Income Tax Rate: 2.5%
- Standard deduction-single filing status: $13,850. A larger deduction may be available if filer made charitable contributions.
- Personal Exemption Allowance: Over 65: $2,300/$100 credit for each dependent under 17; $25 if over 17. Phases out as income increases.
- Itemized Deductions Allowed? Yes. Subject to limitations.
- Retirement Income
- Social Security: Exempt
- IRAs: Taxable at ordinary income tax rates*.
- 401Ks/Defined contribution employer retirement plans: Taxable at ordinary income tax rates.*
- Private pensions: Taxable at ordinary income tax rates.*
- Public Pensions: Taxable at ordinary income tax rates.*
- Military Pay
- Active Duty Pay: Exempt
- Military Retirement Pay: Exempt.
- Military Disability Pay: Exempt
- VA Disability Dependency & Indemnity Compensation Benefits: Exempt
- SBP/SSBP/RCSBP/RSFPP: Exempt.
- Local municipalities average .62% of the property's assessed value.
- Calculation of assessed value: 10% of limited property value, which limits increases in value to 5% per year or less.
- Relief programs for:
- Disabled/Surviving Spouses: Eligible for up to $4,188 or more exemption if meet assessed value and income requirements.
- 65 and over/Renters or Single Homeowners: Eligible for tax credit of up to $502 based on income. 65 and over can freeze valuation for three years if meet certain requirements.
- Over 70: Can defer taxes if meet certain requirements.
- Personal Property Tax: Yes. Rates and exemptions vary.
Inheritance & Estate Taxes: None
Department of Revenue website: www.azdor.gov