Income Taxes in Arizona
Arizona's individual income tax is genuinely simple and genuinely low: a single flat 2.5% rate on all taxable income regardless of filing status, in effect since tax year 2023 and continuing through 2026 -- the lowest flat rate of any state that taxes income at all.
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Learn moreA single flat rate, confirmed current and stable
Arizona has taxed individual income at a flat 2.5% rate since tax year 2023, replacing its former graduated bracket system. This rate is confirmed as continuing for tax year 2026 across every 2026 source reviewed for this dataset, with no scheduled further change found -- a genuinely simple, single-number tax calculation unlike states with graduated brackets or (elsewhere in this dataset) a separate municipal income-tax layer.
How Arizona's 2.5% compares nationally
Arizona's 2.5% flat rate is the lowest of any state that levies an individual income tax at all -- lower than every other flat-tax state in this dataset. This is a genuine, structural advantage for movers relocating from a graduated-bracket or higher-flat-rate state, though it should be weighed against Arizona's comparatively higher combined sales tax rather than treated as proof of an overall low-tax state (see the sales-tax topic).
No separate city or county income tax layer
Unlike some states in this dataset with a genuinely complex municipal income-tax layer on top of the state rate, Arizona does not levy a separate city or county individual income tax -- the flat 2.5% state rate is the complete individual income-tax picture, a real simplicity advantage for household budgeting.
Key takeaways
- Arizona's individual income tax is a real, current flat 2.5% on all taxable income, in effect since tax year 2023 and continuing through 2026 -- the lowest flat rate of any income-tax state.
- There is no separate city or county income tax layer in Arizona -- the flat 2.5% state rate is the complete picture, a genuine simplicity advantage over states with a municipal income-tax layer.
- Arizona's low income tax should be weighed alongside its comparatively higher combined sales tax rather than treated as proof of a uniformly low-tax state.
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