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Arizona has a 4.90 percent corporate income tax rate, a 5.60 percent state sales tax rate, a max local sales tax rate of 5.30 percent, and a 8.37 percent combined state and local sales tax rate. Arizonas tax system ranks 19th overall on our 2024 State Business Tax Climate Index.
Arizona does not tax your Social Security benefits (unlike these 11 states that tax Social Security benefits). And on most other income that is taxed, rates are relatively low Arizona has a flat individual income tax rate of 2.5% that took effect in 2023.
January 2023 Ordinance No. 2022-1801 decreases the rate of taxation from two and three quarters percent (2.75%) to a rate of two percent (2.00%). This rate change has an effective date of January 1, 2023.
Arizonas property taxes are relatively low, but sales taxes are fairly high. If you want to optimize your retirement plan, SmartAssets free online matching tool can help you connect with a financial advisor who serves your area. Arizona is moderately tax-friendly toward retirees. Social Security income is not taxed.
The state most recently had a two-rate individual income tax system with rates of 2.55% and 2.98%, and a plan to phase-in a new flat tax over three years, beginning in 2024. But due to strong economic growth and a budget surplus, the Arizona Department of Revenue was instructed to fully implement the flat tax in 2023.

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Please note: An Arizona full-year resident is subject to tax on all income, including earnings from another state. Arizona will also tax retirement from another state.
2023 Arizona Standard Deduction Amounts Adjusted The 2023 Arizona standard deduction amounts are: $ 13,850 for a single taxpayer or a married taxpayer filing a separate return; $ 27,700 for a married couple filing a joint return; and.
For 2023, the standard deduction increased to $27,700 for married couples filing jointly, up from $25,900 in 2022. Single filers may claim $13,850 for 2023, an increase from $12,950. Enacted via the Tax Cuts and Jobs Act of 2017, the higher standard deduction is slated to sunset in 2026, along with lower tax rates.

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