Arizona Tax Policy & Rates 2026
Income tax, sales tax, property tax, and overall tax burden for Arizona in 2026, with political context.
No
No Income Tax
2.5% (flat)
Income Tax Rate
#33
Tax Burden Rank (1=highest)
#30
Property Tax Rank (1=highest)
Tax Policy Overview
Arizona passed a flat 2.5% income tax rate in 2022, one of the most significant tax cuts in state history. The flat tax replaced a progressive system with rates up to 4.5%. Arizona has a below-average overall tax burden and is a relatively low-tax state.
Key Tax Rates
| Tax Type | Rate / Status |
|---|---|
| Income Tax | 2.5% (flat) |
| No Income Tax | No |
| Sales Tax | 5.6% (+local) |
| No Sales Tax | No |
| Corporate Tax | 4.9% |
| Property Tax Rank | #30 nationally (1=highest) |
| Overall Tax Burden Rank | #33 nationally (1=highest) |
Political Context
Arizona Republicans passed the flat income tax as a major policy win. Democrats argued it disproportionately benefited the wealthy. The voter-enacted Prop 208 (taxing high earners for education) was struck down by the legislature and courts, creating a political battle over whether voters can raise taxes on the wealthy.