Arizona: Who Pays? 7th Edition
Arizona
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All figures and charts show 2024 tax law in Arizona, presented at 2023 income levels. Senior taxpayers are excluded for reasons detailed in the methodology. Our analysis includes nearly all (99.9 percent) state and local tax revenue collected in Arizona. As seen in Appendix D, recent legislative changes have significantly increased the regressive tilt of Arizona’s tax system. The top 1 percent of earners received the largest tax cuts, at 2.3 percent of income, and the state moved 14 spots in the ITEP Inequality Index rankings, from 27th to 13th most regressive.
State and local tax shares of family income
| Top 20% | |||||||
| Income Group | Lowest 20% | Second 20% | Middle 20% | Fourth 20% | Next 15% | Next 4% | Top 1% |
| Income Range | Less than $22,200 | $22,200 to $42,800 | $42,800 to $70,500 | $70,500 to $129,600 | $129,600 to $254,500 | $254,500 to $596,600 | Over $596,600 |
| Average Income in Group | $12,500 | $30,500 | $54,700 | $96,800 | $165,200 | $355,200 | $1,044,500 |
| Sales & Excise Taxes | 7.7% | 7% | 6.2% | 5% | 3.9% | 2.8% | 1.7% |
| General Sales–Individuals | 4.6% | 4.7% | 4.3% | 3.5% | 2.7% | 1.8% | 0.8% |
| Other Sales & Excise–Ind | 1.7% | 0.9% | 0.6% | 0.4% | 0.3% | 0.2% | 0.1% |
| Sales & Excise–Business | 1.4% | 1.4% | 1.2% | 1.1% | 0.9% | 0.8% | 0.8% |
| Property Taxes | 3.7% | 2.3% | 2.4% | 2.4% | 2.1% | 1.7% | 1.6% |
| Home, Rent, Car–Individuals | 3.4% | 1.9% | 2.1% | 2.1% | 1.7% | 1.2% | 0.7% |
| Other Property Taxes | 0.4% | 0.4% | 0.4% | 0.3% | 0.4% | 0.5% | 0.9% |
| Income Taxes | 0.3% | 0.8% | 1.2% | 1.6% | 1.8% | 1.8% | 1.8% |
| Personal Income Taxes | 0.3% | 0.7% | 1.1% | 1.6% | 1.7% | 1.7% | 1.7% |
| Corporate Income Taxes | 0.1% | 0.1% | 0.1% | 0.1% | 0.1% | 0.1% | 0.1% |
| Other Taxes | 0.1% | 0.1% | 0.1% | 0.1% | 0.1% | 0% | 0% |
| TOTAL TAXES | 11.8% | 10.1% | 9.8% | 9.1% | 7.8% | 6.3% | 5% |
| Individual figures may not sum to totals due to rounding. | |||||||
ITEP Tax Inequality Index
ITEP’s Tax Inequality Index measures the effects of each state’s tax system on income inequality. According to this measure, Arizona has the 13th most regressive state and local tax system in the country. Income disparities are larger in Arizona after state and local taxes are collected than before. (See Appendix B for state-by-state rankings and the report methodology for additional detail.)
Tax features driving the data in Arizona
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Requires combined reporting for the corporate income tax but excludes profits booked overseas, including in tax haven countries
Refundable income tax credit to offset the impact of sales taxes
State sales tax base excludes groceries
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No property tax “circuit breaker” credit for low-income, non-senior taxpayers
Partial income tax exclusion for capital gains income
Comparatively high reliance on sales and excise taxes
Income tax deduction for state income taxes paid
Local sales tax bases include groceries
Personal income tax uses a flat rate
No Earned Income Tax Credit (EITC)
No Child Tax Credit (CTC)
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