What taxes will I pay as an Arizona resident — income, sales and property?

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Three taxes matter: a flat state income tax of 2.5 percent on top of federal income tax; a sales tax (Arizona calls it transaction privilege tax) of about 8 to 9 percent in the Phoenix area once city and county rates are added; and a property tax that for most homes works out to well under one percent of market value a year, billed in two halves. Arizona taxes individual income at a single flat rate of 2.5 percent, among the lowest in the states that have an income tax, and it does not tax inheritances or estates. Residents file a state return alongside the federal one; people who arrive part-way through the year file as part-year residents for that first year. Federal income tax, Social Security and Medicare are the larger deductions on a payslip. What looks like sales tax is formally the transaction privilege tax, levied on the seller and passed on to you. The state rate is 5.6 percent and counties and cities add their own, so the total you pay at a Phoenix-area register is roughly 8 to 9 percent depending on the city; groceries are largely untaxed at the state level, though some cities tax them. Property tax is assessed by the county and billed by the county treasurer in two instalments, due in autumn and spring. For an owner-occupied home in Maricopa County the effective rate is typically a fraction of one percent of market value, with the exact amount depending on the taxing districts the parcel sits in; you can look up any address and see its current bill before you buy.

What taxes will I pay as an Arizona resident — income, sales and property?

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