TAX & LICENSE / STATE TAX SYSTEM

Personal State Income Tax
Arizona imposes a personal income tax that uses the federal adjusted gross income as the starting point for tax computation. Since Arizona uses the federal adjusted gross income, any income that is taxable for federal purposes will also be subject to Arizona tax unless specifically excluded. Additions include interest income from non-Arizona municipal bonds. Subtractions include interest from U.S. Government obligations, social security benefits, and benefits received under the Railroad Retirement Act. For answers to questions or more information on personal income tax and other taxes in Arizona, contact:

Arizona State Tax Information
1600 West Monroe
Phoenix 602-542-1991
https://azdor.gov/

Frequently Requested Numbers
Income Tax 602-255-3381
TDD Line 602-542-4021
Refund Check 602-255-3381
Forms Mail 602-542-4260
Forms Fax 602-542-3756
Taxpayer Advocate 602-542-3887

School Tax Credit
Arizona allows a tax credit for cash contributions or fees to a public school for support of extra-curricular activities or for character education programs. Fees paid for your own child can be applied toward this credit, although you do not have to be a parent or have children in school to benefit. The credit is equal to the amount contributed with a limit of $200 for single taxpayers or heads of household and $250 for married taxpayers.

Property Tax
The assessment ratio for owner-occupied residential property is 10 percent of full cash or “market” value. Tax jurisdictions set tax rates on the basis of the total assessed valuation within their boundaries and the amount of the levy to be raised. The combined tax rate applicable to each parcel of property is the sum of the state, county, municipal, school, and special district rates. Total tax rates may vary considerably from one area to another. For more information on property taxes in Arizona, contact your county tax officials:

Coconino County Assessor
110 E. Cherry
Flagstaff 877-679-7120
www.coconino.az.gov/assessor.aspx?id=9902

Coconino County Treasurer
110 E. Cherry Avenue
Flagstaff 928-679-8188
www.coconino.az.gov/treasurer.aspx?id=548

Yavapai County Assessor
Cottonwood 928-639-8121
Prescott 928-771-3220
https://yavapaiaz.gov/

Yavapai County Treasurer
Cottonwood 928-639-8123
Prescott 928-771-3233
www.co.yavapai.az.us

Estate, Inheritance & Gift Taxes
No other state imposes a smaller net estate tax than Arizona. Arizona’s death estate taxes are credited against the federal death tax, thereby eliminating any affect to the estate. Residents pay no gift, inheritance, poll or intangible personal property tax. For more information, contact:

Estate Tax Division
1600 West Monroe
Phoenix 602-542-4643
https://azdor.gov/

Vehicle/Gasoline Taxes
Arizona imposes a motor vehicle license tax in lieu of a personal property tax on automobiles. The tax rate is $3.12 on each $100 of value for the first 12 months of the life of the vehicle ($3.22 for each succeeding 12-month period). The initial tax base is 60 percent of the manufacturer’s list price (excluding options) reduced by 16.25 percent per year. Vehicle registration and tax payments are annual with optional two-year rates. Special rates apply to alternative fuel vehicles. Arizona imposes a gasoline tax of 18 cents a gallon.

General Sales Tax
The retail sales tax in Arizona is 6.6 percent. All Arizona counties levy a tax, and each municipality levies an additional 1 to 3 percent tax on retail sales. The state of Arizona does not levy a state tax on food for home consumption or on drugs prescribed by a licensed physician or dentist. However, some cities in Arizona do levy a tax on food for home consumption.