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Arizona's focus on business is simple: keep regulation light and taxes low. Arizona’s corporate and individual income tax rates are among the lowest in the nation, making the state welcoming to both business and people.
ARIZONA: COMPETITIVE TAX STRUCTURE
Low Income
Flat Tax
Lowest Individual Income Flat Tax
At 2.5%, Arizona offers the lowest flat-tax in the nation. Of the 12 states with flat income taxes, none have rates lower than 3% except for Arizona.
Low Corporate
Income Tax
Seventh Lowest Corporate Income Tax
At 4.9%, Arizona’s corporate income tax rate is among the lowest in the nation on a 100% sales factor apportionment formula.
Reduced Capital Gains
Reduced Capital Gains Tax
Arizona offers a reduced long-term capital gains tax that decreases taxes on assets acquired after 2011 up to 25%.
Reduced Property Tax
Reduced Property Assessment Ratio
In 2022, legislation reduced the Class 1 property assessment ratio to 15% by 2027, continuing a 10-year trend of reducing property taxes and resulting in a 25% decrease in Class 1 property taxes since 2012.
Reduced Depreciation
Personal Property Tax Reduction
Arizona has nearly eliminated personal property tax by reducing the taxable value of most personal property to 2.5% of purchase cost, resulting in an effective tax rate below 0.02%.
Zone Tax
Benefits
Foreign Trade Zones
Arizona businesses in federally approved zones or sub-zones can access a reduced property tax assessment ratio of 5%, significantly lowering real and personal property taxes by nearly 70%.
2.5%
Flat Income Tax
Lowest flat-tax in the U.S.
4.9%
Corporate Income Tax
Among the Lowest in the U.S.
NO
Franchise Tax, Business Inventory Tax, Estate Tax, Worldwide Unitary Tax, Gross Receipts Tax