Arizona Taxes

… especially real estate taxes, are lower than in most other states. There’s no “personal property” tax. The only ongoing tax for cars, boats and such are inherent in registration/licensing, if such is required for the item.

Arizona Real Property Taxes

… are based on the assessed value of the property as determined by the County Assessor. For residential property the tax formula is:

Assessed Value x 10% X District Tax Rate

The average tax rate in Maricopa County is now about $11 per $100 of value. Historically, the assessed value has been about 80% of “market” value. Thus, the average property tax per $100,000 sales price has historically been about … $100,000 x 80% x 10% x $11/100 = $880, or 0.88%

… which is fairly consistent with 1% of the sales price as the historic “rule of thumb” for near-term property taxes.

With the swings in the housing market from 2004 to present, property taxes were up and down like a yoyo relative to “market” value. As the economy has come back to normality, the historic rule of thumb seems again applicable.

Arizona Personal Property Taxes

… on cars, boats, etc, are in registration/license fees only. If there is no license then there is no personal property tax.

Annual registration costs are based on the “Assessed Value”. At purchase the rate is 2.8% of 60% of the MSRP. This declines 16.25% per year. For example, for a new car with a MSRP of $25,000, the initial registration fee would be $420 (25,000x.6x.028), declining $68.25 to $351.75 for the registration in the second year.

Arizona Personal Income Tax

… is “progressive” and based on the same “Adjusted Gross Income” as federal taxes, except for possible adjustments.

For individuals on the tax returns filed April 2018, the tax rate went from 2.59% for the first $10,000, up to $5,771 plus 4.54% for the income above $150,000. For joint returns, tax rates are same but the progression steps are double (tax less).

Arizona Sales Tax

… is 6.6% … Maricopa County adds another 0.7% … most cities tack on a bit more, plus there usually are adds for transportation system growth.

The result is a sales tax that varies between about 8.5% and 11.5%, depending on where you buy.

There is no sales tax on prescription medicines, or real estate (by a constitutional amendment in 2008). In most local communities, there is no sales tax on food. In Phoenix, this tax comes and goes.

 

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