Arizona Tax

Are you considering a move to Arizona? If the answer is yes, you might want to do some research about Arizona taxes. My guess is that some Arizona taxes will be lower than wherever you are moving from, and some taxes will be higher. For instance, many people are unpleasantly surprised by the personal property tax levied against automobiles in Arizona. It is paid along with your vehicle registration. Others are very pleasantly surprised that their real estate taxes might be lower in Arizona. It all depends on your personal situation. Whether the level of taxation in Arizona is a factor in your move or not, it is best to be aware so there are no tax surprises later!

Arizona Taxes

Personal Income Tax
Residents and nonresidents that earn income in Arizona will pay state income tax. To compute your Arizona income tax, you will start with your federal adjusted gross income. Then you will be able to make certain additions and subtractions to arrive at Arizona taxable income. For instance, you will have an addition to income if you have interest income from non-Arizona municipal bonds. You will have a deduction from income for state tax purposes for social security benefits you receive, and a portion of your income from a U.S. Government and Arizona state or local pension. Arizona taxpayers may take a standard deduction, or itemize. There is one personal exemption allowed per taxpayer, and some may be able to take additional exemptions if there are qualifying dependents. Vehicle Tax
The fee to obtain a driver license is between $10 and $25. You can determine how much it will cost you at the Motor Vehicle Department web site. The fee to register your vehicle is generally less than $10, but there is an additional vehicle license tax (VLT) assessed at the time of registration. This is the equivalent of the personal property tax charged by other states. The more valuable your vehicle, the higher the VLT will be. You can see the formula for the computation here.
You can expect a newer model high end vehicle to have an annual fee of several hundred dollars. Each year that you own the vehicle, the value, of course, will decline, as will the amount of the vehicle license tax you will have to pay.
Gas Tax
in addition to the tax imposed by the federal government, Arizona adds a tax on gasoline that is 18 cents per gallon (2011) for most non-commercial, non-diesel vehicles.
Estate Tax
Since 2005 Arizona has not imposed an estate tax or a gift tax (2011).