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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 federal government obligations, social security benefits, and those benefits that were received under the Railroad Retirement Act.

Deductions and Exemptions
Taxpayers may take a standard deduction or itemize their deductions. The standard deduction and personal exemptions for a single person or a married person who files a separate return is $4,373. The deduction and personal exemption for head of household or a married couple who file a joint return is $8,745. Taxpayers may itemize deductions on their Arizona state return even if they filed a standard deduction on the federal tax return. State income tax is calculated on a variable scale based on income level, with the lowest rate being 2.87 percent of taxable income and a maximum of 5.04 percent minus $2,276 for the excess over $300,000 for joint filers. For information on income tax or answers to your questions, contact:

School Tax Credit
Arizona offers a way to support your local schools and receive a tax credit at the same time. Although this credit applies to fees or cash contributions paid to a public school for the support of extracurricular activities, 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 and $300 for taxpayers who are filing jointly (from 2006 forward, the credit for joint filers will be $400).

Property Tax
The assessment ratio for owner-occupied residential property is 10 percent of full cash (market) value. Tax jurisdictions set tax rates on the basis of the total assessed valuation within their boundaries and the amount of the required levy. This combined rate is the sum of state, county, municipal, school, and special district rates. For more information, contact the county assessor or visit one of the branch locations:

Estate, Inheritance & Gift Taxes
Effective January 1, 2005, federal law eliminated the state death tax credit; therefore, Arizona no longer imposes an estate tax. Residents pay no gift, inheritance, poll, or intangible personal property tax.

Vehicle License Tax
Arizona imposes an annual motor vehicle license tax or VLT in lieu of the personal property tax that many other states impose on automobiles. The VLT is based on an assessed value of 60 percent of the base retail price set by the manufacturer, which is reduced by 16.25 percent for each year the vehicle has been registered in Arizona. For each $100 of assessed value, the current tax rate is $2.80 for new vehicles and $2.89 for used vehicles. Vehicle registration and tax payments are annual but two-year rates are optional. Special rates apply to alternative fuel vehicles. For information, contact:

General Sales/Use Tax
Retail sales tax in Arizona is 7.3 percent. Counties and municipalities add to this base state sales tax rate. Arizona does not levy a state tax on food for consumption at home or on drugs prescribed by a licensed physician or dentist, but some cities do levy a tax on food for home consumption. Use taxes of 5.6 percent apply to merchandise purchased outside of Arizona such as catalog or Internet orders where no tax was paid but the goods are “used” in Arizona. For more information, contact:

HUNTING & FISHING LICENSE

Licenses are required for fishing, hunting, and boating in Arizona. Anglers delight in the wide variety of desert and mountain lakes throughout the state. Hunting in Arizona includes small and large game from antelope and deer to crane. In spite of its reputation for an arid environment, Arizona is home to spectacular lakes and claims one of the nation’s highest number of boaters per capita. For more information on resident and non-resident license fees, watercraft licensing, and boating regulations, contact:

PET LICENSING

Arizona requires annual licensing of all dogs at least four months of age. Those who are new to the state have 30 days to comply with rabies vaccination and registration. Rabies vaccinations are recommended for cats as well. The Arizona Humane Society provides low-cost spay and neuter clinics. For further details, contact:

VOTER RESOURCES

Voter Registration
Arizona offers voter registration in a wide variety of convenient locations; those who are registered can also vote early in person or complete an early ballot by mail. Contact your local jurisdiction or county recorder for early voting ballot request information. To register, you must be a U.S. citizen who will be 18 years of age or older prior to the general election following registration and an Arizona resident for 29 days preceding the election. You must also provide the election officer at the polls with your Arizona driver license or other acceptable forms of identification. Arizona is an “open” primary state, so voters registered with a recognized political party may vote in the primary election in even years. To request absentee or mail-in ballets or for answers to specific questions, contact:

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