State guide · AZ
Arizona sales tax and property tax
Arizona never adopted a sales tax in the textbook sense: the seller owes a tax for the privilege of doing business, and the buyer usually sees it passed through on the receipt.
Facts read on official Arizona pages on · Checked by Radif Partners · How we calculate
- State sales tax
- 5.6%
- Local sales taxes
- Yes, by address
- Groceries
- Exempt from the state rate
- Clothing
- Taxed like other goods
- Median property tax
- $1,828
- Effective property rate
- 0.43% · #48 of 51
Arizona's 5.6% state rate belongs to a transaction privilege tax, or TPT, which the law places on the vendor rather than the customer; most sellers pass it on, so in practice it looks like a sales tax. The 5.6% is a 5% base rate plus a 0.6000% education increment approved by voters, and counties and cities add their own TPT, all collected by the Department of Revenue (ADOR). Groceries are exempt from the state TPT but cities and towns may still tax them; prescription drugs are exempt from state and city tax alike; clothing is taxed, and there is no holiday. Property tax is light: the median owner paid $1,828 in 2024 on a $426,000 home (Census ACS), an effective rate of 0.43%, ranked 48 of 51. Homes are taxed on a limited property value that may grow 5% a year at most, and owner-occupants get a state rebate of up to $600.
Total to pay
$105.60
Sales tax $5.60 · 5.6% of the price
| Price before tax | $100.00 |
| State tax · 5.6% | $5.60 |
| Local tax · 0% | $0.00 |
| Total | $105.60 |
Rule applied: general state rate. Exact local rate for an address: Arizona rate lookup. How this is calculated.
Sales tax in Arizona
Because TPT is a tax on the business, the classification of the business matters more than the item. Retail sales pay the 5.6% rate; hotels and short-term lodging start from a state base of 5.5% before the education increment and local add-ons; commercial leases owe no state TPT at all, though cities may tax them. A $1,200 refrigerator carries $67.20 of state TPT, and the county and city portions come on top. ADOR collects every layer, so one return covers the state, the county and the city, and its address tool returns the combined rate to type into the calculator above.
City TPT has its own habits. Cities must follow the state's retail rules, yet they keep the right to tax food for home consumption, which is why a grocery bill in one town shows tax and in the next one does not. Some cities apply tiered rates to single items priced above a threshold, taxing either the whole item or only the part above it at the special rate, which matters for furniture, appliances and other big tickets. A city that changes its rate must wait out a 60-day notice period agreed with ADOR. Since January 1, 2025, no city or town may tax residential rent.
Two rules concern buyers who cross state lines. Goods bought from out-of-state retailers without Arizona tax owe use tax at 5.6%, the same rate as retail TPT, increment included. And a nonresident buying a car in Arizona pays a reduced state rate when the vehicle tax of their home state is lower than Arizona's.
What the state charges, item by item
| Item | State rate | Local tax | Rule |
|---|---|---|---|
| Most goods | 5.6% | yes | Arizona levies a transaction privilege tax (TPT), a tax on the vendor for the privilege of doing business, usually passed on to buyers. The 5.6% state retail rate is the 5% base rate (A.R.S. 42-5010) plus a voter-approved 0.6% education increment. Counties and cities add their own TPT. |
| Groceries (food for home) | 0% | yes | Food for home consumption sold by grocery-type retailers is exempt from state TPT (A.R.S. 42-5102); food consumed on the premises is taxable. Cities and towns may still levy their TPT on food sales. |
| Clothing | 5.6% | yes | Clothing is taxable under the retail classification; Arizona has no clothing exemption. |
| Prescription drugs | 0% | no | |
| Transient lodging | 5.5% | State base rate for hotels and short-term lodging (A.R.S. 42-5010(A)(2)), before the education increment and local taxes. | |
| Mining | 3.125% | State base rate for the mining classification. | |
| Commercial lease (state) | 0% | No state TPT on commercial leases; cities may tax them. |
Local sales taxes
Levied by county excise taxes and city/town transaction privilege taxes, all collected by ADOR; some cities apply tiered rates on single items above a set price. Cities must follow the state retail rules (A.R.S. 42-6017) but may still tax food for home consumption. Find the exact combined rate for an address with the official Arizona lookup, then type the local part into the calculator above.
Sales tax holidays in 2026
Arizona has no sales tax holiday.
Worth knowing about Arizona sales tax
- Arizona's 'sales tax' is legally a transaction privilege tax on the seller, not on the buyer, though sellers may pass it on. source
- Prescription drugs are exempt from both state and city TPT. source
- Groceries are exempt from state TPT, but cities and towns may tax food sold for home consumption. source
- Since January 1, 2025, no city or town may tax residential rents (A.R.S. 42-6004(H)). source
- Some cities use tiered rates: a different rate on single items priced above a threshold, either on the whole item or on the portion over it. source
- City rate changes take effect only after a 60-day notice period agreed between ADOR and the municipalities. source
- Nonresidents buying a car in Arizona pay a reduced state rate if their home state's vehicle tax is lower than Arizona's 5.6%. source
Property tax in Arizona
Arizona taxes homes on a figure that is not their market price. The county assessor sets a full cash value and a limited property value (LPV), which can rise by no more than 5% a year and never above full cash value. Primary taxes are computed on the LPV. Owner-occupied homes, class three, are assessed at 10% of it; residential rentals, class four, use the same ratio but lose the homeowner rebate; commercial property was assessed at 25% in 2005 and is down to 15.5% in 2026, then 15% from 2027.
A home with an LPV of $320,000 has an assessed value of $32,000, and next year its LPV can reach at most $336,000 whatever the market does. Two protections then apply to the bill. The Arizona Constitution limits primary taxes on a home to 1% of its LPV, $3,200 in this example, with bonds and voter-approved overrides outside the limit. The state also pays part of each owner-occupied home's school district primary tax, which cuts the bill by up to $600; the county applies it from the primary residence classification, with no separate form.
At the Census ratio of 0.43%, a $450,000 home pays about $1,931 a year. County treasurers send one bill for the county, cities, school districts, community colleges and special districts. The first half is due October 1 and becomes delinquent after November 1 at 5 p.m.; the second half is due March 1 and becomes delinquent after May 1. Paying the whole year by December 31 avoids interest, and late taxes otherwise bear 16% a year. Widows, widowers and totally disabled residents within income limits have a separate exemption, and a veteran rated 100% service-connected disabled pays nothing on the primary residence.
Property tax on a home in Arizona
Typical bill per year
$1,828
| Per month | $152 |
| Median effective rate in Arizona | 0.43% |
| Median bill paid | $1,828 |
Census median ratio; your county, city and school district set the real levy.
| Census figure | Arizona |
|---|---|
| Median home value (owner-occupied) | $426,000 |
| Median real estate taxes paid | $1,828 |
| with a mortgage | $1,918 |
| without a mortgage | $1,654 |
| Effective rate (tax ÷ value) | 0.43% |
| Rank by effective rate (1 = highest) | 48 of 51 |
| Rank by median bill | 39 of 51 |
How the taxable value is set
Owner-occupied homes (class three) are assessed at 10% of limited property value. The LPV may rise by at most 5% a year and never above full cash value. Commercial property (class one) is assessed at 15.5% in 2026, falling to 15% from 2027. Who levies the tax: County, city, school district, community college and special district levies, billed and collected by the county treasurer; primary taxes on the limited property value (LPV).
Payment calendar: First half due October 1, delinquent after November 1 at 5 p.m.; second half due March 1, delinquent after May 1 at 5 p.m. Bills of $100 or less are due in full October 1. No interest is charged if the full year is paid by December 31.
Other property tax relief
- Widow/widower and disability exemption. $4,188 of assessed value (statutory base, indexed each year) for eligible widows, widowers and totally disabled residents within income and assessment limits. source
- 100% disabled veteran exemption. The primary residence of a veteran rated 100% service-connected disabled (or unemployable) is fully exempt, as is that of the surviving spouse. source
- 1% residential cap. Primary taxes on residential property may not exceed 1% of its limited value (bonds and voter overrides excluded). source
Worth knowing about Arizona property tax
- Limited property value rises at most 5% a year (A.R.S. 42-13301), whatever the market does. source
- The Arizona Constitution caps primary taxes on a home at 1% of its limited value. source
- The commercial assessment ratio has been cut step by step from 25% in 2005 to 15.5% in 2026 and 15% from 2027. source
- Residential rentals (class four) are assessed at the same 10% ratio as owner-occupied homes but do not get the homeowner rebate. source
- Late property taxes bear 16% simple interest a year. source