Phoenix, AZ Taxes 2025
Complete local tax guide and OBBBA calculator
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Phoenix Tax Overview 2025
Arizona's flat 2.5% income tax combined with OBBBA provides good overall savings.
Local Income Tax
0%
City/county rate
Sales Tax
8.60%
State + local
Property Tax
0.62%
Effective rate
Median Home
$425,000
Home value
No Local Income Tax!
Phoenix does not impose a local income tax on residents, which means you only pay state income tax (if applicable) and federal taxes.
State Tax Information
Phoenix is located in Arizona (2.5% state income tax)
💼 Phoenix Local Income Tax
Phoenix does not impose a local income tax on residents. Your income tax obligations are limited to state income tax (if applicable in Arizona) and federal income tax.
This is good news for Phoenix residents, as it means one less tax to worry about compared to cities that do impose local income taxes.
Total Income Tax Burden in Phoenix
🛒 Phoenix Sales Tax 2025
The combined sales tax rate in Phoenix is 8.60%. This includes both the Arizona sales tax and any local sales taxes.
Sales tax applies to most retail purchases in Phoenix. Some items like groceries, prescription medications, and clothing may be exempt or taxed at reduced rates depending on Arizona law.
Sales Tax Breakdown
Sales Tax Examples
| Purchase Amount | Sales Tax | Total |
|---|---|---|
| $50 | $4.30 | $54.30 |
| $100 | $8.60 | $108.60 |
| $500 | $43.00 | $543.00 |
| $1,000 | $86.00 | $1,086.00 |
🏠 Phoenix Property Tax 2025
The average effective property tax rate in Phoenix is 0.62%. Based on the median home value of $425,000, the typical homeowner pays approximately $2,635 per year in property taxes.
Property taxes fund local services including schools, police, fire departments, roads, and parks. Rates vary by specific location within Phoenix based on school district and other taxing authorities.
Estimated Annual Property Tax in Phoenix
| Home Value | Annual Tax | Monthly | SALT Deductible? |
|---|---|---|---|
| $200,000 | $1,240 | $103 | ✓ Yes |
| $300,000 | $1,860 | $155 | ✓ Yes |
| $400,000 | $2,480 | $207 | ✓ Yes |
| $500,000 | $3,100 | $258 | ✓ Yes |
| $750,000 | $4,650 | $388 | ✓ Yes |
| $1,000,000 | $6,200 | $517 | ✓ Yes |
💡 SALT Tip: Under the OBBBA, you can deduct up to $40,000 in state and local taxes (SALT) on your federal return. This includes property taxes, state income taxes, and local income taxes.
💰 Phoenix Cost of Living
Housing Costs
Tax Summary
OBBBA Tax Benefits for Phoenix Residents
Tourism and hospitality workers benefit significantly from tips deduction.
The One Big Beautiful Bill Act (OBBBA), signed into law on July 4, 2025, introduced several federal tax deductions that can significantly reduce your tax burden as a Phoenix resident.
Available OBBBA Deductions:
Calculate Your Phoenix Tax Savings
Use our free OBBBA calculator to see exactly how much you could save on your 2025 federal taxes as a Phoenix resident.
Calculate My SavingsFrequently Asked Questions
What is the sales tax in Phoenix?
The combined sales tax rate in Phoenix is 8.60%. This includes both state and local sales taxes.
Does Phoenix have a local income tax?
Phoenix has a local income tax of 0%. This is in addition to any state and federal income taxes.
What is the property tax rate in Phoenix?
The average effective property tax rate in Phoenix is 0.62%. On a home worth $425,000, you'd pay approximately $2,635 per year.
How do OBBBA deductions benefit Phoenix residents?
Tourism and hospitality workers benefit significantly from tips deduction. You can use our free calculator to estimate your total savings from tips, overtime, auto loan interest, SALT, and senior bonus deductions.