Arizona collects income taxes from its residents in five brackets, and in 2006 lowered its tax brackets across the board. The lowest rate is 2.59 percent; the top rate is 4.54 percent. More on Arizona taxes can be found in the tabbed pages below.

Income Sales Property Estate Other

Personal income tax   Arizona collects income taxes from its residents at the following rates. For single and married filing separately taxpayers: -- 2.59 percent on the first $10,000 of taxable income -- 2.88 percent on taxable income between $10,001 and $25,000 -- 3.36 percent on taxable income between $25,001 and $50,000 -- 4.24 percent on taxable income between $50,001 and $150,000 -- 4.54 percent on all taxable income more than $150,000. For married persons filing joint returns and heads of households, the rates remain the same but the income brackets are doubled.   Arizona income tax forms are due April 15, or the next business day if that date falls on a weekend or holiday.   Arizona law requires a taxpayer to add certain items to Arizona gross income. One of the items a person must add is interest income from non-Arizona municipal bonds.   Arizona has no special treatment for capital gains. Capital gains included in your federal adjusted gross income are included in your Arizona gross income and are taxed at your regular tax rate. Sales tax   Arizona Transaction Privilege Tax (sales) and Use Tax rates generally are 5.6 percent. The state of Arizona does not levy a state tax on food for home consumption or on drugs prescribed by a licensed physician or dentist. However, some cities in Arizona do levy a tax on food for home consumption.   All 15 Arizona counties levy a tax.   Incorporated municipalities also levy transaction privilege taxes, which, with the exception of their hotel/motel tax, are generally in the range of 1 percent to 4.25 percent. An interactive Web page allows you to find the current combined state transaction privilege tax rate and your county's excise tax rate. Personal and real property taxes   Tax jurisdictions set tax rates on the basis of the total assessed valuation within their boundaries and the amount of the levy to be raised. Total tax rates may vary considerably from one area to another.   Owner-occupied residential properties are valued by local assessors using one of two methods: replacement cost new less depreciation or sales analysis. Each assessor selects which method to use based upon technical considerations such as the accuracy of each method for that area and the number of sales available for analysis. A brochure provides more details on the process. Arizona also taxes personal property, which is defined as all types of property except real estate. Taxable personal property includes property used for commercial, industrial and agricultural purposes. Personal property is considered to be movable and not permanently attached to real estate.   Personal property taxes are due Oct. 1. If the tax amount is over $100, one-half is due Oct. 1 and the remainder is due the following March 1. One-half of the amount of the taxes that are unpaid is delinquent after Nov. 1 and the remaining half that is unpaid is delinquent after May 1. Read more about personal property taxes in a brochure from the Arizona Department of Revenue.   In lieu of a personal property tax on automobiles, the state imposes an annual vehicle license tax, or VLT, which is based on an assessed value of 60 percent of the manufacturer's base retail price reduced by 16.25 percent for each year since the vehicle was first registered in Arizona. For additional information on this tax, please call the Arizona Department of Transportation, Vehicle License Division: (602) 255-0072 in the Phoenix area, (520) 629-9808 in the Tucson area and (800) 251-5866 elsewhere in Arizona. Inheritance and estate taxes   For estates of indiviudals who died after 2004, Arizona no longer imposes an estate tax.   Neither does the state impose an inheritance or gift tax. Other Arizona tax facts   Arizona taxpayers may pay their income taxes by e-check or credit card. This option is available to electronic and paper filers. Arizona taxpayers who install a solar energy device in their homes may claim a solar energy credit. Arizona taxes retirement income from other states. An individual may obtain an automatic six-month extension of time to file an Arizona state return by filing Form 402.

For more information, go to the Arizona Department of Revenue's Web site. A special Web page answers questions for people moving in from out of state. To download tax forms on this site, you will need to install a free copy of Adobe Acrobat Reader. Click here for instructions.