A recent State-by-State Guide to Taxes released by Kiplinger listed Arizona on the top 10 list of tax-friendly states. The ranking, which placed Arizona ninth in the nation for tax friendliness for individuals and businesses, is determined by a state’s tax burden as it relates to areas including income tax, property tax, sales tax and more. The ranking follows reports showing Arizona recorded record revenue during the most recent fiscal year.
“In Arizona, we believe in keeping taxes simple and fair — while allowing hardworking taxpayers to keep more of the dollars they earn,” said Governor Ducey. “Since 2015, we’ve reduced and simplified taxes every year, while balancing Arizona’s budget, bringing our Rainy Day Fund to a record $1 billion and growing our surplus to $1 billion. With a booming economy and hundreds of new residents every day, we’ve also been able to invest significantly in the things that matter — like K-12 public education, public safety and infrastructure. This is a winning game plan, and we will continue to keep our state attractive for residents and businesses alike.”
With a growing economy and hundreds of new residents every day, in Fiscal Year 2019, State General Fund revenue collections totaled $11.23 billion, the highest level ever recorded. Following a $542 million investment in this year’s budget, Arizona’s Rainy Day Fund is also at record levels. The fund now sits at $1.014 billion, as confirmed by the Arizona Treasurer’s Office, or 9.1 percent of budgeted ongoing General Fund revenues.
Arizona’s Tax Reform Plan
Arizona’s Fiscal Year 2020 budget also built on the tax relief passed as part of President Trump’s Tax Cuts and Jobs Act to make Arizona’s code simpler, flatter and more fair. The revenue neutral tax reforms—the most significant of the past 30 years—increase Arizona’s standard deductions to match the federal standard deduction of $12,000 for individual filers and $24,000 for married filers, a first for Arizona.
Families also will benefit from a new $100 child tax credit, as will nonprofits and charities thanks to a new charitable tax deduction that encourages donations to organizations that help those most in need.
For the median income tax filer, this tax reform will mean annual relief of roughly $135 after conformity.
Since 2015, the average Arizona taxpayer has paid approximately $1,800 less in combined state and federal taxes. To learn more about the way Arizona has simplified and reduced taxes, click HERE.