Arizona taxes

Arizona taxes personal income at one flat rate, 2.5%, for every filer. A sole proprietor or an LLC owes Arizona no annual report and no annual fee. Corporations pay a $45 annual report fee, and C corporations pay 4.9% corporate income tax with a $50 minimum.

Personal income tax

Arizona residents file Form 140. Every dollar of taxable income is taxed at 2.5%, whatever your filing status or income. The standard deduction is the same as the federal one, and if you do not itemize you can raise it by 34% of your charitable gifts.

Arizona has no personal exemption. Dependents get a credit against the tax instead: $100 for each dependent under 17 and $25 for each one 17 or older. Arizona does not tax Social Security.

Return

Form 140

Rate

2.5% on all taxable income

Standard deduction

$15,750 single or married filing separately, $31,500 married filing jointly, $23,625 head of household

Charitable gifts, if you do not itemize

Add 34% of them to the standard deduction

Dependent credit

$100 under 17, $25 age 17 and over

Dependent credit phase-out

Cut by 5% for each $1,000 of federal income over $200,000 ($400,000 married filing jointly), and gone more than $19,000 over

Not taxed

Social Security

Government pensions

Up to $2,500 per person of a United States, Arizona or Arizona local government pension is not taxed

Sole proprietor

A sole proprietor owes Arizona nothing at the business level. Arizona charges no annual report or entity fee, and your profit is taxed on your own Form 140 at 2.5%.

If you sell taxable goods or services you may still need to register for transaction privilege tax, which is Arizona's sales tax. This page does not cover it.

Single-member LLC

Arizona requires annual reports from corporations only, so an LLC files no annual report and pays no annual fee to stay in good standing. The LLC's profit is taxed on your own Form 140.

From 2025, the Corporation Commission asks an LLC that has filed nothing for two years to confirm online that it still exists. It costs nothing, but an LLC that ignores it gets flagged. Transaction privilege tax, Arizona's sales tax, may still apply if you sell taxable goods or services.

Partnership

An Arizona partnership files Arizona Form 165, the partnership income tax return. The profit passes through to the partners, who report it on their own returns.

A registered limited liability partnership also files an annual report with the Secretary of State, between January 1 and April 30 each year. The fee is not confirmed here. If the report is not filed, the Secretary of State can revoke the partnership's LLP status. An LLC taxed as a partnership, or an ordinary limited partnership, files no annual report.

S corporation

An Arizona S corporation files Arizona Form 120S. The profit passes through to the shareholders, who report it on their own returns.

Every corporation files an annual report with the Corporation Commission and pays $45, whatever it earned. It is due each year in the anniversary month of incorporation, on a date the Commission assigns. Filing late costs 20% of the fees due for each month it is late. An LLC that elected S corporation treatment does not file this report.

The $50 minimum corporate income tax reaches an S corporation only in a year it has income taxed at the corporate level, such as built-in gains or excess net passive income. In that year it pays the larger of $50 and 4.9% of that income.

C corporation

A C corporation files Arizona Form 120, or the short Form 120A, by the 15th day of the 4th month after the year end. It pays 4.9% of its Arizona taxable income, and never less than $50, so a corporation that lost money still pays $50.

It also pays the $45 annual report fee to the Corporation Commission, a different agency, on top of the income tax. A corporation selling into other states can choose Arizona's standard formula or a sales-only formula to work out its Arizona share of profit.

Return

Arizona Form 120 or Form 120A, due the 15th day of the 4th month after the year end

Corporate income tax

4.9% of Arizona taxable income, minimum $50

Multi-state profit

Standard formula or sales-only formula, by election

Annual report fee

$45 a year, to the Corporation Commission

Estimate your state tax

Pick your business type and enter this year's numbers to see the state business tax Arizona charges. It assumes all your sales are in Arizona.

An estimate for planning, not tax advice.

Sources

• Arizona Form 140 Resident Personal Income Tax Booklet, 2025
• azcc.gov Business Services FAQs (LLC vs corporation annual report requirement)
• azcc.gov news, 30 May 2025: LLC Attestation of Existence policy
• azcc.gov Corporations Division Schedule of Fees, A.R.S. Title 10 (annual report: for-profit corporation $45)
• azcc.gov Corporations Division Schedule of Fees, A.R.S. Title 29 (LLC schedule: no annual report line exists)
• azleg.gov A.R.S. 10-1622 (annual report; anniversary month; 20% per month penalty)
• azleg.gov A.R.S. 29-1103 (LLP annual report; 1 January to 30 April; revocation)
• azdor.gov Arizona Form 120 Instructions, tax year 2025 (line 16: $50 minimum tax)
• azdor.gov Arizona Form 120S Instructions, tax year 2025 (line 12: corporate-level income only)
• azdor.gov Arizona Form 165 Instructions, tax year 2025
• azdor.gov Arizona Form 120 Instructions, tax year 2025
• azdor.gov Corporate Income Tax Highlights

Last reviewed August 2026.