Arizona's Tax Burden: The Top 1% Pay 18% of Net Liability

New data breaks down who shoulders the state's $29 billion in tax revenue

Apr. 14, 2026 at 12:51am

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A minimalist, abstract illustration using bold geometric shapes and primary colors to represent the distribution of Arizona's tax revenue, with a large red triangle symbolizing the outsized contribution of the state's top 1% of earners.Arizona's tax system relies heavily on the top 1% of high-income earners, who contribute a disproportionate 18% of the state's total revenue.Scottsdale Today

In Arizona, the state collects $29 billion in revenue, with the majority coming from $20 billion in sales taxes and $9 billion in income taxes. While three out of four Arizona filers make under $100,000 a year, the top 1% of earners over $1 million account for 18% of the state's net tax liability, offsetting refunds paid out elsewhere in the system.

Why it matters

Understanding the distribution of the tax burden in Arizona provides insight into the state's economic landscape and the disproportionate impact high-income earners have on funding public services and infrastructure. This data can inform policy debates around taxation, wealth inequality, and the fairness of the state's fiscal system.

The details

Arizona's tax revenue is primarily generated through sales taxes ($20 billion) and income taxes ($9 billion). Despite the majority of filers making under $100,000 per year, the top 1% of earners over $1 million account for 18% of the state's net tax liability. This means their tax payments help offset refunds and credits paid out to lower-income individuals and families elsewhere in the system.

  • Arizona collects $29 billion in total state revenue annually.

The players

Arizona

The state of Arizona, which collects $29 billion in total revenue annually, with the majority coming from sales and income taxes.

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The takeaway

This data highlights the outsized impact high-income earners have on funding Arizona's public services and infrastructure, raising questions about the fairness and progressivity of the state's tax system. Policymakers may use this information to evaluate potential reforms to ensure a more equitable distribution of the tax burden.