Arizona and Nevada are both low-tax Southwest destinations popular with California refugees. Nevada has 0% income tax—hard to beat. Arizona charges 2.5% flat (reduced from 2.59% in 2023)—among the lowest rates nationally. At $100,000: Arizona charges $2,500, Nevada charges $0. Nevada saves $2,500/year. But the full picture includes: Nevada has higher sales tax (6.85-8.375% vs Arizona's 5.6-10.7%), higher gaming-adjacent costs, and Las Vegas-specific lifestyle. Phoenix is larger, more diverse, and has growing tech/healthcare sectors. Choose Nevada if: you want zero income tax, prefer Las Vegas lifestyle, or work in gaming/hospitality. Choose Arizona if: you prefer Phoenix/Scottsdale lifestyle, want lower overall costs, work in tech/healthcare, or accept 2.5% as acceptable for better city options.

By CountryTaxCalc Research Team

Last Updated: April 2026

The Big Picture

🌵 Arizona

2.5%

Flat Rate

2.5% flat rate (reduced from 2.59% in 2023)

🎰 Nevada

0%

No Income Tax

0% income tax, funded by gaming/sales taxes

Typical Annual Savings

At $100,000 income:

$2,500

That is $208/month back in your pocket!

Tax Savings by Income Level

IncomeAZ TaxNV TaxSavings10-Year
$50,000 $1,250 (2.5%)$0 (0%)Nevada saves $1,250$12,500
$100,000 $2,500 (2.5%)$0 (0%)Nevada saves $2,500$25,000
$200,000 $5,000 (2.5%)$0 (0%)Nevada saves $5,000$50,000
$500,000 $12,500 (2.5%)$0 (0%)Nevada saves $12,500$125,000

Arizona Pros and Cons

✅ Pros

  • Only 2.5% flat tax: Among lowest income tax states that do tax income
  • Phoenix metro: 5th largest US city, diverse economy, major airport hub
  • Growing tech scene: Phoenix/Scottsdale attracting tech companies from CA
  • Lower property taxes: 0.62% average vs Nevada's 0.55% (similar)
  • More city options: Phoenix, Scottsdale, Tucson, Tempe—variety of lifestyles

❌ Cons

  • Not zero: Still paying 2.5% that Nevada doesn't charge
  • Brutal summers: 110°F+ for months, higher cooling costs
  • Water concerns: Long-term water supply issues in desert
  • Variable sales tax: Can reach 10.7% in some areas

Nevada Pros and Cons

✅ Pros

  • Zero income tax: Can't beat 0%—full paycheck is yours
  • Las Vegas lifestyle: Entertainment, dining, nightlife capital
  • No corporate income tax: Good for business owners
  • Growing diversification: Tech, healthcare expanding beyond gaming
  • 24/7 city: Services, entertainment available around the clock

❌ Cons

  • Las Vegas-centric: Most opportunity concentrated in one metro
  • Gaming economy: Still heavily dependent on tourism/casinos
  • Higher sales tax: 6.85-8.375% state+local
  • Extreme heat: Vegas summers rival Phoenix for brutality
  • Water crisis: Colorado River issues affect Nevada severely
💡

CountryTaxCalc.com is reader-supported. When you use our partner links, we may earn a commission at no cost to you. This helps us provide free tax calculators and comparison tools. Learn more about our affiliate partnerships

Talk to a Real CPA

Taxhub

Moving from Arizona to Nevada? Multi-state returns are tricky—partial-year residency, different deadlines, avoiding double taxation. Get matched with a CPA who specializes in state moves. Virtual meetings, fixed pricing.

Get Matched With a CPA →

Frequently Asked Questions

Q: How much will I save with Nevada's 0% vs Arizona's 2.5%?

Exactly 2.5% of your taxable income. At $100K: $2,500/year. At $200K: $5,000/year. At $500K: $12,500/year. The savings scale linearly since Arizona's rate is flat. Over 10 years at $150K income, that's $37,500 in savings.

Q: Which has lower overall cost of living?

Very similar overall. Phoenix metro is slightly cheaper for housing (5-10%). Las Vegas has higher entertainment costs but lower grocery costs. Both are significantly cheaper than California. The 2.5% income tax difference is the main financial distinction.

Q: Which has better job opportunities?

Phoenix metro has more diverse opportunities—tech, healthcare, finance, manufacturing, aerospace. Las Vegas is growing but still concentrated in gaming, hospitality, and construction. Phoenix has more Fortune 500 companies and is a larger job market overall.

Q: What about retiring in each state?

Nevada: Zero tax on all retirement income. Arizona: 2.5% on retirement income BUT Social Security is exempt. For pure tax savings, Nevada wins. For lifestyle variety and healthcare access, Arizona often preferred. Both are popular retirement destinations.

Q: Which is better for remote workers from California?

Both are excellent California escapes. Nevada's 0% is better on paper. But Arizona offers: larger city options, more diverse lifestyle, and only 2.5% tax. Many Californians choose Phoenix/Scottsdale for the 'city feel' while still saving massively vs CA's 13.3%.

Related Comparisons

Arizona CalculatorNevada CalculatorCalifornia vs ArizonaCalifornia vs Nevada