Compare taxes and see how much you save moving from Texas to Arizona
This page covers the reverse angle of the Arizona vs Texas comparison — Texas to Arizona movers. Texas has zero income tax vs Arizona's 2.5% flat rate, which sounds decisive — but Arizona's dramatically lower property tax (~0.63% vs Texas's ~1.63%) produces a surprising result. For most homeowners at incomes below $250,000, Arizona's total state and local tax burden is LOWER than Texas's despite the income tax. On a $400,000 home: Arizona's property tax is approximately $4,000/year less than Texas's. Arizona income tax at $100,000 is $2,500. Net: Arizona homeowners save approximately $1,500/year vs Texas at $100,000 income. At $400,000 income, Texas pulls ahead. The crossover point is approximately $250,000–300,000 annual income on a typical Arizona home value.
No Income Tax
6.25% state sales tax; high property tax ~1.63%; no corporate income tax
Flat Rate (since 2023)
Very low property tax ~0.63%; combined sales tax ~8.37%
At $100,000 income:
That is $125/month back in your pocket!
| Income | TX Tax | AZ Tax | Savings | 10-Year |
|---|---|---|---|---|
| $50,000 | $0 TX income tax; ~$4,075 property (median $250K × 1.63%) = ~$4,075 total | $1,250 AZ income tax (2.5%); ~$1,575 property ($250K × 0.63%) = ~$2,825 total | AZ saves ~$1,250 | $12,500 |
| $100,000 | $0 TX income tax; ~$6,520 property ($400K × 1.63%) = ~$6,520 total | $2,500 AZ income tax; ~$2,520 property ($400K × 0.63%) = ~$5,020 total | AZ saves ~$1,500 | $15,000 |
| $150,000 | $0 TX income tax; ~$8,150 property ($500K × 1.63%) = ~$8,150 total | $3,750 AZ income tax; ~$3,150 property ($500K × 0.63%) = ~$6,900 total | AZ saves ~$1,250 | $12,500 |
| $250,000 | $0 TX income tax; ~$9,780 property ($600K × 1.63%) = ~$9,780 total | $6,250 AZ income tax; ~$3,780 property ($600K × 0.63%) = ~$10,030 total | Nearly identical — crossover point | $0 |
| $400,000 | $0 TX income tax; ~$13,040 property ($800K × 1.63%) = ~$13,040 total | $10,000 AZ income tax; ~$5,040 property ($800K × 0.63%) = ~$15,040 total | TX saves ~$2,000 at high incomes | TX better at $400K+ |
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Moving between Texas and Arizona? The income vs property tax trade-off calculation and partial-year returns require specialist input. Get matched with a CPA who specialises in Sun Belt state moves.
⚠ Not for simple single-state returns. Free filing is fine for straightforward W-2 situations.
Get Matched With a CPA →The crossover point depends on home value. For a $400,000 home (typical professional purchase): Texas becomes cheaper at approximately $160,000 annual income (where Texas's $0 income tax advantage starts exceeding Arizona's ~$4,000 property tax saving). For a $600,000 home: crossover at approximately $240,000 income. For a $300,000 home: crossover at approximately $120,000 income. The general rule: the lower your home value relative to income, the sooner Texas wins. The higher your home value relative to income (e.g., retirees with paid-off homes on modest income), the more likely Arizona is cheaper.
The primary drivers for Texas-to-Arizona moves: (1) Property tax — homeowners hit by Texas's ~1.63% rate often calculate significant savings from moving to Arizona's ~0.63%; on a $600,000 home, approximately $6,000/year. (2) Housing cost — Phoenix and Scottsdale are increasingly competitive vs Austin and Dallas on purchase prices. (3) Climate preference — while both are hot, Arizona's dry heat is preferred by many vs Texas's humid coastal areas. (4) Water sports and outdoor recreation — Arizona's proximity to Utah, Colorado, and the Southwest deserts offers different outdoor experiences than Texas. The income tax cost (2.5% flat) is partially or fully offset by the property tax savings for most homeowners.
Austin has the deeper established tech ecosystem — Dell, Tesla (North America HQ), Apple's Austin campus, and hundreds of startups plus VC investment. Phoenix is closing the gap rapidly: TSMC's $65B semiconductor fab expansion is transforming Phoenix into a semiconductor manufacturing centre; major financial services firms (JPMorgan Chase, American Express, Citi) have significant Phoenix operations; and multiple tech companies are expanding in the Phoenix metro. Tax-wise: both are competitive at most professional salaries (Arizona's total burden is lower for homeowners below $250,000 income; Texas better above). Austin's startup scene and VC ecosystem is currently more vibrant; Phoenix offers semiconductor and financial services specialisation.
Arizona taxes owner-occupied primary residences at a 10% assessment ratio of full cash value (vs 18% for commercial and rental property). The lower assessment ratio effectively produces the low ~0.63% effective tax rate — it is already built into how property is assessed. Arizona does not offer a dollar-amount homestead exemption like Florida or Texas's school district exemptions. However, Arizona does offer: a freeze on assessed valuation for low-income homeowners 65+ (if income is below $36,077 for 2024); a refundable income tax credit for property tax paid by qualifying lower-income homeowners; and county-specific exemptions for qualifying seniors and veterans.
Texas wins for most business structures. Texas has no corporate income tax, no franchise tax (the Texas Margin Tax applies at very low rates), and no personal income tax — the most business-friendly major state structure in the US. Arizona has a 4.9% corporate income tax on C-corps (2024, reduced from 7.1% in 2017 as part of ongoing reductions) plus the 2.5% personal income tax for sole proprietors and pass-through entities. For C-corps: Texas is significantly better. For S-corps and single-member LLCs (taxed as sole props): Texas saves the personal income tax rate difference at the personal level (2.5%), but business profits are subject to the same personal rate comparison. Arizona's 4.9% corporate rate is being reduced further and may approach Texas's territory in coming years.