Arizona has the 11th highest sales tax rates in the U.S., according to an independent study by the Tax Foundation.
The impact of higher tax rates may not be immediately noticeable on that weekly trip to the grocery store, but some Valley residents pay more for the same item than their neighbors in surrounding cities because of varying sales tax rates.
"Arizona leans heavily on its sales tax. Taken as a whole, Arizona's sales and gross receipts taxes account for 60 percent of state revenue and nearly 40 percent of combined state and local revenue. Nationally, sales taxes account for less than 23 percent of state and local revenue," said Jared Walczak, policy analyst for the Tax Foundation.
Arizona has a state sales tax rate of 5.6 percent, but county and city governments can stack additional taxes.
"That's why you pay a 7.95 percent sales tax in Scottsdale, 8.0 percent in Phoenix, 8.1 percent in Tucson, and 8.951 percent in Flagstaff. But the state's highest combined sales tax rate is found in the small town of Fredonia, gateway to both the Grand Canyon and 10.9 percent sales tax rates," Walczak said.
Since tax rates can vary quite a bit among Valley cities, personal finance specialist Mike Sullivan says sometimes it's worth driving to a neighboring city to save on big purchases. Two or three percent might not sound like a lot, but when it comes to a $20,000 purchase, you're saving hundreds if not thousands of dollars.
For example: a car in Scottsdale will cost you 1.25 percent less than the same car in Glendale, solely because of the sales tax imposed by each city.
Where does this money go? Suillivan says the dollars you pay in taxes generally go to every-day resources like schools and the operation of public facilities. Some of those tax dollars might go to bonds the city owes --like Glendale -- and its contracts with large venues, like the University of Phoenix Stadium and the Gila River Arena.
AZ sales tax: 5.6 percent
Maricopa County sales tax: 0.7 percent
Cities with the highest sales taxes:
Guadalupe: 4.00 percent
Gila Bend, El Mirage, Cave Creek, Carefree, Youngtown & Buckeye: 3.00 percent
Glendale: 2.9 percent
Cities with the highest TOTAL sales tax:
Guadalupe: 10.3 percent
Buckeye, Carefree, Cave Creek, El Mirage, Gila Bend, Youngtown: 9.3 percent
Cities with the lowest TOTAL sales tax:
Gilbert & Chandler: 7.8 percent
Scottsdale: 7.95 percent
Mesa: 8.05 percent
Peoria & Tempe: 8.1 percent
Phoenix: 8.3 percent
More information on other Valley cities:
