City of Mesa
Home EconDev MenuTaxes
Mesa, Arizona offers a competitive operating environment compared to other Southwest markets. For more than a decade, Arizona has implemented reductions in taxes and created incentive programs favorable to businesses.
ARIZONA TAX QUICK FACTS
- Arizona has the 14th lowest unemployment insurance tax rate in the nation and the lowest amount in the U.S. for total wage base subject to unemployment tax ($8,000).
- The assessment ratio for real and personal property taxes on commercial and industrial properties is 16.5%.
- Arizona has one of the most aggressive additional depreciation schedules, resulting in reduced operating costs and a quicker path to profitability.
- Arizona also exempts equipment used in manufacturing from sales tax.
- Virtually all services are exempt from sales tax.
- 100% of net operating loss may be carried forward for five years.
Plus, the state DOES NOT levy the following taxes:
- Corporate franchise tax.
- Business inventory tax.
- Income tax on dividends from out-of-state subsidiaries.
- Worldwide unitary tax.
BUSINESS TAXES
| Business Taxes | |||||
| Sales Tax* | Corporate Income Tax | Unemployment (% of Payroll) |
Taxable Wage Base |
Worker's Comp (per $100 payroll) |
Inventory |
| 8.30% | 4.9% | 2% | $8,000 | $0.16 | No |
| *2023 sales tax breakdown: Mesa - 2%; County - 0.7%: State - 5.6% |
|||||
PERSONAL INCOME TAX
Arizona personal income tax rate is 2.5%, compared to other Southwest markets, which range from 4.6% to 9.3%.
PROPERTY TAX
The assessment ratio for commercial property is 16.5% of the limited property value (LPV), as determined by the Maricopa County Assessor. The property tax is composed of two rates, primary and secondary. Primary tax rates typically fund government entities like municipalities and school districts, while secondary tax rates usually fund special districts and bond issuances. The rates in the following table are per $100 of assessed value. The rate is then multiplied by the assessed value to determine the tax liability. For example**, a commercial property within Mesa Public School District with an LPV of $100,000 would pay $1,800.21 annually in property tax. $100,000 LPV x 0.165 (assessment ratio) = $16,500 x $10.9104/$100 = $1800.21. A commercial property within the same district with an LPV of $500,000 would pay $9,000.00 annually in property tax.
|
Primary Tax Total |
Secondary Tax Total (Rate/100)* | Total Nominal Tax Rate(Rate/100)* | Total Effective Tax Rate | |
| Mesa Public School District* |
6.0753 | 4.8351 | 10.9104 | 1.80% |
| Higley Unified School District |
5.8250 | 4.3389 | 10.1639 | 1.67% |
| Queen Creek Unified School District | 6.6948 | 4.3135 | 11.0083 | 1.81% |
| Gilbert Public School District | 6.0753 | 4.9569 | 11.0322 | 1.82% |
| Tempe Public School District | 6.9529 | 5.5058 | 12.4587 | 2.05% |
|
Rates portrayed include county-wide districts, i.e., County, Comm. College, City, School, Edu. Equal, Spec. HC, EVIT or WESTMEC where applicable. *Rates do not include some special districts, which may vary across the City. |
||||
01162024