Economy of Arizona

2006 total gross state product was $232 billion. If Arizona (and each of the other U.S. states) were an independent country along with all existing countries (2005), it would have the 61st largest economy in the world . This figure gives Arizona a larger economy than such countries as Ireland, Finland, and New Zealand. Arizona currently has the 21st largest economy among states in the United States. As a percentage of its overall budget, Arizona's projected 1.7 billion deficit for '09 is one of the largest in the country, behind such states as Texas, California, Michigan, and Florida, to name a few.

The state's per capita income is $40,828, ranking 39th in the U.S. The state had a median household income of $50,958 making it 22nd in the country and just shy of the U.S. national median. Early in its history, Arizona's economy relied on the "five C's": copper (see Copper mining in Arizona), cotton, cattle, citrus, and climate (tourism). At one point Arizona was the largest producer of cotton in the country. Copper is still extensively mined from many expansive open-pit and underground mines, accounting for two-thirds of the nation's output.

Employment

The state government is Arizona's largest employer, while Wal-Mart is the state's largest private employer, with 17,343 employees (2008). As of June 2010, the state's unemployment rate is 9.6%.

Nearly 70 percent of the land in Arizona is owned by the U.S. government, which leases a portion of the public domain to ranchers or miners.

Taxation

Arizona collects personal income taxes in five brackets: 2.87%, 3.20%, 3.74%, 4.72% and 5.04%. The state sales tax is 6.6%; however, county and municipal sales taxes generally add an additional 2%.

The state rate on transient lodging (hotel/motel) is 7.27%. The state of Arizona does not levy a state tax on food for home consumption or on drugs prescribed by a licensed physician or dentist. However, some cities in Arizona do levy a tax on food for home consumption.

All fifteen Arizona counties levy a tax. Incorporated municipalities also levy transaction privilege taxes which, with the exception of their hotel/motel tax, are generally in the range of 1-to-3%. These added assessments could push the combined sales tax rate to as high as 10.7%.

Single          Tax Rate        Joint        Tax Rate

0 – $10,000 2.870% 0 – $20,000 2.870%

$10,000 – $25,000 3.200% $20,001 – $50,000 3.200%

$25,000 – $50,000 3.740% $50,001 – $100,000 3.740%

$50,000 – $150,001 4.720% $100,000 – $300,001 4.720%

$150,001 + 5.040% $300,001 + 5.040%