How Arizona compares
Ranked against the other 49 states on the figures we hold. Rates that combine state and local components — sales tax, the minimum wage where it varies by region — are shown on this page but not ranked, because a single number would misstate them.
| Figure | AZ | Nationally | In its region |
|---|---|---|---|
| PopulationUS Census Bureau, Vintage 2025 estimates, July 1, 2025 | 7,623,818 | 14th highest of 50 | 2 of 4 |
| GDP ($bn)Bureau of Economic Analysis, 2025 | 598.2 | 15th highest of 50 | 2 of 4 |
| Median household incomeUS Census Bureau, ACS 2024 1-year, 2024 | $81,486 | 20th highest of 50 | 1 of 4 |
| Unemployment rateBureau of Labor Statistics, LAUS (seasonally adjusted, preliminary), September 2026 | 4.9% | 46th lowest of 50 | 4 of 4 |
| Foreign-born shareUS Census Bureau, ACS 2024 1-year, 2024 | 13.4% | 15th highest of 50 | 2 of 4 |
| Property tax ratechecked Nov 2026; confirm with the Arizona legislature | 0.51% | 5th lowest of 50 | 1 of 4 |
| Deposit return window (days)checked Nov 2026; confirm with the Arizona legislature | 14 | tied 1st lowest of 50 | 1 of 4 |
| Eviction notice (days)checked Nov 2026; confirm with the Arizona legislature | 5 | tied 23rd highest of 50 | 1 of 4 |
| Final pay deadline (days)checked Nov 2026; confirm with the Arizona legislature | 7 | tied 23rd lowest of the 29 states that set one | 4 of 4 |
- State income tax: yes41 of 50 states answer the same way
- At-will employment: yesthe same in all 50 states — it does not set Arizona apart
- Paid sick leave required: yes20 of 50 states answer the same way
- Paid family leave: no38 of 50 states answer the same way
- Workers' comp required: yes49 of 50 states answer the same way
- Rent control permitted: no46 of 50 states answer the same way
- Annual report required: no7 of 50 states answer the same way
Statistical figures: US Census Bureau, Vintage 2025 estimates (July 1, 2025) · US Census Bureau, ACS 2024 1-year (2024) · Bureau of Economic Analysis (2025) · Bureau of Labor Statistics, LAUS (seasonally adjusted, preliminary) (September 2026) · SBA Office of Advocacy, 2025 Small Business Profiles (2025). Tax, wage, business and tenancy figures are recorded from state sources and were last checked on 2026-11-05 — confirm anything you are about to act on with the Arizona legislature.
What's changing in Arizona
Enacted changes with a fixed effective date. Contracts, payroll and leases signed now may run past these dates.
Coming up
- January 1, 2027
Took effect in the last 12 months
- January 1, 2026Minimum wage rose to $15.15/hrSource ↗
Checked against official sources on 2026-11-05.
How long you have in Arizona
The periods that decide whether something is on time. Days are calendar days unless the underlying rule says otherwise.
- Return a security deposit within
- 14 days
- Eviction notice before filing
- 5 days
- Final paycheck within
- 7 days
- LLC formation processed in
- 1—3 business days (online)
- Overtime starts after
- 40 hours/week (FLSA)
AI Legal Insights — Arizona
AI-generated · Updated July 2026
Arizona operates under at-will employment doctrine with a flat 2.5% income tax and minimal LLC formation fees ($50), creating a business-friendly regulatory framework. The state mandates earned paid sick leave (1 hour per 30 worked, up to 40 hours annually) but lacks a paid family leave program.
Arizona's low property tax (0.51%) and competitive flat income tax attract businesses, while a $481B GDP and 582K small businesses reflect strong economic activity. The state's 3.5% unemployment and growing population (7.36M) signal an expanding labor market and consumer base.
As a border state with 13.7% foreign-born residents, Arizona has significant immigration enforcement interactions and a diverse workforce. Employers must navigate federal I-9 compliance alongside state-specific employment laws affecting immigrant workers.
- ›Include explicit at-will employment disclaimers in offer letters and handbooks to preserve termination flexibility.
- ›Specify Arizona law and venue (Maricopa County often) for dispute resolution given state-specific statutes like the Earned Paid Sick Time Act.
- ›Address independent contractor classification carefully under Arizona's ABC test to avoid misclassification penalties.
AI-generated insights · Verify with a licensed attorney before relying on this information.
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Employment Laws
Arizona labor regulations
Arizona is an at-will employment state with a minimum wage of $15.15/hr in 2026, adjusted for inflation every January under Proposition 206 (2016); it rises to $15.65/hr on January 1, 2027. The same law created earned paid sick time for employees of all private employers. Arizona has no state paid family leave program, so federal FMLA applies.
| Law | AZ Rule | Federal Floor |
|---|---|---|
| Minimum Wage | $15.15/hr (2026); $15.65/hr from Jan 1, 2027; CPI-indexed annually | $7.25/hr |
| Overtime | After 40 hrs/week (follows FLSA) | FLSA: after 40 hrs/week |
| Paid Sick Leave | 1 hr per 30 hrs worked; up to 24 hrs/yr (under 15 employees) or 40 hrs/yr (15+ employees) | None (federal) |
| Paid Family Leave | None (state) | FMLA: 12 weeks unpaid |
| Workers Comp | Required for employers with 1+ employees | Federal employees: yes |
| At-Will Employment | Yes — state law lists the limited grounds for wrongful-termination claims | Default nationwide |
| Final Paycheck | If fired: within 7 working days or by the end of the next pay period, whichever is sooner; if the employee quits: next regular payday | No federal deadline |
| Meal Breaks | No state requirement for adults | No federal requirement |
| Non-Compete Agreements | Enforceable only if reasonable in duration, geography, and scope and tied to a legitimate business interest | No federal ban in effect |
- The Arizona Civil Rights Act prohibits employment discrimination based on race, color, religion, sex, national origin, age (40+), disability, and genetic test results.
- Proposition 206 (2016) indexes the minimum wage to inflation each January; Flagstaff sets a higher local minimum wage.
- Earned paid sick time covers employees of all private employers; the annual cap depends on employer size (24 or 40 hours).
- Employers must give the Arizona earned paid sick time notice and record accrued and used sick time on pay statements or in a separate record.
- Returning service members have reemployment rights under the federal USERRA.
- Employers cannot fire employees for serving on a jury, voting, or reporting violations of law to the employer or a public body.
Sources: U.S. Department of Labor state minimum wage table · state labor agencies (checked Nov 2026)
Landlord-Tenant Laws
Arizona rental regulations
Arizona's Residential Landlord and Tenant Act governs most residential leases. Security deposits are capped at 1.5 months' rent and must be returned within 14 days (excluding weekends and holidays) after move-out. Rent control is prohibited statewide. Eviction for non-payment requires a 5-day written notice.
| Topic | AZ Rule |
|---|---|
| Security Deposit | Cannot exceed 1.5 months' rent (prepaid rent counts toward the cap, but tenants may voluntarily prepay more) |
| Deposit Return | Within 14 days of move-out, excluding weekends and holidays, with an itemized list of deductions |
| Rent Control | Prohibited statewide; cities and counties cannot enact rent control |
| Eviction Notice (Non-Payment) | 5-day written notice to pay or vacate |
| Lease Violation | 5-day notice for material violations affecting health and safety, 10-day notice to cure for other violations; immediate termination for serious criminal activity |
| Late Fees | Must be reasonable and stated in the written lease |
| Repairs | Tenant may give written notice and, for minor defects the landlord fails to fix, repair and deduct up to a limited amount |
| Landlord Entry | At least 2 days' notice required except for emergencies |
| Retaliation Protection | Landlord may not retaliate against a tenant for reporting code violations, complaining to the landlord, or joining a tenant organization |
| Lease Termination (Month-to-Month) | 30-day written notice required from either party |
Both landlords and tenants have enforceable rights under Arizona law. Document all communications and keep copies of your lease agreement. Use AI review to spot risky clauses before signing.
Starting a Business
Arizona LLC formation guide
Arizona is one of the least expensive states to form an LLC: the filing fee is $50, and LLCs do not file an annual report with the Arizona Corporation Commission. The 2.5% flat personal income tax and 4.9% corporate rate keep ongoing tax costs low, and the state sales tax (Transaction Privilege Tax) is 5.6%, about 8.52% on average with local taxes. Online filings with the Arizona Corporation Commission are typically processed within 1–3 business days.
Step-by-step LLC formation
- 1Choose a business name — must include "LLC", "L.L.C.", or "Limited Liability Company"; verify availability with the Arizona Corporation Commission (azcc.gov)
- 2Designate a statutory agent — must have a physical Arizona address (cannot be a P.O. box)
- 3File Articles of Organization with the Arizona Corporation Commission online; pay the $50 filing fee
- 4Check the publication requirement — unless your statutory agent's address is in Maricopa or Pima County, a notice of formation generally must be published in a local newspaper within 60 days
- 5Get an EIN from the IRS — free at irs.gov
- 6Register with the Arizona Department of Revenue for Transaction Privilege Tax (sales tax) and employer withholding as applicable at aztaxes.gov
- 7Keep your Commission record current — LLCs do not file annual reports in Arizona, but changes to members, managers, or the statutory agent must be filed as amendments
- 8Open a business bank account using your EIN and Articles of Organization
- 9Obtain any required local business licenses — check city and county requirements (Phoenix, Tucson, and other cities may require local licenses)
Every LLC also needs a free EIN from the IRS (Form SS-4). Apply online at irs.gov — takes about 15 minutes and is required to open a business bank account.
Popular IRS Forms
Most-filed federal forms for Arizona taxpayers
Fill these out online with plain-English guidance — every field explained, no accountant required. Download as a ready-to-file PDF when done.
The main annual federal income tax return every taxpayer files.
Fill out free →Give your SSN or EIN to a client before getting paid as a contractor.
Fill out free →Report $600+ paid to independent contractors during the year.
Fill out free →Tell your employer how much federal tax to withhold from pay.
Fill out free →Report income and expenses from a sole proprietorship or LLC.
Fill out free →Report payroll taxes withheld from employees each quarter.
Fill out free →Get an automatic 6-month extension to file your 1040.
Fill out free →The year-end wage statement employers issue to each employee.
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Federal Offices
United States government offices in Arizona
Walk-in assistance by appointment only. Call (844) 545-5640 to schedule, or book online at irs.gov.
Free Legal Aid
Arizona legal assistance organizations
These organizations provide free or reduced-cost civil legal services to qualifying Arizona residents.
Free civil legal help for low-income Arizonans in Maricopa County
Legal assistance for low-income residents in southern Arizona
Legal services for Navajo Nation and rural Arizona communities
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