Arizona vs Nevada: Taxes & Take-Home Pay 2026

Nevada has no income tax by constitution

Nevada does not tax wages, retirement income or investment income, and its constitution bars the Legislature from enacting a personal income tax. Arizona taxes income at a flat 2.5%, the lowest flat rate of any state with a wage tax. The gap is real but smaller than for most no-tax comparisons.

Phoenix and Las Vegas are less than a day's drive apart, so moves between them are common. The Bullhead City–Laughlin area also has daily commuters across the Colorado River.

Worked example: what Arizona tax actually costs

A single filer earning $90,000 pays $1,856 in Arizona income tax after the $15,750 standard deduction, about $155 a month. A married couple with two children on $150,000 pays $2,713 after the $31,500 deduction and the $125 per-child credit. In Nevada both pay zero state income tax.

Sales tax adds slightly to Nevada's advantage. Nevada's average combined rate is 8.24% and Arizona's is 8.54%. On $35,000 of taxable spending, that is $105 more in Arizona. The two states' state-level rates are 5.6% (Arizona) and 6.85% (Nevada), but Arizona cities add more.

Paychecks: no state payroll deductions in either state

Neither state has a disability or paid family leave deduction from employee pay in 2026. Nevada's Modified Business Tax is a payroll tax paid by employers, not deducted from wages. On a Nevada paycheck the only taxes are federal income tax, Social Security and Medicare. On an Arizona paycheck, add Arizona withholding. Under state law each employee elects a withholding percentage in writing within five days of starting work, or the employer applies the department's default rate.

Living in one state, working in the other

Which state taxes your wages depends on where you do the work, not where your employer is based.

• Nevada resident working in Arizona: Arizona requires withholding on compensation for services performed in Arizona. You file an Arizona nonresident return on those wages, and with no Nevada income tax there is no home-state credit.
• Arizona resident working in Nevada: Nevada does not tax the wages, but Arizona taxes residents on all income wherever earned. A Bullhead City resident working at a Laughlin casino still owes Arizona tax.
• Remote workers: wages are generally sourced to where the work is done. A Las Vegas resident working remotely for a Phoenix employer, entirely from Nevada, should ask the employer to stop Arizona withholding.

Retirement: smaller difference than you might expect

Nevada taxes no retirement income. Arizona does not tax Social Security, fully exempts military retirement pay, and subtracts up to $2,500 of federal civil service or Arizona public-employee pensions. Each spouse aged 65 or older also gets a $2,100 exemption. Private pensions, 401(k) and IRA withdrawals are taxed at 2.5% in Arizona.

A retired couple, both 65 or older, with $60,000 of IRA and pension income plus Social Security would pay about $608 in Arizona after the $31,500 joint standard deduction and two $2,100 age exemptions, and nothing in Nevada. For many retirees, housing costs and property tax will matter more than that.

What Nevada collects instead, and what Arizona offsets

Nevada funds itself without an income tax through a 6.85% statewide sales tax, county add-ons and taxes paid by businesses, including the employer-paid Modified Business Tax. For a worker, almost all of the Nevada tax bill is sales tax and property tax.

If you itemize on your federal return, you can deduct state and local sales tax instead of income tax. Nevada residents nearly always take the sales tax option, and Arizona residents usually deduct their Arizona income tax. Either way, the total state and local deduction, including property tax, is capped at $40,400 for 2026.

Arizona has several features that shrink its tax for some households. Qualified tips and overtime can be subtracted, matching the federal deductions. Filers who take the standard deduction can raise it by charitable gifts, up to $1,000 ($2,000 joint). The $125 per-child credit phases out above $200,000 of federal AGI ($400,000 joint). For a tipped worker on the Las Vegas Strip compared with one in Scottsdale, the gap can be smaller than the headline 2.5% suggests.

The year you move

Moving from Arizona to Nevada, you file an Arizona part-year return covering income received while you lived in Arizona and Arizona-source income afterwards. There is no Nevada return. Moving the other way, Arizona taxes you from your arrival date. Make a new Arizona withholding election with your employer if you start Arizona work, and end Arizona withholding once you leave if your work moves too.