Economy of Arizona
The economy of Arizona had a total gross state product in 2025 of $598.1 billion.[1] The composition of the state's economy is moderately diverse, although health care, transportation and the government remain the largest sectors.[2] Early in its history, Arizona's economy relied on the "five C's": copper, cotton, cattle, citrus, and climate.[3] Copper is still extensively mined from many expansive open-pit and underground mines, accounting for two-thirds of the nation's output.[4]
As of 2025, Arizona's largest trading partners include Mexico, Taiwan, Canada, and China.[5]
Arizona's per capita personal income was $68,283 in 2025, ranking 36th in the U.S.[6] The state's 2023 median household income was $74,568, ranking 19th in the country and just below the U.S. national mean.[7]
Sectors
[edit]Copper mining began in the state in the 19th century.[8] Cotton cultivation declined after peaks in the 20th century.[9] After the 1990s, "home building and development displaced most of the large scale orchards" that constituted the state's citrus industry.[10] Arizona's cattle industry has grown since the early 20th century.[11] Arizona's climate drives its tourism and agricultural industries in fall and winter.[12]
Intel has operated in the state for more than forty years.[13][14] TSMC's chip plants in the state are "the largest single foreign investment project in U.S. history."[5]
Employment
[edit]- Total employment (April 2025): 3,633,200[15]
- Total employer establishments (2016): 139,134[16][needs update]
In 2025, 99.5% of Arizona businesses were small businesses and employed 42.% of the state's work force.[17]
The state government is Arizona's largest employer, while Banner Health is the state's largest private employer, with more than 40,000 employees in the state as of 2016.[18]
As of May 2025[update], the state's unemployment rate was 4.1%.[19] Seasonally adjusted nonfarm employment in Arizona was as follows:
| Sector | April 2025 | August 2020 |
|---|---|---|
| Trade, transportation, and utilities |  618,100 |
553,300 |
| Education and health services | 556,200 |
459,400 |
| Government | 435,100 |
430,400 |
| Professional and business services | 461,200 |
419,200 |
| Leisure and hospitality | 367,900 |
269,400 |
| Financial activities | 242,000 |
231,900 |
| Manufacturing | 192,800 |
170,900 |
| Construction | 225,300 |
169,900 |
| Other services | 106,800 |
95,600 |
| Information | 47,700 |
46,100 |
| Mining and logging | 15,700 |
13,300 |
Largest employers
[edit]According to The Arizona Republic, the largest private employers in the state as of 2019[update] were:[20]
Taxation
[edit]Arizona collects personal income taxes in five brackets: 2.59%, 2.88%, 3.36%, 4.24% and 4.54%.[21] The state transaction privilege tax is 5.6%; 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 | 2.59% | 0 – $20,000 | 2.59% |
| $10,000 – $25,000 | 2.88% | $20,001 – $50,000 | 2.88% |
| $25,000 – $50,000 | 3.36% | $50,001 – $100,000 | 3.36% |
| $50,000 – $150,001 | 4.24% | $100,000 – $300,001 | 4.24% |
| $150,001 + | 4.54% | $300,001 + | 4.54% |
See also
[edit]References
[edit]- ↑ "SAGDP1 State annual gross domestic product (GDP) summary". U.S. Bureau of Economic Analysis (BEA). Bureau of Economic Analysis. Retrieved May 8, 2026.
- ↑ Research, Economy (January 1997). "Arizona gross production". stlouisfed. Archived from the original on December 16, 2021. Retrieved December 2, 2021.
- ↑ Sanchez, Camryn (2026-02-18). "The 5 C's: They don't drive Arizona's economy today, but mark when state came into its own". KJZZ. Retrieved 2026-08-21.
- ↑ "Copper Mining in AZ and Tribal Lands | Superfund Research Center". superfund.arizona.edu. Retrieved 2026-08-21.
- 1 2 Lo, Kinling (2026-08-07). "Arizona wants Taiwan's investors to think beyond chips". Rest of World. Retrieved 2026-08-21.
- ↑ "SAINC1 State annual personal income summary: personal income, population, per capita personal income". U.S. Bureau of Economic Analysis (BEA). U.S. Bureau of Economic Analysis. Retrieved May 8, 2026.
- ↑ "S1901: Income in the Past 12 Months". Explore Census Data. United States Census Bureau. Retrieved May 20, 2024.
- ↑ Reznick, Alisa (2026-02-12). "Copper in Arizona: This ore is still a big deal here. So are the environmental concerns". KJZZ. Retrieved 2026-08-23.
- ↑ Sanchez, Camryn (2026-02-11). "Cotton in Arizona: Much of the land where it once grew has been sold off, repurposed". KJZZ. Retrieved 2026-08-23.
- ↑ Schutsky, Wayne (2026-02-16). "Citrus in Arizona: 'You can pretty much wipe out' this C, grower says". KJZZ. Retrieved 2026-08-23.
- ↑ Dowd, Bridget (2026-02-13). "Cattle in Arizona: While the state's Wild West days faded away, this industry hasn't". KJZZ. Retrieved 2026-08-23.
- ↑ Hahne, Greg (2026-02-17). "Climate in Arizona: Weather is a draw here. But deadly heat is straining the state". KJZZ. Retrieved 2026-08-23.
- ↑ "Intel to spend $20 billion to build two new chip factories in Arizona". ABC15 Arizona in Phoenix (KNXV). 2021-03-23. Retrieved 2026-08-21.
- ↑ "Intel To Spend $20B To Expand Arizona Facilities". KJZZ. 2021-03-24. Retrieved 2026-08-21.
- ↑ "Arizona Economy at a Glance". Bureau of Labor Statistics. Archived from the original on October 24, 2020. Retrieved July 17, 2025.
- ↑ "QuickFacts Arizona". Archived from the original on November 9, 2019. Retrieved November 11, 2019.
- ↑ "2025 Small Business Profile - Arizona" (PDF). U.S. Small Business Administration Office of Advocacy. Retrieved February 9, 2026.
- ↑ "Banner Health Buys 32 Urgent Care Facilities". KJZZ. 2016-08-18. Retrieved 2026-08-21.
- ↑ staff, CNBC com (2025-07-10). "12. Arizona". CNBC. Retrieved 2026-01-07.
- ↑ "Who are Arizona's 100 largest employers?". azcentral. Archived from the original on 2019-07-23. Retrieved 2026-08-21.
- ↑ "Arizona Income Tax Rates for 2017". www.tax-rates.org. Archived from the original on February 27, 2017. Retrieved February 26, 2017.
