Side-by-side tax comparison between Arizona (2.5% top rate, flat) and Colorado (4.4% top rate, flat). See which state lets you keep more at every salary level, and how cost of living changes the picture.
Arizona uses a flat income tax (2.5% flat) while Colorado has a flat system (4.4% flat). On a $100K salary, Arizona takes $2,500 in state and local taxes compared to Colorado’s $4,400 \u2014 a difference of $1,900.
Both states use flat brackets, but Colorado’s top rate of 4.4% is higher than Arizona’s 2.5%.
Arizona wins at 10 out of 10 salary levels tested. The advantage exists but is modest across the income spectrum.
| Salary | Arizona | Colorado | Difference | Winner |
|---|---|---|---|---|
| $40K | $33,320 | $32,560 | −$760 | Arizona |
| $50K | $41,105 | $40,155 | −$950 | Arizona |
| $60K | $48,890 | $47,750 | −$1,140 | Arizona |
| $75K | $59,663 | $58,238 | −$1,425 | Arizona |
| $100K | $76,625 | $74,725 | −$1,900 | Arizona |
| $120K | $90,195 | $87,915 | −$2,280 | Arizona |
| $150K | $110,001 | $107,151 | −$2,850 | Arizona |
| $200K | $143,887 | $140,087 | −$3,800 | Arizona |
| $250K | $177,014 | $172,264 | −$4,750 | Arizona |
| $300K | $207,829 | $202,129 | −$5,700 | Arizona |
Take-home pay only tells part of the story. Arizona has a cost of living index of 97 while Colorado is at 105 (national average = 100).
The cost of living gap is moderate. After adjustment, $100K has purchasing power of $78,995 in Arizona vs $71,167 in Colorado. The take-home winner also wins on purchasing power.
For a single earner at $100K filing jointly, take-home becomes $82,210 in Arizona and $80,310 in Colorado \u2014 a difference of $1,900. The gap remains similar regardless of filing status.
On paper, moving from Colorado to Arizona would save $1,900/year on a $100K salary, or $9,500 over 5 years. But relocation involves real costs: moving expenses, potentially buying/selling a home, changing jobs, and adjusting to a new community.
At $1,900/year, the tax difference alone likely isn’t worth relocating for. Other factors — job market, lifestyle, family — should drive the decision. The tax savings are a nice bonus if you’re already considering the move for other reasons.