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Not legal advice. Laws change. Verify current rules with your installation JAG office, the Arizona Department of Revenue at azdor.gov, your county assessor, or a licensed Arizona attorney before making financial or legal decisions based on this guide. Last reviewed June 2026.
01 · Military Pay and State Income Tax
Arizona exempts all military pay and all military retirement pay from state income tax, making it one of the most favorable states in the nation for servicemembers and veterans.
All active duty military pay received by a member of the U.S. Armed Forces is exempt from Arizona state income tax under Arizona Revised Statutes 43-1022. This includes base pay, special pays, bonuses, combat pay, and all other military compensation. Active duty members stationed in Arizona owe zero Arizona income tax on their military pay.
All military retired pay is 100% exempt from Arizona state income tax. Arizona enacted a full military retirement pay exemption making it one of the most retirement-friendly states for veterans in the Southwest. This applies to regular military retirement, Reserve Component retirement, and disability retirement pay. Retirees relocating to Arizona from higher-tax states frequently see a significant increase in take-home retired pay.
VA disability compensation is federally exempt from income tax. Arizona fully honors this exemption, and no Arizona state income tax applies to VA disability payments.
Pay received by Arizona National Guard members and Reserve Component servicemembers for training periods and periods of state or federal active duty is exempt from Arizona income tax. This includes weekend drills, annual training, and mobilization pay.
Arizona enacted a flat income tax rate of 2.5% in 2023, one of the lowest flat rates of any state that levies an income tax. For military family members whose income is not exempt (such as civilian spouse wages), the 2.5% flat rate is very favorable compared to most states.
Do this next. File Arizona Form 140 and the applicable military schedules. Since most military pay is exempt, many active duty Arizona returns are simple. For spouse income and other non-exempt income, the flat 2.5% rate applies. Contact the Arizona Department of Revenue at (602) 255-3381 or visit azdor.gov for military tax guidance. Free VITA tax preparation is available at all Arizona military installation tax centers.
02 · Property Tax Exemptions for Veterans
Arizona provides strong property tax relief for disabled veterans and has one of the more comprehensive exemption programs in the Southwest.
Veterans rated 100% permanently and totally (P&T) disabled by the VA receive a full property tax exemption on their primary residence in Arizona under ARS 42-11111. Apply through your county assessor. Maricopa County (Phoenix/Glendale area), Pima County (Tucson), and Cochise County (Sierra Vista/Fort Huachuca) all process these applications.
Arizona provides tiered partial property tax exemptions for veterans with service-connected disability ratings below 100%. The exemption reduces the assessed value of the primary residence proportionally to the disability percentage. Contact your county assessor for current year dollar values. Income eligibility thresholds may apply for some partial exemption tiers.
The surviving spouse of a veteran who qualified for the property tax exemption may retain the exemption as long as they continue to occupy the primary residence and do not remarry.
Arizona offers a property valuation protection option (property tax freeze) for homeowners age 65 and older who meet income eligibility requirements, including veteran homeowners. This prevents assessed value from increasing due to market appreciation. Apply through your county assessor.
Arizona has property tax rates below the national average in most counties. Maricopa County (Phoenix metro) and Pima County (Tucson) both have effective rates well below 1% of market value for primary residences assessed at residential rates. This makes Arizona particularly attractive for veteran homeowners.
Do this next. Apply for property tax exemptions at your county assessor office. Maricopa County Assessor: (602) 506-3406. Pima County Assessor: (520) 724-8630. Cochise County Assessor (Fort Huachuca): (520) 432-8650. Yuma County Assessor: (928) 373-6040. Bring VA award letter, DD-214, and Arizona primary residence documentation. Applications processed within 60 to 90 days typically.
03 · Vehicle Registration and Driver License
Arizona honors SCRA vehicle protections and offers meaningful benefits for disabled veteran vehicle registration and specialty plates.
Active duty servicemembers stationed in Arizona are NOT required to register their vehicles in Arizona under the SCRA. Vehicles registered in your home state may be legally driven in Arizona for the duration of your assignment. Keep current orders accessible in your vehicle.
Arizona veterans rated 100% service-connected disabled receive a waiver of vehicle registration fees for one vehicle per year under ARS 28-2354. Apply through the Arizona MVD with your VA disability award letter.
Arizona requires vehicle emissions testing in the Phoenix metro (Maricopa County) and Tucson (Pima County) areas. Military vehicles may qualify for testing exemptions depending on registration state and vehicle age. SCRA-protected out-of-state registrations generally follow the home state emissions rules.
Arizona offers specialty license plates for veterans, disabled veterans, Gold Star families, Purple Heart recipients, Medal of Honor recipients, and multiple branch-specific plates. Many veteran plates have reduced fees. Apply through the Arizona MVD or ADOT.
Under VBTA 2018, military spouses are not required to obtain an Arizona driver license or register their vehicle in Arizona simply because they moved to Arizona on military orders. Home-state plates and license remain valid.
Do this next. Arizona MVD: (602) 255-0072. The ServiceArizona online portal allows many MVD transactions without an in-person visit. Servicemembers should bring their military ID for expedited processing. For emissions testing questions related to military vehicles, contact ADOT at (602) 712-7355.
04 · Military Spouse Employment and Licensing
Arizona has enacted strong professional license reciprocity for military spouses and offers diverse employment opportunities across the Phoenix and Tucson metro areas.
Arizona law (ARS 41-1093.01) requires expedited processing of professional license applications for military spouses within 30 days of a complete application. Covered professions include nursing, teaching, cosmetology, real estate, engineering, and many others. Arizona has one of the broader reciprocity frameworks in the Mountain West for military spouse licensing.
The greater Phoenix metro (Maricopa County, Glendale, Scottsdale, Tempe, Mesa, Chandler) has one of the most diverse and rapidly growing economies in the Southwest. Major employment sectors include healthcare (Banner Health, Dignity Health, HonorHealth), technology (Intel, TSMC chip fab expansion, Amazon), financial services, and government contracting supporting the Arizona military mission. Military spouses with professional credentials will find strong demand.
Tucson has a substantial government, military contracting, and University of Arizona healthcare and research employment base. Raytheon (major DoD contractor) has a large Tucson presence. University of Arizona provides healthcare, research, and education employment. The cost of living in Tucson is lower than Phoenix, making it a particularly affordable assignment.
Fort Huachuca supports a large military intelligence and cyber contracting workforce. Sierra Vista has employment opportunities primarily in government contracting, healthcare, and retail. The area is small (population approximately 40,000) and some military spouses commute to Tucson (90 miles north) for broader employment.
Military spouses who leave a job to follow their servicemember on a PCS move are eligible for Arizona unemployment insurance benefits. Leaving to accompany a military spouse is considered leaving with good cause under Arizona law.
Do this next. Contact the Arizona Department of Economic Security for unemployment: (602) 364-2722. For licensing reciprocity, contact the specific Arizona licensing board for your profession. Arizona Department of Education for teaching licenses: (602) 542-4368. Arizona State Board of Nursing: (602) 771-7800.
05 · SCRA Federal Protections in Arizona
SCRA applies fully in Arizona. Here is what each protection means for servicemembers at Luke AFB, Davis-Monthan, Fort Huachuca, and MCAS Yuma.
You can terminate any Arizona residential lease with 30 days written notice after receiving PCS orders or a deployment of 90 days or more. Deliver written notice with orders to your landlord. Termination is effective 30 days after the next rent due date. Arizona rental markets near all major installations are familiar with this process.
Debts originated before entering active duty must be reduced to a maximum 6% annual interest rate upon written request with orders. Applies to mortgages, auto loans, credit cards, and other pre-service obligations. Lenders are federally required to comply.
Arizona courts cannot foreclose on a servicemember primary residence without a court order while on active duty and for 1 year after release from active duty, regardless of payment status.
If you are a party to a civil lawsuit in Arizona and cannot appear due to military service, you may request a stay of proceedings. No default judgment can be entered against an active duty servicemember without first appointing a military attorney.
Arizona landlords cannot evict an active duty servicemember or their family from a primary residence without a court order. The monthly rent threshold for SCRA eviction protection is adjusted annually by the DoD.
Do this next. If an Arizona landlord, lender, or court is not honoring SCRA protections, contact JAG Legal Assistance. Luke AFB JAG: (623) 856-6353. Davis-Monthan JAG: (520) 228-3540. Fort Huachuca JAG: (520) 533-5726. MCAS Yuma Legal: (928) 269-3104. Free legal assistance for eligible servicemembers and dependents.
06 · Education Benefits in Arizona
Arizona National Guard members receive a tuition waiver at Arizona public institutions, and active duty families qualify immediately for in-state tuition at Arizona colleges and universities.
Arizona Army and Air National Guard members in good standing receive a tuition waiver at Arizona public universities and community colleges, including Arizona State University (ASU), University of Arizona (U of A), Northern Arizona University (NAU), Maricopa County Community Colleges (10 campuses), Pima Community College, and other public Arizona institutions. Contact your unit administrator or the Arizona National Guard State Education Office for current eligibility requirements and application instructions.
Arizona State University is one of the largest universities in the United States by enrollment, with campuses in Tempe, Glendale (close to Luke AFB), Downtown Phoenix, Mesa, and a robust online program. ASU has a dedicated Pat Tillman Veterans Center and is well-known for its military-friendly programs and Yellow Ribbon participation.
Active duty servicemembers stationed in Arizona and their spouses and dependents qualify immediately for in-state tuition at all Arizona public colleges and universities. No 12-month waiting period applies. Present current orders to the registrar or veterans services office at enrollment.
ASU, U of A, NAU, and several Arizona private institutions participate in the Yellow Ribbon Program for eligible Post-9/11 GI Bill students. Check the VA Yellow Ribbon school finder for current participating Arizona schools and contribution amounts.
Maricopa Community Colleges (near Luke AFB), Pima Community College (near Davis-Monthan), Cochise College (near Fort Huachuca), and Arizona Western College (near MCAS Yuma) all accept GI Bill benefits and offer veteran-friendly scheduling. These are excellent starting points for transitioning servicemembers or spouses seeking certifications and associates degrees.
Do this next. Contact the veterans services office at your Arizona institution upon enrollment. ASU Pat Tillman Veterans Center: (480) 727-5109. U of A Veterans Education and Transition Services: (520) 621-5819. Cochise College Veterans Services: (520) 515-5493. Pima Community College Veterans Resource Center: (520) 206-4855. Bring DD-214, VA Certificate of Eligibility, and current orders if on active duty.
07 · Climate
Arizona warm climate, below-average property taxes, and affordable housing (particularly in Tucson and Southern Arizona) make it one of the most popular states for military retirees.
Arizona has over 300 days of sunshine annually. Outdoor activities include hiking (Camelback Mountain, Superstition Wilderness, Saguaro National Park), golf (one of the highest concentrations of golf courses in the world in the Phoenix area), climbing, river recreation, and high-altitude skiing at Flagstaff area resorts (about 2 hours from Phoenix) including Snowbowl.
Tucson is consistently ranked among the most affordable metro areas in the Southwest and has one of the highest concentrations of veterans per capita in the country. Davis-Monthan AFB families in Tucson enjoy low cost of living, a strong veteran community infrastructure, and easy access to the University of Arizona for dependent education and spouse employment.
The greater Phoenix metro has grown explosively in the past decade, with major semiconductor, tech, and financial services expansion. Luke AFB families benefit from proximity to this economic activity. Glendale, Goodyear, Avondale, and Peoria are popular residential areas for Luke families with good school districts and reasonable home prices relative to West Coast assignments.
Arizona is one of the top five states for military retirement. The combination of no income tax on retired pay, warm climate, relatively affordable housing, strong VA medical infrastructure (Phoenix VA Medical Center, Southern Arizona VA Healthcare System), and a large established veteran community make it a natural landing spot.
Do this next. The VA healthcare system in Arizona has significant capacity. Phoenix VA Medical Center: (602) 277-5551. Southern Arizona VA Health Care System (Tucson): (520) 792-1450. Carl T. Hayden VA Medical Center serves the Phoenix metro. Always confirm VA enrollment and transfer your healthcare records before PCS.
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Research-Ranked
Rankings based on Military Times Best for Vets, GI Jobs Military Friendly Schools, and Victory Media research methodology. Yellow Ribbon participation verified annually.
Rankings and program details change annually. Verify current Yellow Ribbon participation and benefit amounts at benefits.va.gov/GIBILL before enrolling. GI Jobs Military Friendly designation and Military Times rankings are independently published each year.
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