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Arizona vs California taxes?
I'm trying to figure out the best state for my startup, focusing on software development. Specifically, how do the corporate tax rates, personal income taxes for employees, and sales taxes on software subscriptions compare between Arizona and California? Are there any significant tax credits or incentives that might sway the decision?
2 Answers
14
93d ago
California's income tax is significantly higher, especially at $75k, but Arizona's property taxes can creep up depending on the location. Sales tax is fairly similar in both states overall, though it varies by city/county. Factor in California's higher cost of living beyond just taxes; that $75k doesn't stretch as far.
8
95d ago
California's corporate tax rate is a flat 8.84%, with a minimum franchise tax. Arizona's is a tiered rate, potentially lower for smaller companies. California's personal income tax is much higher, especially for high earners you might hire. Arizona's is lower and more favorable. Sales tax on SaaS is complex, but both states tax it; however, the rates and specific rules differ. California offers some credits, like the R&D tax credit, but competition for them is fierce. Arizona also has targeted incentives, particularly for companies creating jobs.