Arizona Cannabis Tax Rate

20–30% Total Effective Tax

Administering Agency: Arizona Department of Revenue · Updated for 2026

22.1% – 24.1% Combined effective cannabis tax (excise + state sales + local)

Tax Breakdown

Tax	Rate	Notes
State Cannabis Excise Tax	16%	Applied to retail gross receipts
State Sales Tax	5.6%	Applies to medical and adult-use sales
Typical Local Sales Tax	2.5%	Average — actual rate varies by city/county
Local Cannabis Business Tax	Up to 0%	City-level cannabis-specific tax where allowed

Official source: Arizona Department of Revenue ↗ · rates compiled 2026-08-11 · verify current rates at the source before filing.

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How Medical Cannabis Is Taxed

Medical patients skip the 16% excise and pay only the state/local transaction privilege (sales) tax. On a $100 pre-tax purchase that's roughly $16.00 less than an adult-use sale (before any local taxes, which vary by ordinance).

Arizona Cannabis Tax Notes

16% cannabis excise on adult-use retail + state + local TPT (sales) tax. Medical patients pay only the state/local TPT (no 16% excise).

City Cannabis Tax Rates in Arizona

Cities in Arizona can layer their own cannabis business tax on top of state taxes. Here are the reported rates for major cities — use the tax calculator to model a specific purchase:

City	City Cannabis Tax	Total Effective Rate
Phoenix	2.3%	26.4%
Tucson	2.6%	26.7%
Mesa	2%	26.1%
Chandler	1.5%	25.6%
Scottsdale	1.75%	25.85%

Calculate a Arizona Purchase → Compare with Another State → Arizona Regulations →

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Frequently Asked Questions

What is the cannabis tax rate in Arizona?

The combined effective cannabis tax in Arizona ranges from 22.1% to 24.1% depending on the city. That includes a 16% state cannabis excise tax, 5.6% state sales tax, typical local sales tax, and any city cannabis business tax.

Does Arizona exempt medical cannabis from tax?

Medical patients skip the 16% excise and pay only the state/local transaction privilege (sales) tax. That works out to roughly $16.00 less per $100 pre-tax than an adult-use purchase, before any local taxes.

How much is the state cannabis excise tax in Arizona?

Arizona imposes a 16% state cannabis excise tax on retail purchases. This is collected in addition to state sales tax and any local cannabis business taxes.

Which agency administers cannabis tax in Arizona?

Cannabis tax in Arizona is administered by the Arizona Department of Revenue. Licensed retailers file returns and remit taxes on a regular schedule.

For informational purposes only. Not legal, tax, or financial advice. Arizona cannabis tax rates change — always verify with the Arizona Department of Revenue and consult a licensed tax professional. Read full disclaimer