Report: Arizona’s Tax System Draws Many New Residents

By Zachery Schmidt

About every 14 minutes, it happens.

Someone moves to Arizona.

That’s according to a new report in which Arizona ranked among the top states where people are moving to in 2025, according to a new report. It gives credit for Arizona’s popularity to its tax system.

The National Taxpayers Union Foundation recently released the report, which showed how often people migrated in and out of states.

The report found Arizona ranked seventh, with a person moving to the state every 14 minutes and 19 seconds.

And residents moving into Arizona this year will contribute an estimated $607 million in additional revenue, according to Andrew Wilford, the foundation’s interstate commerce initiative director.

“Arizona is doing a good job crafting a tax system that makes [it] more appealing than a lot of neighboring states,” Wilford told The Center Square.

Wilford noted the state’s 2.5% flat tax rate is a “big factor” for people moving to the area.

Of the new residents moving to Arizona, 86% are from California, Wilford estimated.

According to Wilford, people from Washington, Illinois, Nevada and Oregon are also moving to Arizona. The state ranks higher than neighboring states in the foundation’s list of popular states for new residents.

Utah and Nevada ranked within the top 25, with more people moving to those states than leaving.

However, California, New Mexico and Colorado saw more people leaving than arriving.

California ranked the worst in the country, with someone moving away from the state every 1 minute and 44 seconds.

Because of those departures, the Golden State is going to lose around $4.5 billion in revenue this year, Wilford said.

A common trend from the report showed that blue states were losing people to red states.

In addition to California, Wilford said the states that lost the most people were New York, Illinois, Massachusetts and New Jersey.

All these states heavily tax their residents and treat them “like cash cows,” he noted.

At the top of the list, Wilford said the states that gained the most residents were Florida, Texas, North Carolina, South Carolina and Tennessee.

These states “don’t treat their residents” as “endless sources of revenue,” he said.

Wilford said taxes are the top factor in where people want to live, along with cost of living, housing availability and job market.

A state’s tax structure affects its cost of living, housing availability and job market, he added.

Besides blue states losing people to red states, the report also showed that red states were losing residents to other red states.

Wilford said there is “tax competition” between red states as well.

To illustrate, Ohio and Indiana border each other. Ohio is ranked 36th with a person leaving the state every 1 hour, 27 minutes and 35 seconds. In Indiana, the state ranked 19th with someone relocating to the state every 1 hour, 22 minutes and 36 seconds.

An Ohio resident may see Indiana as having a better “tax structure than Ohio, so that person decides to move,” Wilford noted.

Ohio has a corporate tax structure that tends to drive businesses out of the state, he added.

“It’s not as simple as if you’re a Republican state, you get a ton of residents. It still matters how you craft your taxes,” Wilford explained.