State veteran benefits · AZ
Arizona Veteran Benefits
Starting with tax years beginning January 1, 2026, Arizona fully exempts the primary residence of a veteran with a 100 percent service-connected disability from property tax, and the surviving spouse keeps the exemption until remarriage.
By Mario Bailey, U.S. Air Force veteran · current Air National Guard member. Data updated 2026-07-10.
What Arizona adds, benefit by benefit
Your federal VA benefits travel with you to any state. Everything below is the second stack: what Arizona itself offers, each item checked against the state's own official source on the date shown.
Property tax relief
For tax years beginning on or after January 1, 2026, a veteran with a 100 percent service-connected VA rating gets a full property tax exemption on the primary residence under A.R.S. 42-11111(C), with a continued full exemption for a surviving spouse who does not remarry. Veterans rated below 100 percent, and those with nonservice-connected disabilities, get a dollar exemption prorated to their VA percentage.
The assessed-value cap was eliminated for the veteran exemptions, but a household income limitation still applies to all individual exemptions under A.R.S. 42-11111. New applications go to the county assessor between the first Monday in January and March 1; veterans already granted an exemption before 2026 do not need to reapply to get the new treatment. Voters restored these exemptions through Proposition 130 in 2022.
SOURCE: Arizona Department of Revenue · retrieved 2026-07-10
State income tax
Arizona lets residents subtract 100 percent of benefits, annuities, and pensions received as retired or retainer pay of the uniformed services, for tax year 2021 and forward. Active duty pay and National Guard reservist pay are not taxed either.
VA disability compensation is excluded from federal adjusted gross income, so it never enters the Arizona return in the first place.
SOURCE: Arizona Department of Revenue · retrieved 2026-07-10
Tuition waiver scholarships
A.R.S. 15-1808 grants tuition waiver scholarships at Arizona universities and community colleges to Purple Heart recipients with a VA disability rating of 50 percent or more who were Arizona residents or stationed in Arizona, and to the child or spouse of a service member, National Guard member, or first responder killed in the line of duty.
Waivers cover up to 64 credit hours at community colleges and up to a bachelor's degree worth of credits at the universities; children must be 30 or younger and spouses unremarried. Books and fees are not covered.
SOURCE: Arizona State Legislature · retrieved 2026-07-10
State hiring preference
On merit system employment examinations, Arizona gives veterans a 5-point preference and honorably separated veterans with a service-connected disability a 10-point preference, added only after the applicant earns a passing grade on their own.
SOURCE: Arizona State Legislature · retrieved 2026-07-10
Vehicle license tax exemption
A veteran certified by VA as 100 percent disabled and drawing compensation on that basis pays no Arizona vehicle license tax or registration fee, and the exemption continues for a surviving spouse until remarriage.
Claim it at any MVD or authorized third-party office with a VA eligibility letter or a uniformed services ID showing the 100 percent disabled veteran affiliation.
SOURCE: Arizona Department of Transportation, Motor Vehicle Division · retrieved 2026-07-10
Arizona just changed its own headline. For years the state offered only a small prorated exemption with an assessed-value ceiling, a leftover the courts had gutted before Proposition 130 stitched it back together in 2022. The 2025 and 2026 legislative updates finished the job: from the 2026 tax year, a 100 percent service-connected rating means the primary residence comes fully off the tax roll, not a few thousand dollars of assessed value. If you looked at Arizona’s benefit two years ago and dismissed it, look again; the current rules are a different animal.
The fine print deserves respect. The household income limitation survived the rewrite and applies across the individual exemptions, so a 100 percent veteran household with substantial other income should confirm the numbers with the county assessor before assuming a zero bill. The application window is narrow, first Monday of January through March 1, though veterans already on the rolls before 2026 were carried into the new treatment automatically. And the surviving spouse continuation attaches to the property, so selling the exempted house ends it.
Who wins biggest here: a 100 percent P&T retiree who owns a home. That veteran keeps the full pension because Arizona subtracts 100 percent of uniformed services retired pay, keeps all VA compensation, which is never taxed by anyone, as explained in is VA disability taxable, pays no property tax on the house, and registers a vehicle for free. A 60 percent renter, by contrast, mostly gets the income tax subtraction and should weigh that against neighboring states.
Two things veterans commonly miss. First, the partial exemption for ratings under 100 percent is prorated by percentage and quietly useful; a 70 percent veteran should still file with the assessor rather than assume the program is only for 100s. Second, Arizona’s tuition waiver is targeted, not universal: Purple Heart plus a 50 percent rating, or a family member of someone killed in the line of duty. Everyone else should build the school plan on Chapter 33, and the Post-9/11 GI Bill guide covers how a state waiver interacts with it when both apply. State exam points, meanwhile, are separate from the federal system described in veterans’ preference for federal jobs, and you can sanity-check the rating your benefits key off against the VA disability pay tables.
Where to apply
State benefits are administered by the state, not by VA, so the applications above run through Arizona Department of Veterans' Services or the specific agency named in each source link. A free VA-accredited representative or VSO in Arizona will know both stacks, the federal claim and the state paperwork, and charges nothing to help with either.