A national research firm has named Fortuna Foothills the ninth-friendliest community for retirees in Arizona when it comes to taxes.
New York-based SmartAsset, a “financial technology company aiming to provide the best personal finance advice on the web,” based the scores for “Most Tax-Friendly Places for Retirees” on five factors: income, sales, property and fuel tax rates, and whether Social Security income is taxable, which it is not in Arizona.
The four types of taxes are weighted by how much they’re expected to impact retirees, with income taxes multiplied by a factor of 4, property by 3, sales by 2 and fuel tax by 1. Exemptions and other factors are taken into account and applied to a hypothetical income of $50,000.
The study ranks both states and the “cities” within each state, including unincorporated areas known as census-designated places along with incorporated municipalities. Fortuna Foothills includes all of the neighborhoods between the city of Yuma and the Gila Mountains, an area known collectively to locals as “the Foothills.”
It’s been known for decades as a place where people of all ages, but especially seniors, move to escape the perceived higher taxes and fees imposed by the surrounding cities.
“That’s why people move out to the county,” said Darren Simmons, Yuma County supervisor for District 3, which includes the Foothills. “They don’t want to pay the city taxes. In the city, you pay for fire and all that other stuff, which in turn raises your taxes,” he said.
Some of those county residents don’t realize they could face steep fines from the Rural/Metro Fire Department after an emergency response if they don’t pay for a subscription first. “Sometimes it’s a Catch-22,” Simmons said.
The study’s results indicate moving to an unincorporated area is a good strategy, at least in Arizona. Of the top 10 communities in the state, only No. 5, Guadalupe in Maricopa County, is a municipality. No. 1 is Williamson, a census-designated place just north of Prescott in Yavapai County.
Overall, SmartAsset calls Arizona a “moderately tax-friendly state,” with lower property tax rates counteracted by sales taxes at the higher end of the spectrum.
Other Arizona-specific factors include the taxation of income from 401(k)s or other types of retirement income, along with a lack of estate or inheritance tax.
Senior citizens who meet certain criteria can qualify for state property tax freezes or deferrals.
Simmons said the Board of Supervisors has worked to keep its property taxes down, keeping the rate for this year the same as before, though higher property values will still result in an increase for many owners.
With more costs being passed down to the county from the state level it’s been difficult to keep the rate level, he said. In order to do that without cutting services, this year the board took taxing capacity from the countywide flood control district and moved it over to the general fund.
“I wish we could drop it more, so we could be higher on the list, but that’s just being kind of greedy, I guess,” Simmons said.
This article provided by NewsEdge.