If you carry a 100% total and permanent VA disability rating and live in Arizona, the state layers several benefits on top of your federal VA compensation: a property tax exemption on your primary residence, a full waiver of vehicle license tax and registration fees on one vehicle, a state income tax exclusion covering both VA disability pay and military retired pay, a complimentary hunting and fishing license, and a free state parks day-use pass. The benefits for 100% disabled veterans in Arizona require residency and VA documentation of the rating, and each program has its own application path.
Federal VA disability compensation currently pays $3,938.58 per month for a single veteran at the 100% rating.1Veterans Affairs. Current Veterans Disability Compensation Rates Everything below is what Arizona adds.
Property Tax Exemption on Your Home
Under the Arizona Constitution (Article 9, Section 2) and A.R.S. § 42-11111, a veteran with a 100% service-connected disability can reduce the assessed value of a primary residence by up to $4,873 for tax year 2026.2Arizona Legislature. Arizona Code 42-11111 – Exemption for Property; Widows and Widowers; Persons With a Total and Permanent Disability; Veterans With a Disability; Definitions The actual dollar savings depend on your county’s tax rate. A rating below 100% gets a proportional share of the exemption.
There is an income test. Total household income for the previous calendar year cannot exceed $39,865 if no children under 18 live with you, or $47,826 if they do. VA disability compensation, Social Security, and Railroad Retirement do not count toward that cap.3Cochise County Assessor. Individual / Organization Exemptions For many 100% disabled veterans whose main income is VA pay, the cap is easier to clear than it looks.
File with the County Assessor where the property sits. The window runs from the first Monday in January through March 1 each year, and missing it usually costs you the exemption for that entire tax year.4Arizona Department of Revenue. Property Tax FAQs Bring your VA Summary of Benefits letter and documentation of household income, such as last year’s tax return or Social Security benefit statements. You may need to re-verify income in later years to keep the exemption active.
Vehicle License Tax and Registration Waiver
A.R.S. § 28-5802 waives both the Vehicle License Tax and registration fees for one personally owned vehicle belonging to a veteran the VA has certified as 100% disabled and drawing compensation on that basis.5Arizona Legislature. Arizona Revised Statutes 28-5802 – Vehicle License Tax Exemption; Veterans Because the Vehicle License Tax is based on a vehicle’s original MSRP and drops as the car depreciates, the waiver saves several hundred dollars a year on a newer vehicle.
The waiver covers one vehicle at a time. If you replace it, the exemption follows to the replacement. A surviving spouse can continue the registration under the same terms until remarrying or dying.5Arizona Legislature. Arizona Revised Statutes 28-5802 – Vehicle License Tax Exemption; Veterans Take your VA certification letter showing the 100% rating to a Motor Vehicle Division office or an authorized third-party provider. It can be processed at initial registration or during annual renewal.
Arizona Income Tax Exclusions
VA disability compensation is fully exempt from Arizona state income tax, matching the federal treatment. Military retired pay is also fully exempt from Arizona income tax starting with tax year 2021.6Arizona Department of Revenue. Military Tax Filing
For a 100% disabled veteran who is also a military retiree, that combination means neither income stream produces Arizona tax liability. Exclude both amounts when filing your state return. Grants for specially adapted housing and adapted vehicles are also nontaxable.
Free Hunting and Fishing License
Under A.R.S. § 17-336, a veteran receiving VA compensation for a permanent 100% service-connected disability qualifies for a complimentary hunting and fishing license from the Arizona Game and Fish Department, covering both activities under normal state regulations and seasons.7Arizona Revised Statutes. Arizona Code 17-336 – Complimentary and Honorary Youth Licenses
The residency rule here is stricter than for other Arizona veteran benefits. You must have been an Arizona resident for at least one full year immediately before applying.7Arizona Revised Statutes. Arizona Code 17-336 – Complimentary and Honorary Youth Licenses Apply in person at an Arizona Game and Fish Department office with a valid Arizona driver’s license and your VA award letter.
Free State Parks Day-Use Pass
Arizona State Parks issues a free day-use pass to veterans with a 100% service-connected disability. It covers the veteran plus up to three accompanying adults at any state park.8Arizona State Parks. Arizona State Parks Fee Schedule – Section: Veterans Discount Program Pick it up at a staffed park visitor center with your VA certification of 100% service-connected disability.
The pass is for day entry only. It does not cover overnight camping, cabin rentals, cave tours at Kartchner Caverns, mansion tours at Riordan, special events, reservation fees, or overnight parking.8Arizona State Parks. Arizona State Parks Fee Schedule – Section: Veterans Discount Program For federal lands, a separate Military Lifetime Pass provides free entry to National Park Service, Bureau of Land Management, U.S. Forest Service, and other federal sites, available at any national park entrance station or through Recreation.gov.9National Park Service. Free Entrance to National Parks for Current Military, Veterans, and Gold Star Families
Concurrent Receipt if You’re Also a Military Retiree
A military retiree with a VA disability rating of 50% or higher can collect full military retired pay and full VA disability compensation at the same time. The old dollar-for-dollar offset was fully phased out as of January 2014, and enrollment is automatic once DFAS has confirmation of the VA rating.10DFAS. Concurrent Military Retired Pay and VA Disability Compensation Combined with the Arizona income tax exclusions above, both payments arrive with no state tax taken out.
Federal Grants Worth Knowing About
Two federal grant programs can pair with the Arizona benefits, though eligibility is narrower than the 100% rating alone.
Specially Adapted Housing Grant
The VA’s Specially Adapted Housing (SAH) grant pays up to $126,526 in fiscal year 2026 toward buying, building, or modifying a home to accommodate a qualifying disability, and can be used up to six times over a lifetime. Qualifying conditions include the loss or loss of use of more than one limb, blindness in both eyes, certain severe burns, and other specific physical disabilities.11Veterans Affairs. Disability Housing Grants for Veterans Not every 100% disabled veteran qualifies; the disability must specifically affect mobility, vision, or involve severe burns.
Automobile Allowance
A veteran with a service-connected disability that prevents driving may qualify for a one-time automobile allowance of up to $27,074.99 toward a specially equipped vehicle, paid directly to the seller.12Veterans Affairs. Current Special Benefit Allowance Rates Stacked with Arizona’s vehicle license tax waiver, this cuts both the upfront and ongoing cost of vehicle ownership.
A Note on Education Benefits for Dependents
Arizona’s tuition waiver statute, A.R.S. § 15-1808, covers spouses and children of service members killed in the line of duty, and Purple Heart recipients with a VA disability rating of 50% or higher. It does not extend tuition waivers to dependents of a living veteran based solely on a 100% disability rating.13Arizona Legislature. Arizona Revised Statutes 15-1808 – Tuition Waiver Scholarships; Eligibility; Definitions A veteran who received a Purple Heart and carries a 50%-or-greater rating qualifies personally under the same statute, usable at any Arizona public university or community college.
For dependents of 100% disabled veterans, the education route is the federal Survivors’ and Dependents’ Educational Assistance program (Chapter 35 DEA), which pays a monthly stipend to the student and can also fund on-the-job training, apprenticeships, and licensing exam fees.14Veterans Affairs. Chapter 35 Rates for Survivors and Dependents The Veterans Services office at any Arizona college or university can help coordinate Chapter 35 with enrollment.