I live in Texas where there is no State tax. I sold a home in Arizona for a profit. I lived in that home for two of the past five years.
If you are able to exclude the gain on the sale of this home as the sale of your principal residence on your federal return, to the extent the gain is excluded from federal adjusted gross income, it will likewise be excluded from Arizona gross income and not subject to Arizona income tax. However, to the extent the gain is included in federal adjusted gross income; it will likewise be included in Arizona gross income and subject to Arizona income tax. See this link: https://www.azdor.gov/about/faqs/movingtoaz.aspx
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