"If person living in Arizona had taxes prepared in Kansas, because of income received from Kansas. Would the inheritance tax be imposed on all other income not matter where it came from when inherited, because of the location of the tax prep." is your original question.
Since the decedent was living in Arizona, and had nonresident
Kansas income, I suspect the decedent has Arizona residence, and Arizona estate law likely applies, even if the property is Kansas sited.
Your step up basis question is valid. Without an estate tax, assets get the opportunity for a step up in basis anyway, depending on the size of the estate. Arizona, piggybacking on Federal
estate tax law, effectively repealed their estate tax for years after 2004.
If the estate has assets under $1,300,000, you will still get a step up in basis up to fair market value, even with an Arizona estate.