A municipal rental tax in Arizona will become illegal on Jan. 1, but there is some concern about what will qualify under the legislation.
Arizona Senate President Warren Petersen tweeted earlier this week that the state Department of Revenue might not be taxing people on an apartment or home itself; however, they still could be collecting rental tax on other things.
“I just learned that the AZ Dept of Rev thinks they can still tax renters for things like their parking spaces and garages,” Petersen stated. “Not only is this a cavalier interpretation of the law, but they did not follow the appropriate process to make this change. We will take action to protect AZ citizens.”
The rental tax was cut as part of a deal made between legislative Republicans and Democratic Gov. Katie Hobbs, who signed the bill in 2023 in order to extend Prop 400, a half-cent transportation sales tax.
