Starting on January 1st, a municipal rental tax in Arizona will be prohibited. However, there are concerns about the criteria that will be considered under the new legislation.
Arizona Senate President Warren Petersen recently took to Twitter to address the issue of taxation on apartments and homes. He clarified that while the state Department of Revenue may not be taxing individuals on the properties themselves, there may still be a collection of rental tax on other related aspects.
“I’ve just discovered that the AZ Department of Revenue believes that they can continue to impose taxes on renters for amenities like parking spaces and garages,” Petersen expressed. “Not only is this an audacious interpretation of the law, but they also neglected to follow the necessary procedures to implement this change. We will take necessary measures to safeguard the rights of Arizona citizens.”
The Department of Revenue did not respond to The Center Square in time for publication.
In 2023, legislative Republicans and Democratic Gov. Katie Hobbs reached a deal to extend Prop 400, a half-cent transportation sales tax. As part of this agreement, the rental tax was reduced, and Gov. Hobbs signed the bill into law.
“In 2023, she expressed how we were able to set aside politics and collaborate across party lines to accomplish significant tasks for Arizona,” she stated proudly.
According to The Center Square, Petersen is also bringing forth legislation this session that would mandate a 2/3 majority vote by a city or town council, or a board of supervisors, in order to approve a new tax.
“Even though we have made permanent budget cuts to agencies, the federal and local government has been spending and taxing excessively. Despite our efforts to increase state-shared revenues to the cities, they continue to raise taxes!” expressed the Republican.