Phoenix voters approved proposition 104 in the August 25, 2015 city election to fund a comprehensive Transportation Plan. This plan will remain and expand light rail and bus routes, improve city streets, and provide residents with more transportation choices.
WHAT IS THE CITY TAX RATE? The City’s tax rate is 2.3% starting January 1, 2016 (was 2.0%); there is no State or County tax on residential rental.
WHO MUST PAY THE TAX? You must be licensed and pay tax if you are in the business of leasing, licensing or renting residential real property located within the city of Phoenix. Examples of residential rentals include houses, apartments, single family homes, condominiums, townhomes, manufactured homes, and mobile home (trailer) spaces. Rentals for less than 31 days are taxable under the Hotel classification.
WHEN IS TAX DUE? Your tax return and payment are due on the 20th day of the month following the reporting period.
WHO IS TAXABLE? A person who has three or more residential units rented or available for rent in the State of Arizona must pay tax to the city of Phoenix on the units located within the City. A property manager or broker who manages residential rental units must pay tax to the city of Phoenix on the units located within the city of Phoenix even if an individual owner would not be taxable. In this case, the property manager or broker may obtain the license and report the tax on the residential rental income for a property owner. Examples of residential rentals include houses, apartments, single family homes, condominiums, townhomes, manufactured homes, and mobile home (trailer) spaces. Any person or property manager who has one unit of commercial property rented or available for rent plus one or more units of residential property available for rent in the State of Arizona must pay tax to the city of Phoenix on all units located within the city of Phoenix.
WHAT IS TAXABLE? All amounts paid by the tenant under terms of the lease agreement are gross income to the lessor. All amounts paid by the tenant to the lessor or paid on the lessor’s behalf are gross income including property tax (paid to the lessor or the County), mortgage, repairs, pet fees, non-refundable deposits, forfeited deposits, and recoveries due to court action.
For more information, call (602) 262- 6785, press 4, TTY (602) 534-5500 or write to City of Phoenix, TAX DIVISION, 251 W. Washington Street, 3rd Floor, Phoenix, Arizona 85003. Or email to tax@phoenix.gov.
