Rental Sales Tax in Arizona

[Dick Rosen]

I'm looking for some feedback from rental property owners as well as property managers, specifically in Arizona. As you all know most cities in Maricopa County and some in Pinal County have a rental sales tax. I'd been managing my own rentals in MN for several years where they don't have any such tax, then I moved to AZ, I started managing rentals for others and plan to launch my own PM business as a broker at first of new year. I'm putting together all of the tasks and procedures that need to be systematized so I can easily train people to help me. As well as keep myself in line.

What is your process for rental sales tax? Say you just purchased a property or just took over management (either way it has to be addressed) what steps do you take to make sure your in compliance with the taxing authorities? And then what steps do you take to get them paid?

[Dan Schwartz]

Is this seriously that hard for out of staters? The license takes 5 minutes to fill out for the city, and they send you a renewal every December. There's no new application, just a renewal fee. Or at least that's been my experience.

The tax return takes less than 10 minutes to fill out. In Phoenix, they require the return monthly, but you can ask to switch to quarterly based on the amount of tax you will pay. I think under $5,000 per annum tax (which is $250,000 in gross rent) will permit you to move to quarterly. Tempe is quarterly by default. I don't know about other Valley cities.

Yes, it's weird, but hardly a huge burden. And pro tip: renters are used to paying the tax on top of their rent. Write your agreement for rent + tax and you will still get the rent you want.