Charge tenants monthly sales tax in AZ?

Charge tenants monthly sales tax in AZ?

Gilbert, AZ · Member since 2015 · 6 posts · 1 vote

The first time I rented, a realtor did everything for me.  He charged a 1.5 sales tax against the monthly rent fee.  I did not specify that I would be charging sales tax when I accepted their application and approved them.  I am meeting them in a few days to sign the lease.  Am I required to charge them the sales tax?   Or can I just charge them the rent fee?

Also do I have to write a check to the state for the sales tax, or is this done automatically when I file my taxes?

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  • Contractor · Phoenix, AZ · Member since 2015 · 15 posts · 7 votes
    11y

    Yes, each municipality has it's own tax rate.  And, that fee you pass on to the tenant.  Has not been an issue with tenants I've rented to.

    A CITY sales tax is your responsibility.  Read the filing requirements for each municipality.  Filing can be monthly, and others are quarterly.

  • Investor · Sierra Vista, AZ · Member since 2013 · 168 posts · 126 votes
    11y

    @Art Scott is right on the money. Arizona allows municipalities/cities to impose a rent tax (sales tax?) on rental units. Only a few cities in AZ actually collect a rent tax. Each city sets their own tax rate. In my city (Sierra Vista), the tax rate is 1%. My city only collects it from landlords who have 3 or more SFR rentals in the state or 1 or more multi-family rentals. Sierra Vista also requires the landlord to obtain a business license and a permit to operate a business from home. (I don't think the landlord requires either of these if using a Property Management company.)

    The AZ state legislature is attempting to pass a bill to do away with the rent tax state wide.  But many cities are fighting this because they don't want to admit the cost gets passed on to the tenants.

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