(The Center Square)— 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 Department of Revenue did not respond to The Center Square in time for publication.
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.
“Today, we showed we can put politics aside and work across party lines to get big things done for Arizona,” she stated in 2023.
The Center Square reported that Petersen is also introducing legislation this session to require a 2/3 majority vote by a city or town council, or a board of supervisors, to approve a new tax.
“Although we’ve reduced state spending with permanent budget cuts to agencies, the federal and local government has been spending and taxing out of control. We even increased state-shared revenues to the cities and they are still raising taxes!” the Republican said.
