Rental tax is assessed by the City the property is located in and there is NOT a State rental tax. Each city OR the County have taxes for areas within their jurisdiction. The City of Phoenix says you do not pay unless you own more than three residential rental properties ---OR just one commercial unit. Glendale requires both an annual licensing fee ($50) and taxes on each unit beginning with one. The State may be the collecting entity for some of the smaller cities but the tax requirement is listed in the City codes (not state).
As others have stated, the property must be registered in the County as a rental property. When you purchased it, that should have been taken care of at Title. If not, you will need to get that addressed first. You can go online or call the different cities to verify the 'privileged tax' amount for rentals and what registration fees for each city (if required). Your accountant/CPA should be able to pull this data for you as well. IF you are using a property manager, this should be included in their services to you as well.
First, You must register the property with the County Assessorâ€™s office as a rental property. Failure to do so could result in a daily fine of up to $150.00. Information and forms are available at:
Here is what Surprise says in their website about the exemption at:http://www.surpriseaz.gov/FAQ.aspx?QID=35&PREVIEW=YES:
"Exemption: If you have less than 2 residential rentals within the State and no commercial rentals, you are not deemed to be in the rental business, and are therefore exempt from the tax. However, if your rental property is rented through a broker or property manager then each property is taxable even if you have less than three properties, and is remitted by the broker or property manager."
If you own less than three residential rental properties in the state of Arizona you are exempt from paying the rental sales tax in both cities. You mus first register with the county and pay their registration fee for each property and property tax at the landlord rate. "Privilege tax" (rental tax) like Tolleson are collected by the State. Phoenix collects for themselves. Either way we would advise you to get in contact with your accountant or local tax expert. I you or anyone you know needs a realtor please think of us.
Lori Hicks & Toni D'Avello
If you own less than three residential rental properties in the state of Arizona, then you are exempt from paying the rental sales tax in both cities. If you own one commercial property, then you loss this exemption. If you have more than three rentals, then you will need to get a license for both rental properties in both cities. In Phoenix, you can register the rental online here:
The city of Tolleson, you will need to call the fiance department to get an application for a sales tax license.
My company does property management and we can handle the sale taxes on your rentals so that you can concentrate on more important things. Our property management fees are affordable and you just collect a check each month. Please give me a call if you would like to learn more about our services.
Sean Heideman, Broker
First, you must register with the county and pay their registration fee for each property and property tax at the landlord rate.
Second, some city's "Privilege tax" (rental tax) like Tolleson are collected by the State. Other Cities like Phoenix do their own collection. You can get specifics at the above link for the different Cities.
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