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TITLE: municipal TPT; residential rentals; limit |
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SPONSOR: Chávez |
STATUS: As Introduced |
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PREPARED BY: Hans Olofsson |
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Description
The bill, as introduced, would limit any new or increased tax rate levied by a city or town on residential property rentals to 5%. Under current law, a city or town is not allowed to impose or increase such tax rate unless approved by qualified electors in a municipal election. This provision would remain unchanged under HB 2348.
Estimated Impact
This bill would have no fiscal impact on the General Fund since the state does not levy a tax on residential rentals. In addition, since the bill would not affect existing tax rates levied by municipalities on residential property rentals, there would be no immediate revenue impact on the cities and towns currently levying such tax. However, since the bill would limit the imposition of new or increased taxes on residential property rentals, cities and towns could incur a loss of foregone revenues in future years.
Analysis
As noted above, the bill would limit any new or increased tax rate on residential rentals levied by a city or town to no more than 5%. The (unweighted) average tax rate of the 74 incorporated cities and towns that currently levy a tax on residential property rentals is 1.95%. Seventeen of the state's 91 incorporated cities and towns do not levy a tax on residential rentals. Two cities - Fredonia and San Luis – levy a tax rate on residential rentals of 4.0%, the highest such tax rate in the state. Table 1 on the following page lists the current tax rate on residential property rentals by city.
As noted above, the bill would not affect current municipal tax collections on residential rentals. The extent to which it would affect future tax collections owing to the bill's tax rate limit cannot be determined in advance as it would depend on future actions by individual cities and towns.
Local Government Impact
For a discussion on the local government impact, see the Analysis section above.
1/28/20
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Table 1 |
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CITY/TOWN |
RESIDENTIAL RENTAL TAX RATE (Business Code 045) |
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APACHE JUNCTION |
2.20% |
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AVONDALE |
2.50% |
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BENSON |
2.50% |
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BISBEE |
3.50% |
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BUCKEYE |
2.00% |
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BULLHEAD CITY |
0.00% |
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CAMP VERDE |
2.00% |
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CAREFREE |
3.00% |
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CASA GRANDE |
1.80% |
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CAVE CREEK |
3.00% |
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CHANDLER |
1.50% |
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CHINO VALLEY |
3.00% |
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CLARKDALE |
3.00% |
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CLIFTON |
3.00% |
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COLORADO CITY |
2.00% |
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COOLIDGE |
3.00% |
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COTTONWOOD |
3.00% |
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DEWEY-HUMBOLDT |
2.00% |
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DOUGLAS |
2.80% |
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DUNCAN |
2.00% |
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EAGAR |
3.00% |
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EL MIRAGE |
3.00% |
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ELOY |
3.00% |
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FLAGSTAFF |
0.00% |
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FLORENCE |
2.00% |
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FOUNTAIN HILLS |
1.60% |
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FREDONIA |
4.00% |
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GILA BEND |
3.00% |
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GILBERT |
1.50% |
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GLENDALE |
2.20% |
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GLOBE |
0.00% |
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GOODYEAR |
2.50% |
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GUADALUPE |
3.00% |
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HAYDEN |
3.00% |
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HOLBROOK |
3.00% |
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HUACHUCA CITY |
1.00% |
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JEROME |
3.50% |
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KEARNY |
2.50% |
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KINGMAN |
2.00% |
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LAKE HAVASU CITY |
0.00% |
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LITCHFIELD PARK |
2.80% |
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MAMMOTH |
2.00% |
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MARANA |
0.00% |
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MARICOPA |
2.00% |
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MESA |
2.00% |
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MIAMI |
2.50% |
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NOGALES |
2.00% |
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ORO VALLEY |
0.00% |
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PAGE |
3.00% |
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PARADISE VALLEY |
1.65% |
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PARKER |
2.00% |
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PATAGONIA |
3.00% |
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PAYSON |
0.00% |
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PEORIA |
1.80% |
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PHOENIX |
2.30% |
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PIMA |
2.00% |
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PINETOP-LAKESIDE |
3.00% |
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PRESCOTT |
2.75% |
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PRESCOTT VALLEY |
0.00% |
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QUARTZSITE |
0.00% |
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QUEEN CREEK |
2.25% |
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SAFFORD |
0.00% |
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SAHUARITA |
2.00% |
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SAN LUIS |
4.00% |
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SCOTTSDALE |
1.75% |
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SEDONA |
0.00% |
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SHOW LOW |
0.00% |
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SIERRA VISTA |
1.00% |
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SNOWFLAKE |
0.00% |
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SOMERTON |
3.30% |
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SOUTH TUCSON |
2.50% |
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SPRINGERVILLE |
3.00% |
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ST JOHNS |
2.00% |
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STAR VALLEY |
2.00% |
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SUPERIOR |
2.00% |
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SURPRISE |
2.20% |
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TAYLOR |
2.00% |
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TEMPE |
1.80% |
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THATCHER |
2.00% |
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TOLLESON |
2.50% |
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TOMBSTONE |
2.50% |
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TUCSON |
0.00% |
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TUSAYAN |
0.00% |
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WELLTON |
2.50% |
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WICKENBURG |
1.70% |
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WILLCOX |
0.00% |
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WILLIAMS |
3.00% |
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WINKELMAN |
3.50% |
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WINSLOW |
0.00% |
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YOUNGTOWN |
2.00% |
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YUMA |
1.70% |