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Hobbs signs bill repealing house, apartment rental taxes starting in 2025

Democratic Gov. Katie Hobbs has signed a bill into law Tuesday that will repeal taxes on home and apartment rentals in Arizona.

The bill has been a key issue for GOP lawmakers for the last two sessions. 

State House Speaker Ben Toma said Hobbs agreed to sign the rental bill as a part of negotiations  to approve an extension of Proposition 400

Earlier this year, Hobbs vetoed a different version of the bill, saying there was no enforcement mechanism to ensure landlords would pass the tax savings on to tenants.

Queen Creek Republican, Freedom Caucus Chair and state Sen. Jake Hoffman touted Gov. Hobbs’ signing of a law that eliminates local sales taxes on residential rentals by cities and towns. 

“The budget is a perfect example, that when she [Gov. Hobbs] puts down her partisan agenda, and joins legislative Republicans to do the work of the people, and to put their best interests first, everyone wins,” said Hoffman. 

Lawmakers claim this version has better tenant protections. It is set to go into effect in 2025. 

The measure could take away more than $230 million a year in revenue to towns and cities, according to a lobbyist for the League of Arizona Cities and Towns.

Seventy-five of the 91 cities in the state currently impose residential rental taxes between 1%-4 %. 

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Greg Hahne started as a news intern at KJZZ in 2020 and returned as a field correspondent in 2021. He learned his love for radio by joining Arizona State University's Blaze Radio, where he worked on the production team.