KJZZ is a service of Rio Salado College,
and Maricopa Community Colleges

Copyright © 2025 KJZZ/Rio Salado College/MCCCD
Play Live Radio
Next Up:
0:00
0:00
0:00 0:00
Available On Air Stations

Why residential rents may go down in some Arizona cities and towns

Sky Schaudt/KJZZ

Landlords across Arizona have been preparing for a significant change in residential leases.

Starting Jan. 1, 2025, state law bans cities and towns from charging sales tax on residential rentals.

The Arizona Multihousing Association, an affiliate of the National Apartment Association, warned its 2,600 members that the tax elimination had been controversial and told landlords they should be charging residents less. Taxes must also be removed from other items, like late fees.

The law allows tenants to sue if taxes are still being collected. About 75 cities and towns have been collecting sales tax ranging from 1% to 4% of residential rents.

The Arizona Department of Revenue defines residential rental as “real property for a period of 30 or more consecutive days for residential (i.e. noncommercial) purposes only.”

Hotels, motels and other lodging businesses must still collect and remit sales taxes under the transient lodging or hotel classification.

More Arizona Housing News

As a senior field correspondent, Christina Estes focuses on stories that impact our economy, your wallet and public policy.