Arizona lawmakers are considering eliminating rent tax, critics warn it could impact city services

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PHOENIX (3TV/CBS 5) — Jose and Kayla Amaya are like many Arizonans, struggling to pay bills and pay rent. When the rent goes up, it’s really hard to pay the bills because it leaves less money for groceries, gas and other bills we have to pay, Kayla said. The average 2-bedroom apartment in Phoenix costs $1,615 per month, according to Rent.com. That’s up from $1,522 per month in October.

State Sen. Steve Kaiser (R-Phoenix) is seeking to ease the financial hardship many tenants face. He introduced SB 1184, which would eliminate the tax tenants pay on rent each month. Kaiser said there were renters in 70 cities and towns in Arizona paying between $50 and $200 in rental tax. Phoenix, Scottsdale, Tempe, Peoria, Glendale, Gilbert and Goodyear are among the cities that currently have a rental tax, while Flagstaff and Tucson do not.

Really, what you have to remember is not just the rent that’s taxed, his rent and all the fees the apartments add on top of that, and then you’re taxed on top of that, Kaiser said. It would absolutely help people who are struggling economically to deal with high inflation. $50-200 a month is a lot for families who are currently on the edge.

Not everyone is convinced that getting rid of rental tax is a good idea. Tom Belshe of the Arizona League of Cities and Towns says the rental tax is an important source of revenue for many communities and removing it could impact important services such as public safety. Cities and towns don’t tax just to tax. They tax to reach a certain dollar amount to cover services citizens expect and are used to getting, Belshe said. You make a change in one place, you will feel it in another.

The proposal to remove taxes on rent comes as lawmakers also consider removing taxes on groceries with SB 1063.

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