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

State Senator Steve Kaiser (R-Phoenix) is looking to ease the financial pain many renters are facing. He introduced SB 1184, which would eliminate the rent tax.
Published: Jan. 24, 2023 at 6:03 PM MST
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PHOENIX (3TV/CBS 5) -- Jose and Kayla Amaya are like a lot of Arizonans, struggling to pay their bills and pay the rent. “When rent goes up, it is very hard to pay the bills because it leaves less money for groceries, for gas, and other bills we have to pay for,” said Kayla. The average 2-bedroom apartment in Phoenix costs $1,615 a month, according to Rent.com. That’s up from $1,522 a month back in October.

State Senator Steve Kaiser (R-Phoenix) is looking to ease the financial pain many renters are facing. He introduced SB 1184, which would eliminate the tax tenants pay on rent every month. Kaiser said there are renters in 70 Arizona cities and towns paying anywhere between $50 to $200 dollars 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 need to remember, it’s not just the rent that gets taxed, it’s rent and all the fees that apartments put on top of that, then you get taxed on top of that,” Kaiser said. “It would absolutely help folks that are struggling economically dealing with high inflation. $50-200 a month is a big deal for families that are on the edge right now.”

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

The proposal to get rid of taxes on rent comes as lawmakers are also considering getting rid of taxes on groceries with SB 1063.