• Matthew McCabe

Residential Rental Properties are Subject to Tax in Arizona

The Arizona Department of Revenue considers Residential Rental property to be the rental of real property for a period of 30 or more consecutive days for residential purposes only (not commercial). Residential rental properties are subject to tax called transaction privilege tax (TPT). It is imposed when engaged in business and has a residential rental classification by the Model City Tax Code. However, not all cities require or opt to tax residential rental income.


Individual owners are of the taxable rental properties are required to obtain a TPT license with the Arizona Department of Revenue (ADOR). This is true regardless if the owner employs a property manager or not.


An owner is required to get a license if the city imposes a tax on residential rental activity. A list of cities that require a tax license can be found here.


In addition to the TPT tax licensing requirements, all Arizona counties require residential rental properties to be registered with the County Assessor. There may fines and penalties for failure to register a rental property.


If you do not have employees but have activity as a residential rental an application can be found at https://azdor.gov/forms/tpt-forms/residential-rentals-only-application. If filing after June 1, 2016 a TPT-EZ form may be used and can be found at https://azdor.gov/forms/tpt-forms/residential-rentals-only-application.


AZDOR also provides information about is taxable. A link to this can be found here.