No Rental Tax Legislation

Gov. Katie Hobbs recently signed legislation to eliminate the right of cities and towns to impose a local sales tax on residential rentals. While not all communities have such a levy — Tucson and Phoenix, for example, do not — 75 of the 91 cities in the state do at rates ranging from 1% to 4%.

The move is an about-face for Hobbs, who in February vetoed a nearly identical measure.

On Arizona Horizon today, we talked to Tom Belshe with the Arizona League of Cities and Towns to find out more.

The governor has previously said that lowering costs for families was a priority of her administration.”But she said there is no “enforceable mechanism” to ensure that landlords, who actually remit the tax to cities and towns, actually would pass along the savings to their tenants. He can only speak to what the legislation will cost them in terms of lost revenue and how they plan to make up for it. He cannot speak to the behind the scenes negotiation as the League of Cities and Towns was left out of it.