All amounts paid by the renter to, or on behalf of, the owner are taxable. In addition to rent, taxable income includes payments by the tenant for: pet fees, telecommunication (cable, TV, phone, internet), non-refundable deposits, forfeited deposits, utilities, pool service or landscape maintenance, homeowner association fees, late fees, court fees and legal fees, repair and/or improvements, property taxes, mortgages or home equity loans.
The city’s privilege tax rate is 2 percent.
The property would not be subject to tax if the property is occupied by a family member that does NOT pay rent, does NOT make payments on behalf of the owner (mortgage, property tax, maintenance, etc.), or does NOT sub-lease any part of the property.
The city of Buckeye is in the state’s collection system. Owners of residential property rental units are required to apply to the state for a transaction privilege tax license on Arizona's joint application form. This joint application is available at www.azdor.gov.
Yes. Even if you had zero rental income, you are still required to file a tax return. On the return you will indicate no activity for the reporting period.
The city of Buckeye is in the state’s collection system. Owners of residential rental properties are required to report their rental income and remit the tax to the state on the Arizona privilege (sales) tax return. Tax return forms will be mailed to you by the State and are due by the 20th of the month following the end of the reporting period. The state then remits the tax to the city.
My property is managed by a property management company. Can the company obtain my TPT license and file my returns?
No,the property owner has to obtain a TPT licensef rom the Arizona Department of Revenue. The property manager may file and pay the TPT on your behalf, but the property owner must file a General Disclosure/Representation Authorization Form (aka Power of Attorney, Arizona Form 285) with the Arizona Department of Revenue.
Many leases contain a clause that states the tenant may be charged any applicable taxes due. We recommend that you review your current lease document and, if necessary, seek appropriate legal advice. If you want to include tax in your current rent (no separate charge for tax), you may calculate a factored tax amount and deduct this amount on your tax return. Please see the examples listed below.
If you include tax in your rent (No separate charge for tax), you may compute the amount of tax included in your gross income for deduction purposes in the following manner: Example: $1,000.00 ÷ 1.02= $980.39; $1,000.00 -$980.39= $19.61 factored tax deduction.
The following may be taken as a deduction on your tax return when they are included in the gross income. Deductions include City tax collected or factored; bad debts on which tax was paid on the previous return; refundable security deposits, unless they are retained; utility charges only if individual utility meters have been installed and each tenant pays the exact amount billed by the utility company; and room charges to patients of qualifying health care organizations.
The following expenses paid by the owner or tenant are not allowable deductions: payments for repairs, pool service, landscape maintenance or other service labor, and homeowner association fees.
The City’s privilege tax is computed on your gross receipts. “Making a profit” and “expenses” are applicable to income tax, but not to Transaction Privilege Tax. Expenses are a cost of doing business and are not deductible in most cases. The tax is imposed on gross receipts less specifically allowed deductions and exemptions.
According to Arizona Revised Statute Title 33, Chapter 17 Article 1, owners are required to register rental properties with the Maricopa County Assessor. The property owner must furnish their name, address and telephone number. Additionally, an owner of residential rental property who lives outside Arizona must designate an agent who lives in Arizona that can accept legal service on behalf of the property owner. Please refer to the Arizona Revised Statutes for more details. Registration may be completed on-line, or forms may be downloaded from the Maricopa County Assessor’s website.