SB 1131
Initials FK Page 1 Government
ARIZONA HOUSE OF REPRESENTATIVES
Fifty-sixth Legislature
First Regular Session
Senate: GOV DPA/SE 4-2-1-0 | 3rd Read 16-14-0-0
SB 1131: property rights; zoning ordinances; costs
S/E: Residential leases; municipal tax exemption
Sponsor: Senator Petersen, LD 14
Committee on Government
Summary of the Strike-Everything Amendment to SB 1131
Overview
Prohibits municipalities and counties from levying municipal tax on the business of renting or
leasing real property for residential purposes (Rentals) effective July 1, 2024.
History
Residential rental is the rental of real property for a period of 30 or more consecutive days for
residential purposes only. Residential rental properties are currently subject to transaction
privilege tax (TPT) and imposed when engaged in business under the residential rental
classification by the Model City Tax Code. Some cities, not all, opt to tax residential rental income
under Section 445 of the Model City Tax Code.
Provisions
1. Prohibits a county, city or town from levying a tax on Rentals. (Sec. 1, 2)
2. Requires a landlord affected by the elimination of TPT in a city or town that levies TPT on
Rentals to no longer charge the tenant the amount of repealed TPT by October 1, 2024, and
repeals this requirement effective January 1, 2027. (Sec. 4, 5)
3. Stipulates the landlord has the burden of proof that a challenged charge assessment or other
amount is not attributable to any portion of a city's or town's TPT on a Rental in any civil action
challenge. (Sec. 4)
4. Stipulates revenues collected from remote sellers must be accounted for separately when
depositing TPT revenues into the GF. (Sec. 6)
5. Requires municipalities to use monies from remote seller revenues for public safety before
any other municipal purpose. (Sec. 6)
6. Prohibits, as of October 1, 2024, a city, town or other taxing jurisdiction from levying a
transaction privilege, sales, gross receipts, use, franchise or other similar tax on Rentals and
repeals the statute that allows that taxation to occur on October 1, 2024. (Sec. 7, 8)
7. Exempts health care facilities, long-term care facilities, hotels or other transient lodging
businesses. (Sec. 7)
8. Stipulates that the tax prohibitions apply regardless of whether the city or town has adopted
the Model City Tax Code. (Sec. 7)
9. Removes the ability for cities or towns to fine or penalize a lessor for not paying TPT on
residential rent. (Sec. 9)
☐ Prop 105 (45 votes) ☐ Prop 108 (40 votes) ☐ Emergency (40 votes) ☒ Fiscal Note SB 1131
Initials FK Page 2 Government
10. As session law, requires the Department of Revenue by June 30, 2024 to electronically notify
each residential rental TPT licensee that a city, town or other taxing jurisdiction will no longer
levy TPT on Rentals after October 1, 2024 and outlines specifications for the notice. (Sec. 10)
11. Contains a legislative intent clause. (Sec. 11)
12. Stipulates this act applies to taxable periods beginning October 1, 2024. (Sec 12.)
13. Contains an effective date of July 1, 2024. (Sec. 13)
14. Makes technical and conforming changes. (Sec. 1, 2, 3, 6, 7, 9)