Peoria to lose millions in ongoing revenue after rental tax repeal
Tax represents 4.1% of all city transaction privilege tax collections
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Rental tax revenues
While not all communities have a levy on residential rentals, 75 of the 91 cities in the state do, at rates ranging from about 1% to 4%. Peoria is on the high end of that, with the residential sales tax representing about 4.1% of all transaction privilege tax collections in the city. Here is a look at the city’s revenues from residential rentals over the last few fiscal years.
The city of Peoria will lose about $5.1 million in sales tax revenue after the state passed a law banning such taxes for rental properties.
Gov. Katie Hobbs on Aug. 2 signed a bill to eliminate the right of municipalities to levy a local sales tax on residential rentals.
This will take away tens of millions of dollars annually in revenue that a majority of the state’s 91 cities and towns collect, according to League of Arizona Cities and Towns.
For Peoria, officials said the loss of $5.1 million in annual ongoing revenue will have an impact on a growing community, as $4.25 million of those revenues are tied to the city’s general fund.
The other $850,000 loss will impact the city’s transportation sales tax fund, leaving fewer dollars to pay for road construction, maintenance and other needs, officials said.
Residential sales tax represents 4.1% of all transaction privilege tax collections in Peoria.
The tax generated about $4.5 million and $3.9 million for the city in fiscal years 2021 and 2020, respectively.
Peoria spokeswoman Diane Arthur said the city has been opposed to the elimination of the TPT for residential rentals, as it is a preemption of local decision making.
That money helps pay for additional or expanded services to meet the needs of growth and to keep up with inflation, she said.
The repeal will be effective in 2025.
“We look forward to working with the governor’s office and the state legislature next session to explore ways to mitigate and offset this revenue loss as soon as possible before the repeal goes into effect,” Arthur said.
Philip Haldiman can be reached at phaldiman@iniusa.org, or on Twitter @philiphaldiman. We’d like to invite our readers to submit their civil comments, pro or con, on this issue. Email AZOpinions@iniusa.org.
Meet Philip Haldiman is an award-winning journalist who most recently took first place for investigative reporting in 2023 from Arizona Newspapers Association. He joined Independent Newsmedia, Inc., USA, in 2015, covering Sun City West his first year. Since 2016, he has covered the city of Peoria. Prior to coming to INI, he was a reporter with The Arizona Republic for seven years, covering numerous cities throughout the Valley. Before that, he was a freelance writer.
Community: Haldiman spearheads the Peoria Independent Hometown Heroes Awards program, honoring local individuals and businesses that give back to the community. He has hosted local candidate forums over the years and is a member of the Society of Professional Journalists. Haldiman also served as a member of the Journalism Program Community Advisory Board at Glendale Community College. Outside journalism, Haldiman served as a member of the city of Peoria Complete Count Committee for the Census, 2019-2020. Lastly, he has served as a member of his HOA governing board since 2021.
Education: Arizona State University with a BA in Journalism and Mass Communications and a BA in Theater.
Random Fact: Haldiman is a fourth-generation Arizonan as well as wrote and produced an autobiographical comic book about his time spent in Hollywood and his life as a cult film star.
Hobbies: He enjoys hiking Arizona’s mountainous landscapes and is currently working on a play for the stage.
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