Attention Taxpayer!
As part of an on-going program to diversify the Town of Fountain Hills' revenue base for capital project funding and help reduce a five-year $8 million projected deficit, mainly for street repairs, the Town Council has adopted a sales tax on advertising and residential rentals with an effective date of April 1, 2004.
Advertising
Effective April 1, 2004 the tax rate on advertising was changed from 0% to 2.6%. Section 8A-405(a) of the Fountain Hills Tax Code was amended on January 15, 2004 with the approval of Ordinance 04-02. The ordinance applies to gross income from the business activity of "local advertising" defined as "delivery or disseminating of information directly to the public" by billboards, direct mail flyer, phone books or other publication that is distributed to TFH businesses or residents.
Residential Rentals
Effective April 1, 2004 the Fountain Hills tax code Section 8A-445(h) was amended to eliminate the exemption of the local sales tax on residential rentals. On January 15, 2004 the Town Council approved Ordinance 04-03 adopting a tax rate of 1.6% for all long-term residential rentals over 30 days (short term rentals, i.e., transient lodging, remain taxable under Section 8A-447.1). The tax will apply to all persons who lease or rent one or more properties (apartment units, houses, condos, etc.) within Fountain Hills for periods longer than 30 days.
The tax should be collected and remitted to the Arizona Department of Revenue on form TPT-1 (see below). The tax on advertising shall be reported using FH000 as the region code and FH004 for residential rentals (long term only). Rentals under 30 days (short term) should continue to be reported using region code FH003 and a rate of 3% that is in addition to the local rate of 2.6%.