Real Property Rentals

All Real Property Rentals in Fountain Hills are Taxable

(Homes, Buildings, Land, etc.)

The Arizona Department of Revenue administers the transaction privilege tax for the Town of Fountain Hills; this means that you, as a property owner, will report and pay your Town of Fountain Hills transaction privilege tax to the Department of Revenue. Taxes can either be included in your overall price, or charged to your renter as a separate line item. If you use a property management company, you still need your own tax license with the Department of Revenue.

All residential properties being used as a rental in the Town of Fountain Hills need to be registered with Maricopa County https://mcassessor.maricopa.gov/static/docs/Residential-Rental-Property-Registration.pdf as a rental. You must be licensed and pay tax if you are in the business of leasing or renting real property, or licensing for use to a licensee, real property located within the Town of Fountain Hills. All real property rentals are subject to tax regardless of the number of rental units owned.

We are interested in pursuing all rental properties for compliance. If you would like to report a rental property for licensing compliance, please email the Town at rentaltax@fh.az.gov. The Town will gladly research the location and verify all tax and licensing requirements are met.

Residential rentals of less than 30 days are subject to an additional 4% transient tax (Hotel/Motel Classification) for the Town and 7.27% for the County. "Transient" means any person who, for any period less than thirty (30) consecutive days, either at his own expense or at the expense of another, obtains lodging or the use of any lodging space for which a charge is made on lodging or use of lodging space.

I Rent Out...

Residential Long-Term
(30 or more days)
Residential Short-Term
(less than 30 days)
Commercial property
(Buildings and/or Land)
We call this business activity Residential Rental

This business activity is taxable only to the Town of Fountain Hills

You need to have your own TPT license

A business license is not required
We call this business activity Hotel/Motel and Transient lodging

This business activity is taxable to the Town and County

You need to have your own TPT license

A business license is not required.
We call this business activity Commercial Lease

This business activity is taxable to the Town of Fountain Hills and County

You need to have your own TPT license

You need a business license for the Town of Fountain Hills – http://www.fh.az.gov/636/Business-Licenses
The tax rate is 1.6%

Some property management companies may report and/or pay on your behalf. Please check with your property management company to verify if they offer this service

All properties need to be registered as rentals with the County

Click here to see a list of what is taxable and deductible (Residential Rental Brochure).
The combined tax rate is 13.87% (FH=2.6% and 4.0%, MAR=7.27%)

Some online listing platforms may report and/or pay on your behalf. Please check with them to verify if they offer this service

All properties need to be registered as rentals with the County.
The combined rate is 3.1% (FH=2.6%, MAR=0.5%)

Some property management companies may report and/or pay on your behalf. Please check with your property management company to verify if they offer this service

There is no extra county registration for a commercial property.

Property managers may report on behalf of the property owner. However, the property owner is personally liable for the payment of the tax to the Arizona Department of Revenue.

Things to Remember

  1. Get a transaction privilege tax license with the Arizona Department of Revenue. You can apply online at http://www.azdor.gov, or you may call the Department at (602) 716-7368 or email at residentialrental@azdor.gov.
  2. Register your residential property with Maricopa County https://mcassessor.maricopa.gov/static/docs/Residential-Rental-Property-Registration.pdf (not commercial properties).
  3. Register the property with the Town of Fountain Hills at https://www.fh.az.gov/rentals.
  4. File your returns and pay the transaction privilege tax when it is due on http://www.AZTaxes.gov.

What residential rental income is taxable?

All payments made by a tenant, or on behalf of a landlord, are taxable. Please see the list below. Note: this list is not all-inclusive.

In addition to rent, taxable income includes payments by the tenant for:

  • All common income sources
  • Non-refundable deposits (e.g. security deposits, cleaning deposits, pet fee deposits)
  • Forfeited deposits
  • Pet fees
  • Federal rent subsidies (HUD)
  • Charges for utilities, unless separately metered and “pass through” only
  • Reimbursements (damages, keys, etc.) received from the tenants
  • Common area fees and maintenance charges
  • Telecommunications (phone, cable TV and internet service), unless separately metered and “pass through” only
  • Landscape maintenance or pool service paid to the owner
  • Homeowner association fees
  • Late fees, court fees and legal fees
  • Repairs and/or improvements
  • Payments of property taxes
  • Owner’s mortgages or home equity loans

What residential rental income is not taxable?

The Fountain Hills transaction privilege tax is calculated on your gross receipts. It is not a tax on your net income. The following items may be taken as a deduction on your tax return (only when included in the gross income on the front of your tax return):

  • City tax collected or factored into total revenue
  • Bad debts on which tax was paid on a previous month’s return
  • Refundable security deposits
  • Utility charges if individual meters have been installed and each tenant pays the exact amount billed by a utility department
  • Room charges to patients of qualifying health care organizations.

Deductions must be properly segregated in all documents and accounting records. Business records must be kept and maintained. In the absence of documentation, taxes will be assessed on gross receipts or estimated on a reasonable basis.

Due Date

Tax reports and taxes are due by the 20th of the month following a reporting period and are delinquent if not received (without regard to postmark date).

Note: The purchaser of rental property may be liable for taxes owed by the previous landlord.