What Residential Rental Income is Taxable?

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All  payments made by a tenant, or on behalf of a landlord, are taxable. Please see the list below, and note that it is not inclusive.

Common Income Sources

  • Rent
  • Non-refundable and forfeited deposits
  • Late payment fees
  • Pet fees
  • Federal rent subsidies (HUD)

 

Fees Passed on to Tenant

  • Common area fees
  • Maintenance charges
  • Homeowner association fees
  • Landscaper maintenance
  • Property tax
  • Pool Service
  • Repairs and/or improvements

 

Individual owners of taxable rental properties are required by law to obtain a transaction privilege tax (TPT) license with the Arizona Department of Revenue (ADOR), regardless if the owner rents the property themselves or employs a property management company (PMC). A license is only required for cities that impose a tax on residential rental activity.