The first time I rented, a realtor did everything for me. He charged a 1.5 sales tax against the monthly rent fee. I did not specify that I would be charging sales tax when I accepted their application and approved them. I am meeting them in a few days to sign the lease. Am I required to charge them the sales tax? Or can I just charge them the rent fee?
Also do I have to write a check to the state for the sales tax, or is this done automatically when I file my taxes?
Yes, each municipality has it's own tax rate. And, that fee you pass on to the tenant. Has not been an issue with tenants I've rented to.
A CITY sales tax is your responsibility. Read the filing requirements for each municipality. Filing can be monthly, and others are quarterly.
@Art Scott is right on the money. Arizona allows municipalities/cities to impose a rent tax (sales tax?) on rental units. Only a few cities in AZ actually collect a rent tax. Each city sets their own tax rate. In my city (Sierra Vista), the tax rate is 1%. My city only collects it from landlords who have 3 or more SFR rentals in the state or 1 or more multi-family rentals. Sierra Vista also requires the landlord to obtain a business license and a permit to operate a business from home. (I don't think the landlord requires either of these if using a Property Management company.)
The AZ state legislature is attempting to pass a bill to do away with the rent tax state wide. But many cities are fighting this because they don't want to admit the cost gets passed on to the tenants.
Get the Ultimate Beginner's Guide
Sign up today to receive the popular eBook for free!