2025 Tax Rates

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A wide aerial shot of Gilbert near the Morrison Ranch community.

A young girl is photographed while climbing up a large rope obstacle course.

A group of Gilbert Police officers pose next to police cruisers and motorcycles at Gilbert Regional Park.

A male firefighter poses in full uniform with the skyline behind him.

Gilbert, like many communities, is being significantly impacted by ongoing inflation, cost escalations and changing revenue streams. With more than 280,000 residents, continued investment in our infrastructure is pivotal to ensuring Gilbert can maintain a high quality of life and be sustainable well into the future.

Time is of the essence as many of Gilbert's services are overcapacity and new infrastructure is needed.

Unlike many other communities, Gilbert does not impose a Primary Property Tax. This means that infrastructure projects must be funded through bonds or cash from sales tax revenues. Gilbert intends to cash fund as much of the critical infrastructure projects as possible to reduce costs and maximize the value to taxpayers.

During the October 22, 2024 Council Meeting, the Gilbert Town Council approved the increase of Gilbert’s sales tax, use tax, and bed tax rates, with the new rates going into effect January 1, 2025.

Sales, use, and bed taxes are paid for by residents, businesses, and visitors. Allowing visitors to help pay the cost of infrastructure they benefit from while in Gilbert reduces the costs to residents and businesses.

Sales Tax: Historically, Gilbert has had one of the lowest sales tax rates in the valley at 1.5%. With the new tax rate structure, Gilbert’s sales tax rate will increase from 1.5% to 2.0%, equating to 50 cents more on a $100 purchase. For context, all other peer communities in the valley charge a sales tax rate between 1.5% and 2.9%.
Use Tax: Use tax is paid for by residents and businesses when purchases are made online with out-of-state vendors who do less than $100K of sales in Arizona per year. When an out-of-state vendor does more than $100K, they would be required to charge sales tax and use tax would no longer apply. Gilbert’s use tax rate will increase from 0% to 2.0%. All other peer communities in the valley charge a use tax rate between 1.50% and 2.9%.
Bed Tax: Bed tax is paid for by travelers who rent accommodations in a hotel, motel, or other lodging in Gilbert. Gilbert’s bed tax rate will increase from 2.8% to 5.0%. All other peer communities in the valley charge a bed tax rate between 2.5% and 5.0%.

What is the difference between sales tax, use tax, and bed tax?

Sales tax is paid for by residents, visitors, and businesses who purchase certain goods and services in Gilbert.

Use tax is paid for by residents and businesses when purchases are made online with out-of-state vendors who do less than $100K of sales in Arizona per year. When an out-of-state vendor does more than $100K, they would be required to charge sales tax and use tax would no longer apply. Here are some examples from the Arizona Department of Revenue of how use tax works.

Bed tax is charged in addition to the base sales tax for hotel, motel, vacation rental, or similar accommodations where a person obtains lodging for a period less than 30 consecutive days. A portion of the increased revenue from bed tax will be restricted for tourism-related purposes in accordance with state law (ARS §9-500.06).

Allowed tourism-related purposes include:

Direct expenditures by the town to promote tourism, including but not limited to sporting events or cultural exhibits.
Contracts between the town and nonprofit organizations for the promotion of tourism.
Expenditures by the town to develop, improve, or operate tourism related attractions or facilities or assist in the planning and promotion of such attractions and facilities.

How does Gilbert's tax rates compare to other valley cities?

Gilbert's tax rate on retail sales was 1.00% from 1973 to 2000 and 1.50% from 2000 to present day. The new tax rate will be 2.0%.

Graph showing how Gilbert's new sales tax compares to other valley cities.

Currently, Gilbert's use tax rate is 0%. The new tax rate will bring Gilbert's use tax rate to 2.0%. All other peer communities in the valley charge a use tax rate between 1.50% and 2.9%.

Graph showing how Gilbert's new use tax rate compares to other valley cities.

Gilbert's current bed tax rate is 2.8%. The increase will bring the bed tax rate to 5.0%. All other peer communities in the valley charge a bed tax rate between 2.5% and 5.0%.

Graph showing how Gilbert's new bed tax rate compares to other valley cities.

How much more will I have to pay in sales tax?

What will Gilbert do with the anticipated revenue?

Infrastructure can be bond-funded or cash-funded through sales tax revenues. Gilbert anticipates cash funding as much of the critical infrastructure projects as possible to reduce costs and maximize the value to taxpayers.

The proposed changes are estimated to produce about $55m per year. A small portion of the anticipated revenue would be restricted bed tax which would be used for tourism-related purposes. The unrestricted revenue will be used for Town needs and infrastructure, at Council’s direction.

View Priority Projects

Why did the Gilbert Town Council consider these sources of funding?

Multiple funding options were discussed for the needed infrastructure. After weighing and discussing options, Council decided to pursue increases to the sales, use, and bed tax rates.

Some of the benefits include:

Sales tax is an ongoing revenue source, and Gilbert will continue to have needs (including infrastructure repair and replacement) through buildout and beyond.
Infrastructure can be either cash-funded or bond-funded through sales tax revenues. Infrastructure repaid through secondary property tax must be bond funded. Due to the timing of current infrastructure needs, some bond funding will be needed but Gilbert plans to cash fund (to reduce interest and repayment costs) as much as possible.
Sales, use, and bed taxes are paid by residents, businesses, and visitors. Allowing visitors to help pay the cost of the infrastructure they benefit from while in Gilbert reduces the costs to residents and businesses.

View the Council's discussion at their Spring Financial Retreat here.

When will the new tax rates go into effect?

Gilbert's Critical Infrastructure Projects

Collectively, Gilbert Parks and Recreation, Police, and Fire departments contribute to the overall well-being and quality of life in a community. Their services and initiatives promote safety, physical and mental well-being, community engagement, and a sense of belonging, making the community a desirable place to live, work, and raise a family.

From 2014 to 2023, the Town analyzed critical infrastructure needs for Parks, Police and Fire. Staff completed master plans and studies, gathered data, and worked to determine resident needs and the best way to meet those necessary levels of service.

In December 2023, Council and staff discussed the upcoming infrastructure needs for Parks, Police, and Fire. 33 high-priority projects costing over $1 billion total were identified. Over the next several months, and at the March 2024 Financial Retreat, staff worked diligently with the Council to create a plan that prioritized the most critical infrastructure investments based on urgency and magnitude of consequences should a lack of investment occur. Of the original list of crucial infrastructure needs, 23 projects representing over $700 million were identified as the highest time-sensitive and most needed to move forward.

Input from citizens, master plan engagement, community impact, geographic accessibility, the Parks and Recreation Advisory Board, and Council were all considered in prioritizing these projects. The projects and costs will continue to be refined as design and scope are solidified.