Gilbert, Arizona
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Learn MoreReal Property Rental Frequently Asked Questions
SalesTax@GilbertAZ.gov
Glossary:
AZDOR = Arizona Department of Revenue
GB = Town of Gilbert
MAR = Maricopa County
MCTC = Model City Tax Code
TPT = Transaction Privilege Tax
The Arizona transaction privilege tax (TPT) is commonly referred to as a sales tax; however, the tax is on the privilege of doing business in Arizona and is not a true sales tax. Although TPT is usually passed on to the consumer, it is actually a tax on the vendor. TPT is applied to entities engaged in certain business activities, including residential rental.
Types of business activities subject to TPT include, but are not limited to: retail sales, restaurants/bars, hotel/motel (transient lodging), commercial leasing, advertising, amusements, personal property rentals, real property rentals, construction contracting, owner/builders, manufactured building, severance (mining, timbering), transportation, printing, publishing, utilities, communications, air/railroad, private cars/pipelines and use tax.
The Arizona Department of Revenue (AZDOR) administers the tax for the Cities/Towns and Counties. Tax rates vary depending on the type of business activity, the city and the county.
If you own a property/building that you are renting out, you will need to obtain the state transaction privilege tax (TPT) license from AZDOR.
Types of business activities subject to TPT include, but are not limited to: retail sales, restaurants/bars, hotel/motel (transient lodging), commercial leasing, advertising, amusements, personal property rentals, real property rentals, construction contracting, owner/builders, manufactured building, severance (mining, timbering), transportation, printing, publishing, utilities, communications, air/railroad, private cars/pipelines and use tax.
The Arizona Department of Revenue (AZDOR) administers the tax for the Cities/Towns and Counties. Tax rates vary depending on the type of business activity, the city and the county.
If you own a property/building that you are renting out, you will need to obtain the state transaction privilege tax (TPT) license from AZDOR.
No, they are different. A business license is issued and overseen by your local municipality; while a Transaction Privilege (Sales) Tax license is issued by the Arizona Department of Revenue. Each license serves a different function for your business. The local business license allows you to do business in a given city. The TPT (Sales) Tax license allows you to file and pay your sales taxes through the Arizona Department of Revenue.
Residential Rental is only taxable to Gilbert, while Short-Term and Commercial Rentals are taxable to Gilbert, Maricopa County and/or the State of Arizona.
* There is an additional Gilbert tax for hotels/motels of 2.8%.
For a statewide list of business activities and applicable rates click here
| Jurisdiction | Region Code | Residential Rental Tax Rate | Short-Term Rental Tax Rate | Commercial Rental Tax Rate |
|---|---|---|---|---|
| Gilbert | GB | 1.5% | 1.5% | 1.5% |
| Gilbert Additional | GB | N/A | 2.8%* | N/A |
| State/County | MAR | N/A | 7.27% | 0.5% |
| Total | 1.5% | 11.57% | 2.0% |
For a statewide list of business activities and applicable rates click here
Commercial Property location in Gilbert is required to have a business license. Long-Term Residential Rental locations (30+ days) do not require a business license. Short-term rental locations (less than 30 days) have a voluntary registration with the Town of Gilbert. For more information on obtaining a Gilbert business license click here (online) or call 480-503-6700.
There are three different ways you can obtain a TPT license:
- Apply online at AZTaxes.gov. This option enables businesses to register, file and pay transaction privilege taxes online.
- Download and complete the Residential Rental Tax Application, or a Joint Tax Application (JT-1) and follow the instructions.
- Go to one of the AZ DOR offices to deliver the completed paper application.
- Phoenix Office, 1600 W Monroe, Phoenix AZ 85007
- Mesa Office (within the City of Mesa Customer Service Center),
55 N Center, Mesa AZ 85201 - Tucson Office, 400 W Congress, Tucson AZ 85701
If you already have a AZDOR TPT license and are adding a new property/building to your TPT license, you will add the region code, GB, to your return. If the ownership is the same, the locations can be consolidated under one license number to allow you to file a single return. If you do not wish to consolidate, you can complete separate license applications and have different license numbers issued for each location. Filing of tax return and payment of tax is required for each license issued.
The AZDOR administers the tax program for all municipalities in Arizona. Once you have your TPT license number, you can report and pay for all Cities and Towns on one return. You can report online through www.AZTaxes.gov, or if you prefer to file via paper, the Form TPT-EZ (for only one location) or the Form TPT-2 can found on the forms page at AZDOR.GOV.
NOTE: Businesses with more than one location are required to report and pay via AZTaxes.gov.
NOTE: Businesses with more than one location are required to report and pay via AZTaxes.gov.
There are four types of codes that you will use when reporting your taxes.
Location Code – Each physical location in the state is assigned a code by AZDOR. So if you own more than one location in the same city, make sure that you are reporting the right numbers with the right location code.
Region Code – Every City/Town and County is represented by a two or three letter code; Gilbert is GB, and the State/Maricopa County is MAR.
Business Code – Types of taxable business activity are represented on the return by a three digit number. For example, residential rental business code is 045. Sometimes the codes for the City/Town and the State/County; however, sometimes they are different as is the case with Commercial Property Rentals. Gilbert is GB 213, and the State/Maricopa County is MAR 013. For a statewide list click here.
Deduction Code – As a TPT (sales tax) state we report total gross receipts as revenue. But what about the stuff that we don’t owe tax on? That is where deduction codes come into play. On the tax return every amount that is deductible can be removed by using the associated deduction code. A comprehensive list of available deductions can be found on the AZDOR website.
Location Code – Each physical location in the state is assigned a code by AZDOR. So if you own more than one location in the same city, make sure that you are reporting the right numbers with the right location code.
Region Code – Every City/Town and County is represented by a two or three letter code; Gilbert is GB, and the State/Maricopa County is MAR.
Business Code – Types of taxable business activity are represented on the return by a three digit number. For example, residential rental business code is 045. Sometimes the codes for the City/Town and the State/County; however, sometimes they are different as is the case with Commercial Property Rentals. Gilbert is GB 213, and the State/Maricopa County is MAR 013. For a statewide list click here.
Deduction Code – As a TPT (sales tax) state we report total gross receipts as revenue. But what about the stuff that we don’t owe tax on? That is where deduction codes come into play. On the tax return every amount that is deductible can be removed by using the associated deduction code. A comprehensive list of available deductions can be found on the AZDOR website.
It is the responsibility of the Landlord to remit TPT. Whether you collect it from your customers or not, the tax liability for all taxable business conducted in Gilbert must be remitted.
When tax has not been separately billed to your customer, you may factor the tax out of your gross income before calculating tax due to the Town. When a business “factors” TPT, it means the tax is included in the total price rather than shown as a separate charge. If you choose to factor the tax, the tax must be calculated using a factoring formula. The factoring rate below is based on a the Gilbert only tax rate of 1.5%.
FACTORING RATE: Total Sales Tax Due = 0.01477833 X Gross Income
Here is a worksheet to help you if you choose not to charge tax separately.
When tax has not been separately billed to your customer, you may factor the tax out of your gross income before calculating tax due to the Town. When a business “factors” TPT, it means the tax is included in the total price rather than shown as a separate charge. If you choose to factor the tax, the tax must be calculated using a factoring formula. The factoring rate below is based on a the Gilbert only tax rate of 1.5%.
FACTORING RATE: Total Sales Tax Due = 0.01477833 X Gross Income
Here is a worksheet to help you if you choose not to charge tax separately.
Taxes are calculated by starting with the Total Collected from the tenant for the reporting period on the tax return, entering the itemized deductions (including tax collected), then multiplying the resulting net taxable amount by the appropriate tax rate (1.5% for Gilbert).
Yes, renting out a home/building is a taxable activity. Also, if you use a Property Management Company you must have your own TPT (Sales) Tax license;
- If you are renting out for long-term only (30+ days) then it is taxable at 1.5% to Gilbert only.
- If you are renting out for short-term, or vacation rentals (less than 30 days) than the activity falls into the hotel/motel/transient lodging classification. The combined rate is 11.57% for the State/County and Town of Gilbert.
- If you are renting out a commercial building than it is taxable at 1.5% to Gilbert and 0.5% to Maricopa County. The combined rate is 2.0%. Check out our Real Property Rental page for more information.
Gilbert taxes the rental of real property (i.e. house, land, buildings). The landlord is responsible for paying the taxes owed to the AZDOR, and can pass that tax on to the renter.
Yes, commercial rentals are taxable at 1.5% for Gilbert and 0.5% for Maricopa County for a combined total of 2.0%. For more information check out the Commercial Rental Tax Guidelines Brochure
Property taxes are handled by the county. Maricopa County staff can be reached here or 602-506-3406.