We've been in real estate in Payson for near 20 years, and we get a lot of people who call us for information. We don't mind, we feel part of our job is educating people.
We DO get a lot of repeat questions, which we answer over and over again.
I got a rare one the other day, however. A woman called up and asked how much sales tax she should write into a rental agreement with a tenant. It took me by surprise, because VERY few people even know there IS sales tax on rentals in Payson. Since there are many rentals in the area, I'm surprised that the town of Payson doesn't make it more widely known.
Sales tax on rentals is set by the cities or towns. So if you own rentals elsewhere in AZ, contact your town and ask, or contact a good property management company.
For years, Payson said "no sales tax on residential rentals". Then one day it occurred to someone that this could bring in revenue. So the town decided to charge sales tax IF an Owner has 3 or more residential rentals.To determine the tax, one takes the amount of rent (say, $850) and multiplies by .0212 ($850 X .0212 = $18.02) I know this one by heart, as one of our Owners has a number of $850 rentals.
We pass these charges on to the Tenant, so in the example above, the Tenant pays $868.02.
We have a few rentals in Star Valley, which is now its own incorporated town. Star Valley doesn't care HOW many rentals an Owner has. Even 1 residential rental is taxed 2%.
Now what do you do with the money? Prest Realty is set up with the state of Arizona to pay the sales taxes for any of our Owners who needs to do so. So we collect it, and once a month we fill out the appropriate form and send the correct amount to the state (who pass the appropriate amount back the the correct town).
A private Owner would need to contact the state of Arizona, Department of Revenue for instructions.
Or, of course, they could just hire Prest Realty!