What Residential Rental Income is Taxable?

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.