Tax Revision Eases Burden For Renters

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Some low-income renters could reap the rewards of a sales-tax exemption passed at the May 24 Payson Town Council meeting.

Currently, a 2.5 percent sales tax -- called a transaction privilege tax -- is tacked onto the monthly rental payments of tenants under certain circumstances, including low-rent occupants.

Landlords who own fewer than three rental units, however, are now exempt from that tax.

The recent code revision will also exclude some low-income renters who meet defined income and rental-rate criteria.

"(The exemption) is major in terms of what they're charging those people state and city sales tax," said Glenn Smith, Town of Payson finance director. "This possibly exempts (certain renters) from either one of those taxes."

The tax code revision follows a statewide push to adopt the Model City Tax Code (MCTC), developed in the early 1990s to standardize sales-tax policies in municipalities throughout Arizona.

"We had to pass the tax code by July 1 to stay in harmony with the Model City Tax Code," said Town Manager Fred Carpenter.

The Arizona State Legislature created the MCTC after state lawmakers responded to business leaders struggling to comply with tax codes.

MCTC provides greater uniformity while allowing individual cities and towns to determine taxable and exempt items.

For more information about the MCTC, visit: www.modelcitytaxcode.org.

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