Mesa charges tax on student rentals, families get free pass (subletting, tenants)

[freemkt]

I was looking up Mesa's Transaction Privilege Tax (TPT) on residential rentals and was surprised to learn that Mesa levies a 1.75% TPT on rentals to "multiple unrelated tenants" (e.g. college students or any group of unrelateds generally), while the tax does not apply when rented to a family or individual.

Can someone explain the reasoning behind this?

http://www.mesaaz.gov/home/showdocument?id=12101

[observer53]

Originally Posted by freemkt

I was looking up Mesa's Transaction Privilege Tax (TPT) on residential rentals and was surprised to learn that Mesa levies a 1.75% TPT on rentals to "multiple unrelated tenants" (e.g. college students or any group of unrelateds generally), while the tax does not apply when rented to a family or individual.

Can someone explain the reasoning behind this?

http://www.mesaaz.gov/home/showdocument?id=12101

I don't know the reason for it specifically, but I note that the distinction only applies to those who only own ONE residential rental property. If you have two or more, they are all taxable no matter who rents them. Perhaps it is because if you only own one property, and rent it to a single person or family, you are less "in the business" of renting than if you rent to several unrelated people. Just guessing there.

[ajonesaz]

I think it refers more to subletting. If two friends go in together and pay the rent together I can assume thats not the same. But if you have one address and you are renting multiple rooms to people who don't know each other, it is taxed. Very few rentals are going to be the "one and only" so avoiding that tax is going to be very difficult.