AZ HB2254

Adds a new exemption to Arizona Revised Statutes section 42-6004 prohibiting cities, towns, and other taxing jurisdictions from levying transaction privilege, sales, use, or similar taxes on the business of renting or leasing real property for residential purposes.

Requires cities and towns that were levying such taxes as of January 1, 2015 to annually reduce the tax rate by 25 percent of the initial rate for four consecutive years beginning July 1, 2016.

Mandates complete repeal of any residential real property rental or lease tax by all jurisdictions effective June 30, 2019.

Defines residential real property to include dwelling units, lodging facilities, trailers, or mobile home spaces intended as principal or permanent residences, or leased for at least 30 consecutive days, but excludes health care facilities, long-term care facilities, and transient lodging businesses.

Applies retroactively from December 31, 2014.