Beginning January 1, 2025, the transaction privilege tax (TPT) applicable to the rental of real estate for residential purposes (residential rental) is eliminated. Before its elimination, the residential rental TPT was reported and collected for long-term lodging stays of 30 days or more.

Owners must continue to collect, file, and pay residential rental TPT for periods through December 31, 2024, and file in January 2025. For periods after January 1, 2025, owners do not need to collect residential rental TPT.

TPT licenses that only have residential rental (business code 045) on their account will be automatically canceled effective December 31, 2024, and will not be renewed for the 2025 calendar year. If the business has other business activity on the same license, instead the residential rental location will be closed. No further action or steps need to be taken to cancel the license or close the location.

Companies should be aware that cancelation of your license does not exempt you from liabilities related to periods before January 1, 2025. If liabilities are unpaid, the ADOR may still take enforcement actions against you.

Douglas S. John represents individuals and companies in state and local tax matters. For businesses with unpaid liabilities or questions regarding the residential rental TPT or other state and local tax issues, please reach out to Mr. John at djohn@frgalaw.com.