Local Sales Tax
Tax Collecting Agent
The Arizona Department of Revenue is the tax collecting agent for the Town. Sales tax payments are remitted to the AZ Department of Revenue, who then returns the portion of tax due back to the Town on a quarterly basis.
The Town of Carefree levies a 3% local sales tax on all retail sales, advertising and contracting conducted within the Town. The sale of food for home consumption (groceries) carries a local sales tax of 2%. Local sales tax on construction contracting and speculative building is 4%.
In order to legally conduct business within the town limits, all businesses requiring a transaction privilege tax (TPT) license must complete and submit the AZ TPT License Form to the AZ Department of Revenue, ensuring the Town of Carefree is selected as a/the program city.
The Arizona Department of Revenue has information to assist contractors. The webpages offer general information on the contracting classification, licensing, the use of exemption certificates, examples, and frequently asked questions. Additionally, sections provide definitions, insight into bond requirements, speculative builders, and key differences between Maintenance, Repair, Replacement and Alteration (MRRA) and Modification. Contractors are encouraged to go to Contracting Guidelines pages for important information.For more information, please contact the Town Clerk or visit www.aztaxes.gov.
Property TaxThe Town of Carefree levies no local property tax.
While the Town does not levy a local property tax, it has remained fiscally sound through careful and conservative budgeting. The main sources of annual revenue are: a share of AZ state sales tax, the 3% local sales tax on purchases, a 3% use tax, permit fees, state urban revenue sharing (state income tax), gasoline and auto lieu taxes, annual franchise fees from Southwest Gas, Cox Cable TV license fees and interest on Town investments.
Town residents are still required to pay property taxes to several jurisdictions (see chart below.) Most taxing jurisdictions have two rates, a primary and a secondary rate. Primary rates pay for operational expenses. Secondary rates pay for bonded indebtedness and capital improvement projects.
|2022 Tax Rates
|State of Arizona
|Town of Carefree
|Maricopa County Health Care
|Maricopa County Flood Control District
|Central Arizona Water Conservation
|Cave Creek School District
The property tax rate is levied on each $100 of assessed value. The assessed value is a percentage of market value, as established by the Maricopa County Assessor.
Information on assessed property values may be obtained from the Maricopa County Tax Assessor or by calling 602-506-3011, outside Arizona 800-540-5570.
Residential rental property located within the Town is subject to this tax if the property owner has three (3) or more residential rental units within the state of Arizona. If a residential rental property owner also has any commercial rental property in the state, then all of the residential rental property within Carefree is subject to the 3% use tax. If a property manager handles the residential rental/s for a property owner, the rent receipts from that property are subject to the 3% tax, even if the owner owns less than three (3) units in the state.
Carefree assesses a 3% use tax for out-of-state, non-taxed purchases over $1,000. This use tax removes the competitive advantage out-of-state internet-based businesses have over current and future local businesses by applying a uniform local tax rate. Internet purchases under $1,000, as well as items such as prescription drugs, are exempt from the use tax.
Carefree privilege taxes are collected by the Arizona Department of Revenue on behalf of the Town. Please call (602) 255-3381 with questions, or visit their web site, Arizona Department of Revenue.
Arizona Department of RevenueThe Arizona Department of Revenue has released the Arizona Transaction Privilege Tax Notice (PDF) to address various questions and provide examples involving changes to the prime contracting classification for Arizona transaction privilege tax due to AZ House Bill 2389, effective January 1, 2015.
The department has issued new TPT/Sales tax renewal requirements as of January 1, 2017. For more information click here.
Short Term Rentals (STR)
“Short term rentals” also known as “Vacation rentals” are dwelling units offered for a rental term of less than 30 days to transient guests. According to A.R.S. §9-500.39, local cities and towns including Carefree may not regulate these types of rentals based solely on their classification or use. However, local municipalities can limit the use of these rentals for nonresidential purposes as defined in the same State law. Carefree’s Town Council passed Ordinance 2020-01 allowing for such oversight. Also, State law does not preclude the ability for Homeowner Associations to regulate or restrict these types of uses.
Therefore, Short term rentals are considered the same as traditional dwelling units and are allowed by-right in all residential districts, subject to the following:
- All dwelling units and any accessory guest houses must be rented or offered for rent together, and may not be rented or offered for rent independently.
- Non-residential uses, including retail, restaurant, banquet space, event center, bed & breakfast, or other similar use is prohibited.
- All Short term rentals have a Transaction Privilege Sales Tax and a Transient Tax liability. A Transaction Privilege Sales Tax license with the State of Arizona Department of Revenue is required. Be sure to list Carefree as a region code on your license. Please visit https://azdor.gov/ to register.
- All rental units, including long term, vacation, and/or short term rentals, shall be registered with Maricopa County, in accordance with A.R.S. §33-1902.
- The owner of a vacation rental shall register with the Town of Carefree the name and contact information of a person designated as an emergency contact, as well as contact information for owner or owner’s designee for responding to complaints. The owner will also apply for a Carefree Business License.
How to Register your Short Term/Vacation Rental
To register your short term rental with the Town of Carefree, please fill out the Short Term Vacation Rental Registration Form and email it to Dennis Randolph at firstname.lastname@example.org or fax it to 480-488-3845 attention Dennis Randolph.
Model City Tax Code
For Access to the Model City Tax Code (MCTC) website, click here to visit the Arizona Department of Revenue (ADOR) website. As of July 1, 2012, ADOR will now be responsible for the administration of the official copy of the Model City Tax Code, in accordance with HB 2336 from the 2011 legislative session.