HB2672 is a bill that purports to deal with people who own properties and rent them as short-term rentals through online portals like AirBNB. But the devil is definitely in the details, as this Representative John Kavanagh bill provides cities with increased revenues, property owners will face new paperwork hassles, and most ominously, every Arizonan with a tax license is about to have his or her confidential personal information shared with the world.
While the bill’s stated purpose was to crack down on party houses and overcrowded properties, most of those parts of the bill have been removed because they included really bad ideas like government mandated cameras and monitoring equipment to keep real-time tabs on how many occupants were in every rental property. But HB2672 still requires every homeowner who wants to rent their home to get a tax license and to have that license number posted on their rental ads. Failures to do so will result in a fine, then a larger fine, then ultimately forfeiture of not only that license, but every license the property owner holds, even if it is for a business that has nothing to do with his/her rental property. So the government is requiring you to get a license so it has something to take away in case you don’t follow its orders.
The ordinarily conservative Kavanagh has some additional surprises up his sleeve for Arizona taxpayers because his bill will reward cities with a steady stream of revenue thanks to annual fees associated with the new licenses, and property owners will have to file tax returns for each license, even though people who understand online property rentals insist that since AirBNB and companies like it actually receive and process the rental payments, each property owner’s tax return will contain almost nothing except zeroes. Of course the state will also have to pay to have some bureaucrat receive and record these thousands of annual returns that generate little to no actual revenue for the state.
Like they say on TV, “but wait, there’s more!”, because Kavanagh’s bill also removes longstanding confidentiality for tax license applications and other filing documents, not just for property owners, but for all Arizonans who have any of the affected licenses. Now your personal information including income levels, nature of business, source of revenue, physical location of where you keep your tax records, and more, will become publicly available information.
There is no stated reason for this breach of confidential data and it appears to have nothing to do with cracking down on party houses, since it effects every licensee in Arizona, regardless of what business they are in. But like with most complicated bills to address simple problems, the devil is in the details. It comes as no surprise that an idea this bad has 50+ sponsors from both parties and it recently passed out of the committee that Kavanagh is Chairman of on an 8-2 vote. Kudos to Representatives Warren Petersen and Kevin Payne for voting No, but every Democrat joined Republican Kavanagh and Representatives Tony Rivero and Bob Thorpe in passing it.
We will try to learn more about the bill and keep you informed, but now might be a good time to reach out to your legislator to find out if they are a sponsor and, if so, why?