Taxation of Hotels, Motels and Bed & Breakfasts
In addition to the two percent (2%) privilege tax, the City of Tempe imposes an additional five percent (5%) tax on revenue associated with transient lodging. The Arizona Department of Revenue has a Transaction Privilege Tax Ruling (TPR 94-5
) which the City of Tempe follows, defining "Transient".
The Arizona Department of Revenue and the various cities, in conjunction with the Arizona Hotel industry, have reviewed the various revenue categories generated by a hotel, motel, inn or a bed & breakfast. A table of the revenue categories and the taxes to which they are subject can be found at Hotel Motel Matrix