Gilbert Town Council seeks to raise sales, use and bed tax rates for start of 2025

PHOENIX — The Gilbert Town Council approved a motion to pursue the increase of sales, use and bed tax rates in the city that would go into effect Jan. 1, 2025, according to a press release.

City officials came to the decision during an Aug. 20 meeting and cleared the proposal for a final vote on Oct. 22.

Inflation and the growing need for new infrastructure were among the factors behind the proposal. Officials said the infrastructure will be primarily funded by cash to reduce costs to city residents and businesses.

This last checkpoint will be held as a public hearing in the council chambers of Gilbert Town Hall located at Gilbert Road and Civic Center Drive. The vote process is scheduled to begin at 6:30 p.m. on the October date.

How much would each tax increase if the proposal passes?

The sales tax rate would rise from 1.5% to 2% and result in consumers paying an additional 50 cents on a $100 purchase.

Use tax, which is currently 0% in Gilbert, would increase to 2% if approved. The tax is paid for by residents and businesses whenever online purchases are made with vendors who bring in less than $100,000 per year in Arizona. Other Valley communities charge a use tax rate between 1.5% and 2.9%, according to the release.

The city’s current bed tax of 2.8% would be upped to 5%. This tax is paid for by any travelers who rent living spaces in hotels, motels and other lodging in the town. Other Valley cities have rates ranging from 2.5% to 5%.

The combined tax changes would bring in an estimated $55 million per year in effort to fulfill these critical needs for a fast-expanding city.

What projects will be funded with the proposed tax revenue?

A vast majority of the potential tax revenue would fund Gilbert Parks and Recreation and the Gilbert Police and Fire departments.

These city departments were all part of a 10-year study from 2014-2023 that analyzed critical infrastructure needs for each. The council’s study identified 33 total projects worth $1 billion once Dec. 2023 rolled around. At a March 2024 financial retreat, that project list was narrowed down to the most-pressing 23 and a $700 million price tag.

More details on the upcoming public hearing can be found here.