Oro Valley Considers Commercial Rental Tax Amid Business Climate Concerns

Commercial Rental TaxORO VALLEY, Arizona (September 25, 2025) — The Oro Valley Town Council is weighing a new commercial rental tax along with other proposed fees as part of its 2025 Taxes and Fees package. Town officials cite the need to “address rising operational costs, aging infrastructure and the Town’s long-term financial stability” as the primary drivers for the proposals. They also point out that neighboring municipalities have adopted similar fees.

However, the move has raised concerns among business and commercial real estate stakeholders, many of whom argue that Oro Valley’s existing regulatory environment already creates significant barriers to business growth. Critics note the Town’s past decisions to deny housing projects, such as the Casita and Kai proposals, as well as restrictions on new business entries at the Oro Valley Marketplace. These policies, they say, contribute to the very retail “leakage” that town leadership acknowledges — estimated at $1.8 billion annually — by forcing residents and businesses to shop or locate elsewhere.

During a July 10 Zoom meeting and at the September 11 Oro Valley Chamber Business Forum, local professionals voiced concerns about the new tax. Despite this feedback, the Town’s Budget and Finance Commission voted unanimously in favor of the proposed taxes on September 16.

Opportunities for Public Input

Residents and stakeholders can still weigh in at the following Oro Valley Town Hall meetings (11000 N. La Cañada Drive):

  • Town Council Study Session – Wednesday, Oct. 1 at 6 p.m.
  • Town Council Public Hearing – Wednesday, Oct. 15 at 6 p.m.

Both sessions are open to the public and will include time for comment. Written feedback can be submitted in advance by emailing ask@orovalleyaz.gov (with a copy to Kristen Sharp, CEO of the Oro Valley Chamber of Commerce).

Stakeholder Concerns

Commercial real estate professionals caution that the proposed rental tax could make Oro Valley less competitive for tenants seeking space.

“Tenants regularly pursue cost savings when deciding where to lease space and rental tax is a significant consideration. This will have the effect of steering commercial renters out of Oro Valley more than they already are by the perception of the Town being unfriendly to businesses,” one industry participant said.

Others noted that while other municipalities may impose similar taxes, Oro Valley’s higher property tax valuations already put tenants at a disadvantage. In one cited case, a property on Oracle Road near Linda Vista carried NNN charges of $14.19 per square foot annually, compared with below $10 per square foot in nearby market areas. Property taxes accounted for more than half of that burden.

Stakeholders emphasized that any new rental tax would ultimately be passed on to tenants, not landlords, further increasing occupancy costs and potentially driving businesses to relocate outside of Oro Valley.

The debate underscores a broader tension in the community: balancing fiscal stability and infrastructure needs with the Town’s ability to attract and retain businesses in a competitive regional marketplace.