The Oro Valley Town Council has announced the possibility of voting to increase the town’s commercial rental, use, and telecommunications taxes as early as January 14, 2026.
According to the council’s agenda, three coordinated tax items are under consideration: authorizing public notice for a new 2.5% use tax, implementing a phased-in commercial rental tax starting at 1% on July 1, 2026, and increasing to 2.5% by July 1, 2028, and raising the telecommunications tax from 0% to 2.5%. These actions would initiate the state-required notice process under Arizona Revised Statutes (ARS) section 9-499.15, which includes website postings and direct mail notifications to affected taxpayers before a potential vote on January 14, 2026. Currently, Oro Valley does not collect these revenues; however, neighboring towns such as Tucson, Marana, and Sahuarita do levy similar taxes. Concerns have been raised by staff that a commercial rental tax could impact local businesses adversely, leading to the proposed phased-in approach.
Budget discussions reveal a small but persistent general-fund gap that officials argue justifies the proposed tax package. Critics suggest this gap could be managed through spending restraint and reprioritization. An article dated October 10 highlights projections of a $1.15 million shortfall over five years and $3.7 million in avoided spending since fiscal year 2023. Additionally, road maintenance costs have reportedly increased by 107%. The report also estimates that the introduction of three new taxes at a rate of 2.5%, along with an increase in stormwater fees from $4.50 to $6.50 per equivalent residential unit, could generate between $930,000 and $1.88 million annually—sufficient to cover the budget gap.
Oro Valley’s fiscal decisions are influenced by regional tax dynamics affecting its competitiveness. With approximately 47,000 residents and a median household income near $92,500—above both state and national averages—the town has a strong tax base but also many retirees who may be more sensitive to rising living costs. The combined sales-tax rate in Oro Valley is around 9%, slightly higher than Tucson and Marana but above Sahuarita’s rate.
The Oro Valley Town Council was incorporated in 1974 and operates under a council-manager system north of Tucson. The seven-member council includes a directly elected mayor and vice mayor chosen from among its members; they set policies related to land use, taxation, budgets, and long-term capital planning while a professional town manager handles daily operations.
