ARIZONA HOUSE OF REPRESENTATIVES

HCR2029: personal property tax exemption

PRIME SPONSOR: Representative Mesnard, LD 17

BILL STATUS: Ways & Means

Abstract

Relating to a personal property tax exemption.

Provisions

1. Upon voter approval:

a. Prohibits levying a tax on the first $2 million of FCV of personal property initially acquired during or after TY 2019 that is used for agricultural, trade or business purposes.

b. Permits the Legislature to adjust the exemption amount based on variations in a designated national inflation index.

2. Declares the measure as the "Small Business Job Creation Act."

3. Requires the SOS to submit this proposition to the voters at the next general election.

4. Makes technical and conforming changes.

Current Law

The first $50,000 of FCV of a taxpayer’s personal property used for agricultural, trade or business purposes are exempt from taxation. Pursuant to A.R.S. § 42-11127, DOR is required to annually increase the maximum amount of the exemption for the following tax year based on the percentage increase, if any, in the employment cost index for total compensation for private industry workers in the two most recent FY's. In TY 2018, the first $168,130 of FCV is exempt.

The FCV is prohibited from being greater than market value regardless of the method prescribed to determine value for property tax purposes. Personal property is defined as property of every kind, both tangible and intangible, not included in real estate (A.R.S. § 42-11001).

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Fifty-third Legislature                  HCR 2029

Second Regular Session                               Version 1: Ways & Means

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