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ARIZONA HOUSE OF REPRESENTATIVESFifty-fourth Legislature Second Regular Session |
Senate: FIN DPA 10-0-0-0 | 3rd Read 28-0-2-0 |
SB 1575: property tax exemptions; statutory conformity
Sponsor: Senator Mesnard, LD 17
Committee on Ways & Means
Overview
Conditional on the voter approval of S.C.R. 1043, exempts, from property tax, the property of veterans with service or nonservice-connected disabilities who are Arizona residents.
History
The property of Arizona residents who are widows, widowers, persons with disabilities or honorably discharged veterans with a service or nonservice-connected disability as determined by the U.S. Veterans Administration, are exempt from taxation to the extent allowed by the Constitution of Arizona and subject to the conditions and limitations prescribed by statute. Exemptions from property taxation for widows, widowers and persons with disabilities are allowed in the amount of:
1) $3,000 if the person's total assessment does not exceed $20,000; or
2) No exemption if the person's total assessment exceeds $20,000. The Arizona Department of Revenue calculates changes in the exemption and household income limitations based on the average annual increase, if any, in the gross domestic product price deflator, in the two most recent complete state fiscal years using data provided by the U.S. Department of Commerce (A.R.S. § 42-11111).
The Legislature may exempt up to $50,000 of the full cash value of personal property used for agriculture purposes or in trade or business (Ariz. Const. art. 9, § 2). The Legislature has codified an exemption for personal property used for agriculture purposes or in trade or business, which is adjusted for inflation and is currently valued at $185,811 in tax year 2020 (A.R.S. § 42-11127).
According to the Joint Legislative Budget Committee (JLBC) fiscal note, the impact of S.B. 1575 and its companion S.C.R. 1043, cannot be determined due to data constraints. S.B. 1575 and S.C.R. 1043 could increase the state's Basic State Aid cost for K-12 schools and reduce the cost of the Homeowner's Rebate program, but may have offsetting savings under the automatic school tax rate adjustments provided by under the state’s Truth-in-Taxation provisions (JLBC fiscal note).
Provisions
1. Exempts the property of a veteran with a service or nonservice-connected disability who is an Arizona resident from property tax, in the following amounts:
a) $4,047, if the person's total assessment does not exceed $27,498; or
b) No exemption if the person's total assessment exceeds $27,498. (Sec. 2)
2. Limits the $4,047 property tax exemption for a veteran with a service or nonservice-connected disability who is an Arizona resident, by multiplying the total exemption amount by the percentage of the veteran's disability, as rated by the U.S. Department of Veterans Affairs. (Sec. 2)
3. Updates, to reflect the present-day amounts, the household income limits to:
a) $33,722 from $25,000, if no children under 18 years of age reside with the claimant; or
b) $40,456 from $30,000, if one or more children under 18 years of age or a claimant's child who has a total and permanent physical or mental disability resides with the claimant. (Sec. 2)
4. Requires a veteran with a service or nonservice-connected disability who is an Arizona resident to initially establish eligibility for the property tax exemption by filing an affidavit with the county assessor. (Sec. 2)
5. Defines veteran as an individual who has served in, and been discharged, separated or released under honorable conditions from, active or inactive service in the uniformed services of the United States, including:
a) All regular, reserve and national guard components of the U.S. Army, Navy, Air Force, Marine Corps and Coast Guard;
b) The Commissioned Corps of the National Oceanic and Atmospheric Administration;
c) The Commissioned Corps of the U.S. Public Health Service;
d) A nurse in the service of the American Red Cross or in the Army and Navy Nurse Corps; and
e) Any other civilian service that is authorized by federal law to be considered active military duty for the purpose of laws administered by the U.S. Secretary of Veterans Affairs. (Sec. 2)
6. Increases the exemption amount of $50,000 for property used in trade, business or for agricultural purposes to $185,811. (Sec. 3)
7. Conditions the enactment of this legislation on the Constitution of Arizona being amended as prescribed in S.C.R. 1043, Fifty-fourth Legislature, Second Regular Session, by vote of the people at the next general election. (Sec. 6)
8. Becomes effective on the general effective date or later, subject to the provisions of the conditional enactment. (Sec. 6)
9. Makes technical changes. (Sec. 2, 3)
10. Contains conforming changes. (Sec. 1, 2, 3, 4, 5)
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SB 1575
Initials: VP/BG Page 0 Ways & Means
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