ARIZONA HOUSE OF REPRESENTATIVES Fifty-fifth Legislature First Regular Session
	Senate: FIN DP 8-2-0-0 | 3^rd Read 18-12-0-0 House: WM DP 5-4-0-1

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SCR 1019: constitutional property tax exemptions

Sponsor:  Senator Mesnard, LD 17

Caucus & COW

Overview

Subject to voter approval, amends the Constitution of Arizona to repeals sections 2, 2.1, 2.2 and 2.3 of Article IX of the Constitution of Arizona relating to property tax exemptions and consolidates the exemptions into a new section 2.

History

Currently the Constitution of Arizona exempts from property taxes:

1) Government property;

2) Public debts as evidenced by bonds;

3) Household goods;

4) Inventory of a retailer or wholesaler;

5) The property of honorably discharged military veterans subject to various requirements;

6) The property of widows;

7) The property of widowers; and

8) The property of totally and permanently disabled adults.

The Constitution further specifies money amounts, conditions and limitations for the exemptions of military veterans, disabled adults, widows and widowers. The legislature of Arizona is also permitted by the Constitution to exempt from property taxes: 1) the property of educational, charitable and religious nonprofits; 2) personal property used in agriculture and business; and 3) cemeteries.

In Benjamin v. Arizona Department of Revenue, (163 Ariz. 182 (1989)), the Arizona Court of Appeals held that the veteran’s property tax exemption was unconstitutional because it imposed an Arizona residency requirement that violated the 14th Amendment to the U.S. Constitution; further, the court concluded that the residency requirement for veterans was integral in purpose to the provision and thus could not be severed. Thereafter, the exemption for military veterans was deemed unenforceable and of no effect.

Provisions

1. Repeals Article IX, sections 2, 2.1, 2.2 and 2.3 of the Constitution of Arizona, relating to exemptions from property taxation. (Sec. 1)

2. Creates a new section 2 for Article IX of the Constitution of Arizona, relating to exemptions from property taxation.  (Sec. 2)

3. Exempts from property taxation:

a) All federal, state, county and municipal property;

b) Public debts, as evidenced by the bonds of this state or its political subdivisions;

c) Household goods that are owned by the user of the goods and that are used solely for noncommercial purposes; and

d) the inventory of a retailer or wholesaler principally engaged in the resale of the materials, parts, works or products. (Sec. 2)

4. States that the constitutionally mandated property tax exemptions are self-executing and persons who are entitled to the exemption are not required to take any affirmative action to receive the benefit of the exemption. (Sec. 2)

5. Permits the legislature to exempt — pursuant to laws as established by the legislature — from property taxation:

a) The property of a non-profit educational, charitable or religious institution;

b) Personal property used in business or trade or for agricultural purposes;

c) Cemeteries;

d) The property of a widow or widower;

e) The property of an individual with a medically certified total and permanent disability; and

f) The property of an honorably discharged veteran with a service or nonservice connected disability. (Sec. 2)

6. Specifies that a person is not eligible for exemption under more than one category as a widow, widower, person with a disability or veteran with a disability. (Sec. 2)

7. States that property that has been conveyed to evade taxation is not exempt. (Sec. 2)

8. Requires the Secretary of State to submit the proposition to the voters at the next general election. (Sec. 3)

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                        SCR 1019

Initials _NM/VP_         Page 0 Caucus & COW

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