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ARIZONA STATE SENATE
Fifty-Fifth Legislature, Second Regular Session
property tax; administration; county assessor
Purpose
Repeals the straight line building residual (SLBR) method of valuation available to the owner of a shopping center. Allows the county assessor to accept property tax exemption eligibility affidavits electronically and allows a taxpayer to file a notice of claim electronically for the purposes of a property tax error.
Background
The owner of a shopping center may elect to have the valuation of the shopping center determined by the SLBR method, rather than the replacement cost less depreciation method, if the owner submits the necessary income and expense information by September 1 of the year preceding the valuation year. On appeal of an SLBR valuation, the shopping center valuation must be determined using the authorized valuation method that most closely approximates fair market value (A.R.S. §§ 42-13203; 42-13204; and 42-13205).
Statute requires a taxpayer to file a notice of claim, either personally or by certified mail, if the taxpayer believes that their property has been assessed improperly as a result of a property tax error. The recipient of the notice of claim depends on the entity involved in the alleged valuation or classification error (A.R.S. § 42-16254).
When initially claiming a property tax exemption, a person must appear before the county assessor to make an affidavit as to the person's eligibility. If a personal appearance would create a severe hardship, the county assessor may arrange a mutually satisfactory meeting place to make an eligibility affidavit. In subsequent years the person claiming the exemption may appear before a notary public to make the eligibility affidavit (A.R.S. § 42-11152).
There is no anticipated fiscal impact to the state General Fund associated with this legislation.
Provisions
1. Repeals the SLBR method of valuation and the related appeals process available to the owner of a shopping center.
2. Removes the requirement for Arizona Department of Revenue to:
a) determine the average difference in valuation for similar size and age shopping centers that result from the cost less depreciation method and the SLBR method; and
b) develop a schedule of obsolescence factors for use by the county assessors for depreciation schedule purposes.
3. Allows a taxpayer to file a notice of claim electronically, if the taxpayer believes their property has been assessed improperly as a result of a property tax error.
4. Replaces the requirement for a person claiming a property tax exemption to appear before the county assessor to make an affidavit with a requirement to file a signed eligibility affidavit with the county assessor, under penalty of perjury.
5. Allows the county assessor to accept eligibility affidavits electronically.
6. Transfers administration of rental revenues deposited in the Highway Properties Fund to the applicable county treasurer, rather than the applicable county assessor.
7. Makes technical and conforming changes.
8. Becomes effective on the general effective date.
Prepared by Senate Research
January 31, 2022
MG/slp