Chapter 0014 - 561R - S Ver of SB1230

Be it enacted by the Legislature of the State of Arizona:

Section 1. Section 42-5009, Arizona Revised Statutes, is amended to read:

START_STATUTE42-5009. Certificates establishing deductions; liability for making false certificate; tax exclusion; definitions

A. A person who conducts any business classified under article 2 of this chapter may establish entitlement to the allowable deductions from the tax base of that business by both:

1. Marking the invoice for the transaction to indicate that the gross proceeds of sales or gross income derived from the transaction was deducted from the tax base.

2. Obtaining a certificate executed by the purchaser indicating the name and address of the purchaser, the precise nature of the business of the purchaser, the purpose for which the purchase was made, the necessary facts to establish the appropriate deduction and the tax license number of the purchaser to the extent the deduction depends on the purchaser conducting business classified under article 2 of this chapter and a certification that the person executing the certificate is authorized to do so on behalf of the purchaser. The certificate may be disregarded if the seller has reason to believe that the information contained in the certificate is not accurate or complete.

B. A person who does not comply with subsection A of this section may establish entitlement to the deduction by presenting facts necessary to support the entitlement, but the burden of proof is on that person.

C. The department may prescribe a form for the certificate described in subsection A of this section. Under such rules as it may prescribe, the department may also describe transactions with respect to which a person is not entitled to rely solely on the information contained in the certificate provided for in subsection A of this section but must instead obtain such additional information as required by the rules in order to be entitled to the deduction.

D. If a seller is entitled to a deduction by complying with subsection A of this section, the department may require the purchaser that caused the execution of the certificate to establish the accuracy and completeness of the information required to be contained in the certificate that would entitle the seller to the deduction. If the purchaser cannot establish the accuracy and completeness of the information, the purchaser is liable in an amount equal to any tax, penalty and interest that the seller would have been required to pay under this article if the seller had not complied with subsection A of this section. Payment of the amount under this subsection exempts the purchaser from liability for any tax imposed under article 4 of this chapter. The amount shall be treated as tax revenues collected from the seller in order to designate the distribution base for purposes of section 42-5029.

E. If a seller is entitled to a deduction by complying with subsection B of this section, the department may require the purchaser to establish the accuracy and completeness of the information provided to the seller that entitled the seller to the deduction. If the purchaser cannot establish the accuracy and completeness of the information, the purchaser is liable in an amount equal to any tax, penalty and interest that the seller would have been required to pay under this article if the seller had not complied with subsection B of this section. Payment of the amount under this subsection exempts the purchaser from liability for any tax imposed under article 4 of this chapter. The amount shall be treated as tax revenues collected from the seller in order to designate the distribution base for purposes of section 42-5029.

F. The department may prescribe a form for a certificate used to establish entitlement to the deductions described in section 42-5061, subsection A, paragraph 46 and section 42-5063, subsection B, paragraph 3. Under rules the department may prescribe, the department may also require additional information for the seller to be entitled to the deduction. If a seller is entitled to the deductions described in section 42-5061, subsection A, paragraph 46 and section 42-5063, subsection B, paragraph 3, the department may require the purchaser who executed the certificate to establish the accuracy and completeness of the information contained in the certificate that would entitle the seller to the deduction. If the purchaser cannot establish the accuracy and completeness of the information, the purchaser is liable in an amount equal to any tax, penalty and interest that the seller would have been required to pay under this article. Payment of the amount under this subsection exempts the purchaser from liability for any tax imposed under article 4 of this chapter. The amount shall be treated as tax revenues collected from the seller in order to designate the distribution base for purposes of section 42-5029.

G. If a seller claims a deduction under section 42-5061, subsection A, paragraph 25 and establishes entitlement to the deduction with an exemption letter that the purchaser received from the department and the exemption letter was based on a contingent event, the department may require the purchaser that received the exemption letter to establish the satisfaction of the contingent event within a reasonable time. If the purchaser cannot establish the satisfaction of the event, the purchaser is liable in an amount equal to any tax, penalty and interest that the seller would have been required to pay under this article if the seller had not been furnished the exemption letter. Payment of the amount under this subsection exempts the purchaser from liability for any tax imposed under article 4 of this chapter. The amount shall be treated as tax revenues collected from the seller in order to designate the distribution base for purposes of section 42-5029. For the purposes of this subsection, "reasonable time" means a time limitation that the department determines and that does not exceed the time limitations pursuant to section 42-1104.

H. The department shall prescribe forms for certificates used to establish the satisfaction of the criteria necessary to qualify the sale of a motor vehicle for the deductions described in section 42-5061, subsection A, paragraph 14, paragraph 28, subdivision (a) and paragraph 44 and subsection U. Except as provided in subsection J of this section, to establish entitlement to these deductions, a motor vehicle dealer shall retain:

1. A valid certificate as prescribed by this subsection completed by the purchaser and obtained before the issuance of the nonresident registration permit authorized by section 28-2154.

2. A copy of the nonresident registration permit authorized by section 28-2154.

3. A legible copy of a current valid driver license issued to the purchaser by another state or foreign country that indicates an address outside of this state. For the sale of a motor vehicle to a nonresident entity, the entity's representative must have a current valid driver license issued by the same jurisdiction as that in which the entity is located.

4. For the purposes of the deduction provided by section 42-5061, subsection A, paragraph 14, subdivision (a), a certificate documenting the delivery of the motor vehicle to an out-of-state location.

I. Notwithstanding subsection A, paragraph 2 of this section, if a motor vehicle dealer has established entitlement to a deduction by complying with subsection H of this section, the department may require the purchaser who executed the certificate to establish the accuracy and completeness of the information contained in the certificate that entitled the motor vehicle dealer to the deduction. If the purchaser cannot establish the accuracy and completeness of the information, the purchaser is liable in an amount equal to any tax, penalty and interest that the motor vehicle dealer would have been required to pay under this article and under articles IV and V of the model city tax code as defined in section 42-6051. Payment of the amount under this subsection exempts the purchaser from liability for any tax imposed under article 4 of this chapter and any tax imposed under article VI of the model city tax code as defined in section 42-6051. The amount shall be treated as tax revenues collected from the motor vehicle dealer in order to designate the distribution base for purposes of section 42-5029.

J. To establish entitlement to the deduction described in section 42-5061, subsection A, paragraph 44, a public consignment auction dealer as defined in section 28-4301 shall submit the valid certificate prescribed by subsection H of this section to the department and retain a copy for its records.

K. Notwithstanding any other law, compliance with subsection H of this section by a motor vehicle dealer entitles the motor vehicle dealer to the exemption provided in section 42-6004, subsection A, paragraph 4.

L. The department shall prescribe a form for a certificate to be used by a person that is not subject to tax under section 42-5075 when the person is engaged by a contractor that is subject to tax under section 42-5075 for a project that is taxable under section 42-5075. The certificate permits the person purchasing tangible personal property to be incorporated or fabricated by the person into any real property, structure, project, development or improvement to provide documentation to a retailer that the sale of tangible personal property qualifies for the deduction under section 42-5061, subsection A, paragraph 27, subdivision (b). A prime contractor shall obtain the certificate from the department and shall provide a copy to any such person working on the project. The prime contractor shall obtain a new certificate for each project to which this subsection applies. For the purposes of this subsection, the following apply:

1. The person that is not subject to tax under section 42-5075 may use the certificate issued pursuant to this subsection only with respect to tangible personal property that will be incorporated into a project for which the gross receipts are subject to tax under section 42-5075.

2. The department shall issue the certificate to the prime contractor on receiving sufficient documentation to establish that the prime contractor meets the requirements of this subsection.

3. If any person uses the certificate provided under this subsection to purchase tangible personal property to be used in a project that is not subject to tax under section 42-5075, the person is liable in an amount equal to any tax, penalty and interest that the seller would have been required to pay under this article if the seller had not complied with subsection A of this section. Payment of the amount under this section exempts the person from liability for any tax imposed under article 4 of this chapter. The amount shall be sourced under section 42-5040, subsection A, paragraph 2.

M. Notwithstanding any other law, compliance with subsection L of this section by a person that is not subject to tax under section 42-5075 entitles the person to the exemption allowed by section 465, subsection (k) of the model city tax code when purchasing tangible personal property to be incorporated or fabricated by the person into any real property, structure, project, development or improvement.

N. The requirements of subsections A and B of this section do not apply to owners, proprietors or tenants of agricultural lands or farms who sell livestock or poultry feed that is grown or raised on their lands to any of the following:

1. Persons who feed their own livestock or poultry.

2. Persons who are engaged in the business of producing livestock or poultry commercially.

3. Persons who are engaged in the business of feeding livestock or poultry commercially or who board livestock noncommercially.

O. A vendor who has reason to believe that a certificate prescribed by this section is not accurate or complete will not be relieved of the burden of proving entitlement to the exemption. A vendor that accepts a certificate in good faith will be relieved of the burden of proof and the purchaser may be required to establish the accuracy of the claimed exemption. If the purchaser cannot establish the accuracy and completeness of the information provided in the certificate, the purchaser is liable for an amount equal to the transaction privilege tax, penalty and interest that the vendor would have been required to pay if the vendor had not accepted the certificate.

P. Notwithstanding any other law, an online lodging operator, as defined in section 42-5076, shall be entitled to an exclusion from any applicable taxes for any online lodging transaction, as defined in section 42-5076, facilitated by an online lodging marketplace, as defined in section 42-5076, for which the online lodging operator has obtained from the online lodging marketplace written notice that the online lodging marketplace is registered with the department to collect applicable taxes for all online lodging transactions facilitated by the online lodging marketplace, and transaction history documenting tax collected by the online lodging marketplace, pursuant to section 42-5005, subsection L.

Q. The department shall prescribe the form of a certificate to be used by a person purchasing an aircraft to document eligibility for a deduction pursuant to section 42-5061, subsection B, paragraph 8, subdivision (a), item (v) or an exemption pursuant to section 42-5159, subsection B, paragraph 8, subdivision (a), item (v), relating to aircraft. The person must provide this certificate and documentation confirming that the operational control of the aircraft has been transferred or will be transferred immediately after the purchase to one or more persons described in section 42-5061, subsection B, paragraph 8, subdivision (a), item (i), (ii), (iii) or (iv) or section 42-5159, subsection B, paragraph 8, subdivision (a), item (i), (ii), (iii) or (iv). Operational control of the aircraft must be transferred for at least fifty percent of the aircraft's flight hours. If such operational control is not transferred for at least fifty percent of the aircraft's flight hours during the recapture period, the owner of the aircraft is liable for an amount equal to any tax that the seller or purchaser would have been required to pay under this chapter at the time of the sale, plus penalty and interest. The recapture period begins on the date that operational control of the aircraft is first transferred and ends on the later of the date the aircraft is fully depreciated for federal income tax purposes or five years after operational control was first transferred. For the purposes of this subsection, operational control of the aircraft must be within the meaning of federal aviation administration operations specification A008, or its successor, except that:

1. If it is determined that operational control has been transferred for less than fifty percent but more than forty percent of the aircraft's flight hours, the owner of the aircraft is liable for an amount equal to any tax that the seller or purchaser would have been required to pay under this chapter at the time of the sale, plus interest.

2. If the aircraft is sold during the recapture period, the seller is not liable for the amount determined pursuant to this subsection unless the operational control of the aircraft had not been transferred for at least fifty percent of the aircraft's flight hours at the time of the sale.

R. Notwithstanding any other law, a shared vehicle owner is entitled to an exclusion from any applicable taxes for a shared vehicle transaction that is facilitated by a peer-to-peer car sharing program and for which the peer-to-peer car sharing program has collected and remitted applicable taxes.

S. A qualifying community health center, qualifying health care organization or qualifying hospital or any other entity that is recognized as nonprofit under section 501(c) of the United States internal revenue code and that is required to obtain an exemption letter from the department shall:

1. Apply to the department for the exemption letter and fully answer any eligibility questions required by the department for the purposes of the exemption letter. If the department approves the exemption letter application, the exemption letter is valid until the entity is no longer qualified for the exemption letter.

2. Notify the department in writing if the entity no longer qualifies for the exemption letter. Regardless of whether the entity notifies the department as required by this paragraph, if the entity no longer qualifies for the exemption letter, the entity Is liable in an amount equal to any tax, penalty and interest that the seller would have been required to pay under this article if the seller had not been furnished the exemption letter. Payment of the amount under this paragraph exempts the entity from liability for any tax imposed under article 4 of this chapter. The amount shall be treated as tax revenues collected from the seller in order to designate the distribution base for the purposes of section 42-5029.

S. T. For the purposes of this section, "peer-to-peer car sharing program", "shared vehicle owner" and "shared vehicle transaction" have the same meanings prescribed in section 28-9601. END_STATUTE

Sec. 2. Section 42-11104, Arizona Revised Statutes, is amended to read:

START_STATUTE42-11104. Exemption for educational and library property

A. Libraries, colleges, school buildings and other buildings that are used for education, with their furniture, libraries and equipment and the land that is appurtenant to and used with them, are exempt from taxation if they are used for education and not used or held for profit.

B. Property and buildings are exempt from taxation if leased from:

1. A school district pursuant to a lease or lease-purchase agreement under section 15-342, paragraph 9 or 10.

2. A community college district pursuant to a lease or lease-purchase agreement under section 15-1444.

C. Property and buildings, including land, improvements, furniture and equipment, that are owned by a nonprofit organization that is recognized under section 501(c)(3) of the internal revenue code and that operates as:

1. A charter school pursuant to section 15-183 are exempt from taxation beginning on the date the nonprofit organization acquires ownership of the property and buildings if the property and buildings are used for education and are not used or held for profit.

2. A trap and skeet shooting club that teaches, trains, sponsors, coaches or hosts or sponsors clinics, shooting leagues, competitive tournaments or other events, including hunter and firearm safety classes, are exempt from taxation if the property and buildings are used for education purposes and not used or held for profit.

3. A residential treatment and education facility are exempt from taxation beginning on the date the nonprofit organization acquires ownership of the property and buildings if the property and buildings are used for education and are not used or held for profit.

D. Within ten days after receiving an initial affidavit of eligibility submitted under section 42-11152 by a nonprofit organization described under subsection C of this section, the county assessor, on request, shall issue a receipt for the affidavit.

E. If A nonprofit organization described under subsection C of this section files shall file with the assessor the affidavit required by section 42-11152 and evidence of the organization's tax exempt status under section 501(c)(3) of the internal revenue code, the organization is exempt from the requirement of filing subsequent affidavits under section 42-11152 until all or part of the property is conveyed to a new owner or is no longer used for education. At that time the organization shall notify the assessor of the change in writing when initially claiming the exemption.

F. A nonprofit organization described under subsection C of this section that acquires ownership of property that was previously owned by another nonprofit organization and used primarily for education shall comply with the requirements of section 42-11152 to qualify and establish eligibility for exemption.

G. If a nonprofit organization described under subsection C of this section that holds title to property used primarily for education fails to file the affidavit required by section 42-11152 in a timely manner, but otherwise qualifies for exemption, the county board of supervisors, on petition by the organization, shall direct the county treasurer to:

1. Refund any property taxes paid by the organization for a tax year if the organization submits a claim for the refund to the county treasurer within one year after the date the taxes were paid. The county treasurer shall pay the claim within thirty days after it is submitted to the treasurer. The county treasurer is entitled to a credit for the refund in the next accounting period with each taxing jurisdiction to which the tax monies may have been transmitted.

2. Forgive and strike off from the tax roll any property taxes and accrued interest and penalties that are due but not paid. END_STATUTE

Sec. 3. Section 42-11109, Arizona Revised Statutes, is amended to read:

START_STATUTE42-11109. Exemption for religious property; affidavit

A. Property or buildings that are used or held primarily for religious worship, including land, improvements, furniture and equipment, are exempt from taxation if the property is not used or held for profit.

B. Within ten days after receiving an initial affidavit of eligibility submitted under section 42-11152 by a nonprofit organization that owns property used primarily for religious worship, the county assessor, on request, shall issue a receipt for the affidavit.

C. If The organization files shall file with the assessor the affidavit required by section 42-11152 and evidence of the organization's tax exempt status under section 501(c)(3) of the internal revenue code, the organization is exempt from the requirement of filing subsequent affidavits under section 42-11152 until all or part of the property is conveyed to a new owner or is no longer used for religious worship. At that time the organization shall notify the assessor of the change in writing when initially claiming the exemption.

D. A nonprofit organization that obtains title to property that was previously owned by another nonprofit organization and used primarily for religious worship shall comply with the requirements of section 42-11152 to qualify and establish eligibility for exemption.

E. If a nonprofit organization that holds title to property used primarily for religious worship fails to file the affidavit required by section 42-11152 in a timely manner, but otherwise qualifies for exemption, the county board of supervisors, on petition by the organization, shall direct the county treasurer to:

1. Refund any property taxes paid by the organization for a tax year if the organization submits a claim for the refund to the county treasurer within one year after the date the taxes were paid. The county treasurer shall pay the claim within thirty days after it is submitted to the treasurer. The county treasurer is entitled to credit for the refund in the next accounting period with each taxing jurisdiction to which the tax monies may have been transmitted.

2. Forgive and strike off from the tax roll any property taxes and accrued interest and penalties that are due but not paid. END_STATUTE

Sec. 4. Section 42-11110, Arizona Revised Statutes, is amended to read:

START_STATUTE42-11110. Exemption for cemeteries

A. Cemeteries as defined in section 32-2101 that are set apart and used to inter deceased human beings and historic private burial sites and historic private cemeteries as defined in section 41-511.04 are exempt from taxation.

B. The owner of a cemetery, historic private burial site or historic private cemetery shall initially establish qualification for exemption under this section by filing an affidavit with the county assessor under section 42-11152. Thereafter, the owner is not required to file an affidavit under shall notify the county assessor pursuant to section 42-11152 unless if:

1. Any part of the property is no longer, or will not be, used as a cemetery or has been rezoned, and the assessor shall sever that part of the property from the exempt parcel.

2. Any interest in the title to any part of the property is conveyed to a new owner. END_STATUTE

Sec. 5. Section 42-11111, Arizona Revised Statutes, is amended to read:

START_STATUTE42-11111. Exemption for property; widows and widowers; persons with a total and permanent disability; veterans with a disability; definitions

A. The property of widows and widowers, of persons with total and permanent disabilities and of veterans with service or nonservice connected disabilities who are residents of this state is exempt from taxation as provided by article IX, section 2, Constitution of Arizona, and subject to the conditions and limits prescribed by this section.

B. Pursuant to article IX, section 2, subsection F, Constitution of Arizona, the exemptions from taxation under this section are allowed in the amount of:

1. $4,188 if the person's total assessment does not exceed $28,459. For a veteran with a service or nonservice connected disability, the $4,188 limit under this paragraph is further limited by multiplying the total exemption amount by the percentage of the veteran's disability, as rated by the United States department of veterans affairs.

2. No exemption if the person's total assessment exceeds $28,459.

C. On or before December 31 of each year, the department shall increase the following amounts based on the average annual percentage increase, if any, in the GDP price deflator in the two most recent complete state fiscal years:

1. The total allowable exemption amount and the total assessment limit amount under subsection B of this section.

2. The total income limit amounts under subsection E, paragraphs 1 and 2 of this section.

D. For the purpose of determining the amount of the allowable exemption pursuant to subsection B of this section, the person's total assessment shall not include the value of any vehicle that is taxed under title 28, chapter 16, article 3.

E. Pursuant to article IX, section 2, subsection F, Constitution of Arizona, to qualify for this exemption, the total income from all sources of the claimant and the claimant's spouse and the income from all sources of all of the claimant's children who resided with the claimant in the claimant's residence in the year immediately preceding the year for which the claimant applies for the exemption shall not exceed:

1. $34,901 if none of the claimant's children under eighteen years of age resided with the claimant in the claimant's residence.

2. $41,870 if one or more of the claimant's children residing with the claimant in the claimant's residence either:

(a) Were under eighteen years of age.

(b) Had a total and permanent physical or mental disability, as certified by competent medical authority as provided by law.

F. For the purposes of subsection E of this section, "income from all sources" means the sum of the following, excluding the items listed in subsection G of this section:

1. Adjusted gross income as defined by the department.

2. The amount of capital gains excluded from adjusted gross income.

3. Nontaxable strike benefits.

4. Nontaxable interest that is received from the federal government or any of its instrumentalities.

5. Payments that are received from a retirement program and paid by:

(a) This state or any of its political subdivisions.

(b) The United States through any of its agencies, instrumentalities or programs, except as provided in subsection G of this section.

6. The gross amount of any pension or annuity that is not otherwise exempted.

G. Notwithstanding subsection F of this section, income from all sources does not include monies received from:

1. Cash public assistance and relief.

2. Railroad retirement benefits.

3. Payments under the federal social security act (49 Stat. 620).

4. Payments under the unemployment insurance laws of this state.

5. Payments from veterans disability pensions.

6. Workers' compensation payments.

7. Loss of time insurance.

8. Gifts from nongovernmental sources, surplus foods or other relief in kind supplied by a governmental agency.

H. A widow or widower, a person with a total and permanent disability or a veteran with a disability shall initially establish eligibility for exemption under this section by filing an affidavit with the county assessor under section 42-11152 when initially claiming the exemption. Each year thereafter, the person is not required to file an affidavit under section 42-11152, but the person or the person's representative shall annually calculate income from the preceding year to ensure that the person still qualifies for the exemption and shall and notify the county assessor in writing of any event that disqualifies the person from further exemption. Regardless of whether the person or representative notifies the assessor as required by this subsection, the property is subject to tax as provided by law from the date of disqualification, including interest, penalties and proceedings for tax delinquencies. Disqualifying events include:

1. The person's death.

2. The remarriage of a widow or widower.

3. The person's income from all sources exceeding the limits prescribed by subsection E of this section.

4. The conveyance of title to the property to another owner.

I. Any dollar amount of exemption that is unused in a tax year against the limited property value of property and improvements owned by the individual may be applied for the tax year against the value of personal property subject to special property taxes, including the taxes collected pursuant to title 5, chapter 3, article 3 and title 28, chapter 16, article 3.

J. An individual is not entitled to property tax exemptions in the aggregate that exceed the maximum allowed to under more than one category as a widow or widower, a person with a total and permanent disability or a veteran with a disability even if the individual is eligible for an exemption in more than one category.

K. For the purposes of this section:

1. "GDP price deflator" means the average of the four implicit price deflators for the gross domestic product reported by the United States department of commerce or its successor for the four quarters of the state fiscal year.

2. "Veteran" means 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 United States army, navy, air force, marine corps and coast guard.

(b) The commissioned corps of the national oceanic and atmospheric administration.

(d) A nurse in the service of the American red cross or in the army and navy nurse corps.

(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 United States secretary of veterans affairs. END_STATUTE

Sec. 6. Section 42-11131, Arizona Revised Statutes, is amended to read:

START_STATUTE42-11131. Exemption for low-income Indian housing; definitions

A. Property owned and operated by a federally recognized Indian tribe or its tribally designated housing authority is exempt from taxation, subject to the following requirements:

1. The property must be used exclusively for the charitable purpose of providing low income low-income rental housing and related facilities for the use of Indians.

2. The property may not be used, held or operated for profit.

3. No part of the net earnings of the housing authority, if any, may inure to the benefit of any private shareholder or individual.

4. The housing was designed and constructed, in whole or in part, using federal financial assistance pursuant to the Native American Housing assistance and self-determination act of 1996 (P.L. 104-330; 25 United States Code chapter 43) or using tribal government monies.

B. To apply for an initial exemption under this section, an Indian tribe or tribal housing authority must submit the following documents to the county assessor:

1. Documents establishing the federal recognition of the Indian tribe.

2. Documents establishing that the housing authority, if any:

(a) Is formally designated by the tribe for the purposes of owning and operating rental housing facilities for Indians.

(b) Is recognized as a charitable institution pursuant to section 501(c)(3) of the internal revenue code.

3. Legally binding documents that establish a current agreement or other restriction that limits the property’s use to low income low-income rental housing and related facilities for Indians.

C. An Indian tribe or tribal housing authority that submits the documentation required by subsection B of this section for initial tax exempt status is exempt from the requirement of filing subsequent affidavits under section 42-11152 until shall notify the county assessor in writing pursuant to section 42-11152 if the property is conveyed to a new owner or is no longer used for the qualifying purposes under subsection A, paragraph 1 of this section. If any part of the property is conveyed to a new owner or is no longer used for those qualifying purposes, or if any legal or equitable interest in any part of the property is conveyed to a new owner, the tribe or housing authority shall notify the assessor of the change in writing.

D. This section shall not be interpreted to prevent an Indian tribe or tribal housing authority from making voluntary payments in lieu of property taxes to a county, city, town, school district or other political subdivision for providing services, improvements or facilities for the benefit of a low income low-income housing project owned and operated by the tribe or housing authority. Any payments in lieu of tax may not exceed the maximum amount permitted under applicable federal law, if any, or the estimated cost to the county, city, town, school district or other political subdivision of the services, improvements or facilities to be provided, whichever is less.

E. For the purposes of this section:

1. "Indian" has the same meaning prescribed in 25 United States Code section 4103.

2. "Indian tribe" has the same meaning prescribed in 25 United States Code section 4103.

3. "Low income Low-income rental housing" means housing for individuals or families having an income that does not exceed the income for a low income low-income family, as defined in 25 United States Code section 4103.

4. "Related facilities" means nonhousing facilities that are located on the low income low-income housing property and that are available for the use of Indian tenants in conjunction with their use of the housing facilities. END_STATUTE

Sec. 7. Section 42-11132, Arizona Revised Statutes, is amended to read:

START_STATUTE42-11132. Property leased to educational institutions

A. Property, buildings and fixtures that are leased to a nonprofit charter school or a residential treatment and education facility and that are used for educational instruction in any grade or program through grade twelve shall be classified as class nine property pursuant to section 42-12009. If only part of a parcel of real property or improvements to real property is leased for operation of a charter school or a residential treatment and education facility, only the portion so leased qualifies as class nine property.

B. Property, buildings and fixtures that are owned by an educational, a religious or a charitable organization, institution or association and leased to a nonprofit educational organization, institution or association are exempt from taxation if the property is used for educational instruction in any grade or program through grade twelve.

C. If the educational, religious or charitable organization, institution or association that owns the property files the affidavit required by section 42-11152, evidence of the organization's, institution's or association's tax exempt status under section 501(c)(3) of the internal revenue code and an affidavit by the educational organization, institution or association that it uses the property for educational instruction as described in subsection B of this section, the property qualifies for the tax exemption under this section. and is exempt from the requirement of filing subsequent affidavits under The educational, religious or charitable organization, institution or association shall notify the county assessor in writing pursuant to section 42-11152 until if all or part of the property is conveyed to a new owner or is no longer used for educational purposes. At that time the educational, religious or charitable organization, institution or association must notify the assessor of the change in writing. END_STATUTE

Sec. 8. Section 42-11132.01, Arizona Revised Statutes, is amended to read:

START_STATUTE42-11132.01. Property leased to a church, religious assembly or religious institution

A. Property, buildings and fixtures that are leased to a nonprofit church, religious assembly or religious institution and that are primarily used or held for religious worship shall be classified as class nine property pursuant to section 42-12009. If only part of the parcel or improvements is leased to a nonprofit church, religious assembly or religious institution and primarily used or held for religious worship, only the portion so leased qualifies as class nine property. To qualify under this subsection, the church, religious assembly or institution must annually file with the assessor an affidavit that it:

1. Continues to use or hold the property primarily for religious worship.

2. Is the sole economic beneficiary of the classification of the property as class nine pursuant to section 42-12009, subsection A, paragraph 5.

B. Property, buildings and fixtures that are owned by an educational, religious or charitable organization, institution or association, that are leased to a nonprofit church, religious assembly or religious institution and that are primarily used or held for religious worship are exempt from taxation.

C. If the educational, religious or charitable organization, institution or association that owns the property files with the assessor the affidavit required by section 42-11152, evidence of the organization's tax exempt status under section 501(c)(3) of the internal revenue code and an affidavit by the nonprofit church, religious assembly or religious institution that it uses or holds the property primarily for religious worship as described in subsection B of this section, the property qualifies for the tax exemption under this section. and is exempt from the requirement of filing subsequent affidavits under The educational, religious or charitable organization, institution or association shall notify the county assessor in writing pursuant to section 42-11152 until if all or part of the property is conveyed to a new owner or is no longer primarily used or held by the church, assembly or institution. At that time the educational, religious or charitable organization, institution or association must notify the assessor of the change in writing. END_STATUTE

Sec. 9. Section 42-11132.02, Arizona Revised Statutes, is amended to read:

START_STATUTE42-11132.02. Property leased to veterans' organization; definition

A. Property, buildings and fixtures that are leased to a veterans' organization shall be classified as class nine property pursuant to section 42-12009. If only part of the parcel or improvements is leased to a veterans' organization and primarily used or held for the operations of the veterans' organization operations, only the portion so leased qualifies as class nine property. To qualify under this subsection, the veterans' organization must annually file with the assessor an affidavit that it:

1. Continues to use or hold the property primarily for the operations of the veterans' organization operations.

2. Is the sole economic beneficiary of the classification of the property as class nine pursuant to section 42-12009, subsection A, paragraph 6.

B. Property, buildings and fixtures that are owned by a veterans' organization, that are leased to a veterans' organization and that are primarily used for the operations of the veterans' organization operations are exempt from taxation.

C. If the veterans' organization that owns the property files with the assessor the affidavit required by section 42-11152, evidence of the veterans' organization's tax-exempt status under section 501(c)(3) or 501(c)(19) of the internal revenue code and an affidavit by the veterans' organization that it uses or holds the property primarily for the operations of the veterans' organization operations as described in subsection B of this section, the property qualifies for the tax exemption under this section. and is exempt from the requirement of filing subsequent affidavits under The veterans' organization shall notify the county assessor in writing pursuant to section 42-11152 until if all or part of the property is conveyed to a new owner or is no longer primarily used or held by the veterans' organization. At that time the veterans' organization shall notify the assessor of the change in writing.

D. For the purposes of this section, "veterans' organization" means a United States veterans' organization that qualifies as a charitable organization and that is recognized under section 501(c)(3) or 501(c)(19) of the internal revenue code. END_STATUTE

Sec. 10. Section 42-11152, Arizona Revised Statutes, is amended to read:

START_STATUTE42-11152. Affidavit; electronic submission; acknowledgment of receipt; false statements

A. Except as provided in sections 42-11104, 42-11109, 42-11110, 42-11111 and 42-11131 and except for property described in sections 42-11125, and 42-11127, 42-11132, 42-11132.01 and 42-11132.02, a person who claims exemption from taxation under article IX, section 2, Constitution of Arizona, shall:

1. When initially claiming the exemption and claiming the exemption in subsequent years, file an affidavit with the county assessor, signed under penalty of perjury, as to the person's eligibility.

2. Fully answer all questions on the eligibility form or otherwise required by the assessor for that purpose.

3. Notify the county assessor in writing if all or part of the property is conveyed to a new owner, the property is no longer used for the purpose that qualifies the property for the exemption or there is any event that otherwise disqualifies the person or property from the exemption.

B. At the assessor's discretion, the assessor may require additional proof of the facts stated by the person before allowing an exemption.

C. The county assessor may accept affidavits required by this section electronically. If the county assessor accepts electronic affidavits, the county assessor shall provide an electronic acknowledgement acknowledgment of receipt to the person who submitted the affidavit.

D. A false statement that is made in the affidavit is perjury. END_STATUTE

Sec. 11. Section 42-11153, Arizona Revised Statutes, is amended to read:

START_STATUTE42-11153. Deadline for filing affidavit

A. Except as provided in section 42-11104, subsection E, section 42-11109, subsection B, section 42-11110, subsection B, section 42-11111, subsection H, section 42-11131, subsection C and section 42-11132, subsection C, section 42-11132.01, subsection C, and section 42-11132.02, subsection C, A failure by a taxpayer who is entitled to an exemption to make an initial affidavit as required by section 42-11152 or furnish evidence required by this article between the first Monday in January and March 1 of each the year constitutes a waiver of the exemption.

B. If a widow or widower or a person with a disability whose property is exempt from tax under section 42-11111, or an organization that is exempt from federal income tax under section 501(c) of the internal revenue code and is exempt from property tax under article 3 of this chapter, submits a petition after the deadlines prescribed by subsection A of this section, the person or organization may have the waiver redeemed by the county board of supervisors at any regular meeting, except that taxes that were due and payable before the petition was submitted may not be refunded or abated. END_STATUTE

Sec. 12. Applicability

This act applies to tax years beginning from and after December 31, 2023.