ARIZONA HOUSE OF REPRESENTATIVES Fifty-sixth Legislature First Regular Session
	Senate: FIN DPA 7-0-0-0 | 3rd Read 16-13-1-0

---

SB 1230: tax exemptions; affidavit

Sponsor: Senator Mesnard, LD 13

Committee on Ways & Means

Overview

Provides procedures for a qualifying health community center, qualifying health care organization, hospital or other nonprofit entities to obtain an exemption letter for transaction privilege tax purposes and outlines requirements regarding property tax exemption for various entities.

History

In current statute, Arizona does not provide an overall exemption from transaction privilege tax for nonprofit organizations. Some organizations that qualify as nonprofit organizations must apply for an annual exemption letter from the Arizona Department of Revenue (DOR). These organizations include qualifying hospitals, qualifying health care organizations and qualifying health care community centers. (azdor.gov)

Current statute exempts nonprofit organizations, religious organizations, widows, widowers, people with a permanent disability, veterans with a permanent disability and educational, religious or charitable organizations, institutions or associations from the requirement of filing affidavits until all or part of the property is conveyed to a new owner or is no longer used for its qualifying purposes. Once the entity is no longer used for its exemption qualifying purposes, they must notify the assessor of the change in writing. (A.R.S. § 42 – 11104) (A.R.S. § 42 - 11109) (A.R.S. § 42 - 11111) (A.R.S. § 42 - 11132)

For cemeteries, historic private burial sites, historic private cemeteries, Indian tribes or tribal authorities, educational, religious or charitable organizations, institutions or associations as well as veterans' organizations current statute states that they must file an affidavit establishing their qualification for exemption and are not required to file an affidavit thereafter unless any part of the property is being used for non-qualifying exemption purposes or any part of the property is conveyed to a new owner. (A.R.S. § 42 – 11110) (A.R.S. § 42 - 11131) (A.R.S. § 42 - 11132) (A.R.S. § 42 – 11132.02)

Provisions

1. Outlines procedures for qualifying community health centers, qualifying health care organizations, hospitals or other nonprofit entities to obtain an exemption letter for transaction privilege tax purposes from the DOR. (Sec. 1)

2. Specifies that an exemption letter is valid until the entity no longer qualifies. (Sec. 1)

3. Requires that entities that no longer qualify for an exemption letter notify the department. (Sec. 1)

4. States that if an entity no longer qualifies for an exemption letter, they are liable in an amount equal to any tax, penalties and interest that the seller would have been required to pay if the seller had not been furnished the exemption letter. (Sec. 1)

5. Requires the following to file an affidavit with the county assessor when initially claiming their tax exemption:

a) Nonprofit organizations; (Sec. 2)

b) Religious organizations; (Sec. 3)

c) A widow, widower, person with a permanent disability or veteran with a permanent disability; and (Sec. 5)

d) Educational, religious or charitable organization, institution or association. (Sec. 7)

6. Requires the following to notify the county assessor if any part of their property is being used for non-qualifying exemption purposes or any part of the property is conveyed to a new owner:

a) Cemeteries; (Sec. 4)

b) Indian tribe or tribal housing authority; (Sec. 6)

c) Educational, religious or charitable organization, institution or association; and (Sec. 7)

d) Veterans' organization. (Sec. 9)

7. Makes technical changes. (Sec. 2,3,4,5,6,7,8,9,10,11)

8. Makes conforming changes. (Sec. 1)

---------- DOCUMENT FOOTER ---------

                        SB 1230

Initials VP/AA  Page 0 Ways & Means

---------- DOCUMENT FOOTER ---------