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ARIZONA STATE SENATE
Fifty-Sixth Legislature, First Regular Session
tax exemptions; affidavit
Purpose
Modifies administration and requirements relating to property tax exemption eligibility affidavits (eligibility affidavit).
Background
All property in Arizona is subject to taxation with certain exceptions. The Arizona Department of Revenue (ADOR) prescribes the procedure, affidavits and forms that effectuate property tax exemptions. Certain property that is not used or held for profit is exempt from property tax, including: 1) educational and library property; 2) religious property; 3) cemeteries; and 4) low-income property owned and operated by an Indian tribe or tribal housing authority. Certain property used for educational or religious purposes and property leased to veterans' organizations is exempt from property tax if the property is used for the exempted purpose (A.R.S. § 42-11132; 42-11132.01; and 42-11132.02).
A person that claims a property tax exemption must file an eligibility
affidavit with the county assessor when initially claiming the exemption and
when claiming the exemption in subsequent years. If outlined 501(c)3 nonprofit
organizations (nonprofit) file with the county assessor evidence of the
organization's tax-exempt status, the organization is exempt from the
requirement of filing subsequent eligibility affidavits until all or part of
the property is conveyed to a new owner or is no longer used for the exempted
purpose. At that time the organization must notify the assessor of the change
in writing (A.R.S. Title
42, Chapter 11). If a person does not file an eligibility affidavit or
furnish evidence between the first Monday in January and March 1 of each year,
the person waives the right to a property tax exemption (A.R.S. § 42-11152
and
42-11153).
The property of Arizona residents who are widows, widowers, persons with disabilities or veterans with a service or nonservice-connected disability is exempt from property tax subject to the conditions and limitations prescribed by statute. To establish eligibility for the exemption, the individual must file an eligibility affidavit with the county assessor but is not required to file subsequent affidavits. The individual must notify the county assessor of any event that disqualifies the person from further exemption (A.R.S. § 42-11111).
There is no anticipated fiscal impact to the state General Fund associated with this legislation.
Provisions
Property Tax Eligibility Affidavits
1. Removes the requirement for a nonprofit to file annual eligibility affidavits with the county assessor for the following types of property:
a) educational and library property;
b) religious property; and
c) low-income Indian housing.
2. Requires a nonprofit to file evidence of the nonprofit's tax-exempt status with the county assessor, rather than allowing the nonprofit to file the evidence with the county assessor to be exempt from the requirement to file subsequent annual eligibility affidavits.
3. Requires the following to notify the county assessor in writing if there is any event that disqualifies the person or property from the exemption:
a) a nonprofit;
b) the owner of a cemetery, historic private burial site or historic private cemetery;
c) an Indian tribe or tribal housing authority;
d) an educational, religious or charitable organization that owns property that is leased to an educational institution;
e) an educational, religious or charitable organization that owns property leased to a church, religious assembly or religious institution; and
f) a veterans' organization that owns property leased to a veterans' organization.
4. Requires a widow or widower, person with a total and permanent disability, veteran with a disability, or the person's representative, to file an eligibility affidavit annually with the county assessor.
Exemption Letter
5. Allows a qualified hospital that applies to renew the hospital's exemption letter at least 30 business days before the current exemption letter expires to continue to use the prior year exemption letter after expiration until ADOR approves or denies the renewal application.
6. Holds a qualified hospital liable, if the renewal application is denied, in an amount equal to any tax, penalty and interest that the seller would have been required to pay if the seller had not been furnished the exemption letter.
7. Exempts the qualified hospital from liability for any imposed use tax with payment of the amount due after the denial of a renewal application.
8. Requires the amount paid by the qualified hospital to be treated as tax revenues collected from the seller in order to designate the distribution base for purposes of remission and distribution of TPT revenues.
Miscellaneous
9. Applies eligibility affidavit filing requirements to taxable periods beginning January 1, 2024.
10. Makes technical and conforming changes.
11. Becomes effective on the general effective date.
Prepared by Senate Research
February 2, 2023
MG/MC/sr