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How is the value of property assessed for tax purposes in your state? Which types of property are subject to tax?
All real estate, improvements to real estate, and personal property are taxable unless otherwise exempted by the Arizona Constitution or by statute.
In Arizona, county assessors annually determine the full cash value of all property within a county that is subject to taxation. The Arizona Department of Revenue is responsible for determining the full cash value of centrally assessed properties such as:
- oil, gas, and geothermal properties;
- gas, water, and electric utilities;
- railroads; and
- telecommunication companies.
Arizona has two values for property tax purposes: the full cash value and the limited property value. ‘Full cash value’ means the value determined by statute. If no statutory method is prescribed, which is the case for almost all property, full cash value is synonymous with market value. Property is valued based on market value subject to current use, not highest and best use. In cases where a statutory method is prescribed to determine value for property tax purposes, the full cash value cannot be greater than the market value.
The limited property value (LPV) is the value that is most important to locally assessed taxpayers. Property taxes are calculated only from the LPV. While the full cash value varies each year, depending on market conditions, the LPV is determined by a statutory formula based on a property’s LPV from the prior tax year. LPV is limited to annual increases of no more than 5%. Sales of property do not affect the limitation on the LPV. However, certain changes, such as new constructions or additions, parcel splits or consolidations, or changes to a property’s use trigger a reassessment of the LPV.
What is the state property tax rate?
Arizona does not have a state property tax rate.
What is the range of local property tax rates levied in your state?
In Arizona, tax rates are determined in each county for each tax district. Tax rates vary within a county and among tax districts within a county.
Table 4. Average tax rates by Arizona county for tax year 2018
Exemptions and deductions
What exemptions and deductions are available?
Article 9, Section 2 of the Arizona Constitution outlines the categories of property and persons who qualify for exemption from property tax. Arizona, like most states, exempts all federal, state, county, and municipal property, as well as property of educational, charitable, and religious associations or institutions not used or held for profit. The Constitution also exempts from property tax all household goods, cemeteries, and personal property used for agricultural purposes or business purposes up to a certain amount, as well as property of disabled veterans and widows and widowers who meet certain criteria.
By statute, Arizona exempts 32 categories of property, including property owned by non-profits such as:
- educational institutions;
- volunteer fire departments;
- fraternal societies;
- veteran’s organizations; and
- organizations established to preserve and protect scientific resources.
What filing requirements and procedures apply?
A taxpayer may choose to file an administrative or a judicial appeal.
If a taxpayer elects to file an administrative appeal, it must be filed with a county assessor no later than 60 days from the notice of value’s mailing date in February. A taxpayer dissatisfied with a county assessor’s determination of its appeal may file an appeal within 25 days of the mailing of the assessor’s decision to the state board of equalization in Maricopa County or Pima County or to the county board of equalization in all other counties.
A taxpayer dissatisfied with the administrative appeals process may appeal directly to the Arizona Tax Court within 60 days of the last administrative decision.
A taxpayer may skip the administrative process entirely and file a judicial appeal anytime before December 15 of the valuation year.
Real estate transfer tax
How is the transfer of real estate taxed in your state (including tax base, rates, exemptions, and filing formalities)?
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