Tax & Accounting Blog

Arizona Rulings, Relief and Revised Processes

Blog, ONESOURCE, ONESOURCE Property Tax July 31, 2013

Arizona legislature has recently passed two bills on class six property extensions and revised valuation processes, and the state Attorney General has declared a tax relief bill unconstitutional.

Attorney General Declares H2178 Unconstitutional

In 2012 the Arizona Legislature enacted H2178, a bill that granted tax relief to land owners on or near the Fort Mojave Indian Reservation. These property owners had been challenged by the United States and the Fort Mojave Indian tribe from 1987 until the matter was settled in the property owners’ favor in 2009. H2178 ordered the county treasurer to refund paid taxes during 1987-2009 to the landowners.  Last week Arizona Attorney General Tom Horne repudiated H2178, saying it was unconstitutional because it gives tax benefits to a handful of landowners in a special circumstance but does not compensate other landowners who previously or currently experience the same issues.

To view the briefing, visit https://www.azag.gov/sites/default/files/sites/all/docs/Opinions/2013/I13-004.pdf.

Tax Cut Extensions for Biodiesel and Biofuel

Effective  09/13/2013, among other things, S1179 makes the following three rulings on biodiesel fuel property:

1. Real and personal property improvements used to make motor vehicle biofuel and its by-products are classified as class six property until December 31, 2023.

2. “Motor vehicle biofuel” is defined as fuel developed from biological material produced for motor vehicle use (excluding organic material that has been changed by geological methods into substances like  coal or petroleum), and any additives must comply with federal and state laws.

3. Class six property classification for real and personal property improvements used to make 100% biodiesel fuel and its byproducts is extended from December 31, 2016 to December 31, 2023.

To view the engrossed bill, visit http://www.azleg.gov//FormatDocument.asp?inDoc=/legtext/51leg/1r/laws/0236.htm&Session_ID=110.

New Valuation Process for Electric Distribution Co-ops

ADOR outlines a new process for determining the value of electric distribution and transmission property, which is centrally assessed in Arizona. These distribution cooperatives are non-profit, member-owned electric utilities providing services in rural areas. The valuation process includes the ADOR calculating the value of the property according to Ariz. Rev. Stat. Ann. § 42-14154 and then multiplying that value by the standard market value factor. This new process takes place effective 12/13/2013.

For more information, visit http://www.azcapitolreports.com/viewhtm.cfm?id=185430.