The Property Tax System in Arizona

A Guide for Legislators

By Tonia A. Tunnell
Arizona Association of Counties
1910 West Jefferson, Phoenix, Arizona 85009
(602) 252-6563 (602) 254-0969 fax

Introduction

There are many different ways to raise revenue in the state of Arizona. Taxes may be imposed on income, property or transactions (often referred to as a sales tax). Additionally there are specialized taxes such as taxes on gasoline or tobacco, or the vehicle licensing tax (VLT); users fees, such as park entrance fees; regulatory fees, and surcharges.

This pamphlet will focus on property taxes in Arizona. It will explain the different kinds of property, how it is valued, assessed and taxed, as well as the processes for tax appeals, what happens if taxes are not paid, what is known as Truth in Taxation, and the Property Tax Oversight Commission. It will also include indexes of the different classifications of property, what property is exempt from taxation, and a glossary of terms commonly used when discussing property taxes.

In Arizona, property taxes are used to help fund the government services of counties, cities and towns, school districts, fire districts, flood control districts, and other special districts allowed under Title 48. For example, counties use their portion of property taxes to pay for County services such as the Superior Court system and the Sheriff's Office. Public safety and health, transportation, and emergency services in counties are funded using property taxes.

The Arizona Constitution requires that taxes be uniform, and that the power to tax may not be contracted away (Article 9, Section 1). Property tax statutes are generally contained in Arizona Revised Statutes Title 42, but Titles 11, 15, 33 and 48 also contain provisions relating to property tax. The fundamental elements of Arizona's existing system, including primary and secondary taxation, limited values, primary levy limits and the 1% primary tax limitation for homeowners (all to be explained below) were established by the 1980 Tax Reform Act. This act was adopted by voters as an alternative to Proposition 106, which was similar to Proposition 13 in California.

The Department of Revenue and Counties work together to implement property tax statutes. The Department has general supervisory authority over County Assessors in administering the property tax laws to ensure that all property is uniformly valued for property tax purposes. Additionally, the Department contracts with counties, often referred to as as client counties (all counties except Maricopa and Pima), to process their data and print Notices of Value and/or tax bills.

Property in Arizona

Categories of Property

There are two categories of property for the purpose of taxation in Arizona, real property and personal property. Real property is defined as land and all improvements permanently affixed or attached to the land, including homes, buildings, canals, etc. Personal property is defined as all other property that is not permanently affixed to land, including business equipment and inventory, boats, computers, furniture, vehicles and an individual's personal possessions. Mobile homes are special cases that can be considered real or personal, depending on certain conditions, and will be discussed later.

Additionally, there are two ways that properties are valued in Arizona. Most properties are identified and valued by the County Assessor. These properties are known as locally valued properties. Other properties, including those of operating mines, utilities, pipelines, railroads, oil, gas and geothermal interests, airline, aviation fuel delivery, private car and telecommunication companies, are valued by the Department of Revenue. These properties are known as centrally valued properties.

Regardless of whether personal or real, locally or centrally valued, there is a process that all property goes through in order to be taxed. Generally stated, property is identified as belonging on the tax roll, valued, assessed and after the tax rate is set, the tax bill is determined.

The Role of the County Assessor - Identify, Value, and Assess

Identification of Property

It is the County Assessor's job to identify all property subject to taxation, determine who owns the property and determine the property's value(§42-13051). This is done by examining recorded documents, inspections in the field, the review of building permits and required filings of business property renditions, auditing or other similar means. Every structure's use is identified and the property is measured. The quality and type of building and construction materials from the foundation to the roof are graded according to quality. Lots are reviewed and compared for size, shape, topography and external influences.

Exemptions from Property Tax

Because of the way tax statutes are structured in Arizona, all property is considered taxable unless specifically exempted. Additionally, certain individuals, such as widows and disabled persons may file for exemptions, or partial exemptions, if they are within qualifying income levels. Title 42, Chapter 11, Article 3 specifically exempts a list of properties and individuals that are not subject to taxation. However, because they represent exceptions to the Constitutional requirement of uniformity, tax exemptions must be strictly construed (City of Phoenix v. Bowles, 1947). Therefore, individuals must apply with the Assessor to ensure that their property qualifies for the exemption. See Appendix A for the list of exemptions.

Valuation of Real Property

The County Assessor is mandated by statute to value real property to determine what it is worth on the market using standard appraisal methods and techniques. As prescribed by § 42-11054(B), current use is utilized instead of "highest and best use" as the standard for value appraisal. Therefore, how a property is used today will determine its value.

There are three methods of appraising value. The sales comparison method, which is also known as market, compares property to other similar properties that have recently been sold. This method is used mostly for homes and land. The replacement cost less depreciation method is based on how much it would take at today's material and labor costs to replace the property with a similar structure. This method is used mostly for commercial buildings or homes that are not typical or are located in a remote area. Finally, the income method is based on the income potential of the property. Using operating income and expense data supplied by the owner, the value is determined by capitalizing the potential net income. All three methods are considered by the Department of Revenue to be valid methods for appraising value and it is up to the Assessor to determine the most appropriate method for any given property.

Certain properties, however, are valued using a prescribed method determined by statute. Golf courses, shopping centers, qualified residential common areas, property of manufacturers, assemblers or fabricators, timeshare properties and agricultural land are valued using the methods specified in statute (ARS Title 42, Chapter 13, Articles 3,4,5,8,9,and 10).

Additionally, centrally valued properties, properties that typically cross county lines and whose value is determined by the Arizona Department of Revenue, are also valued using prescribed methods determined by statute (ARS Title 42, Chapter 14).

Personal Property Valuation

For property tax purposes in Arizona, personal property is defined as all types of property except land, buildings or other real property improvements. Taxable business personal property includes all assets used in the operation of a business, farm, ranch or residential rental activity above $55,465 for 2003 (this amount is increase by an inflation factor every year). Every year, business property owners are required to file statements listing personal property that has been acquired or disposed of during the year and confirming personal property items still on the tax roll (§42-15053). It is from these statements and audits by the Assessor that the value of the personal property is derived.

Valuation of Mobile Homes

Manufactured Housing - mobile homes as they are still known in statute- is a special case, and may be treated as real or personal property, depending on whether or not the home is affixed to real property that is owned by the same person. If the mobile home is affixed to real property that is owned by the same person, it is considered real property. If the mobile home is located in a mobile home park or located on leased property, it is considered personal property. In both cases, the mobile home is valued by taking the original factory list price, adding any value added by improvements (such as air conditioners, room additions, etc.) and subtracting a depreciation factor based on age. The procedures for calculating these factors are prescribed by regulations by the Department of Revenue.

Full Cash Value vs. Limited Property Value

The Assessor, using the standard valuation methods described above, determines what is called the full cash value of the property. This value is used when determining how much taxes are due on Secondary property taxes, such as those for special districts, fire districts, school districts, bond issues, and bond overrides. There is no limit on the growth rate of this value and it fluctuates from year to year with the market.

For primary taxes, such as those for counties, cities, towns, and community college districts, the limited cash value is used. The limited value of property is determined by taking the limited property value of the property in the preceding valuation year plus the greater of either:

10% of that value, or

25% of the difference between the full cash value of the parcel in the current valuation year and the limited value of the parcel in the preceding valuation year (§42-13301).

Under no circumstances may the limited value of property ever exceed its current full cash value. However, if the property has changed in usage, has experienced new construction, or there was an error in assessment during previous years, the Assessor then determines the limited value at an amount equivalent to other properties with similar characteristics. Under these circumstances the value could exceed the computation above (§42-13302).

Assessed Valuation

Now that the Assessor has identified the property and its use, and determined its full cash value, the property's assessed valuation can be determined using a statutory formula. Statutes prescribe a percentage rate of a property's value depending on the property's use (see table). The full cash value is multiplied by the assessment percentage (referred to as the assessment ratio) to get the net assessed value. Similarly, the limited cash value is multiplied by the assessment ratio to get the limited net assessed value. This is important because it is the assessed value that is applied to the tax rates to create taxes due, as will be explained further below.

Notice of Value

On or before March 1 of each year, the Assessor is required to mail property owners a notice stating the property's full cash value and the limited property value, if applicable, to be used for assessment purposes for the next tax year. This Notice of Value is not the tax bill, but a document that contains information about the property and its value, which will be used to determine the taxes owed on the property in the coming tax year. For example, the Notice of Value received in March 2003 will be used for the 2004 tax year.

Appealing a Property Valuation

While property values are determined using professional appraisal methods and techniques, an appraisal is only an opinion of value. For this reason, every property owner has the right to challenge the Assessor's valuation of a property if it is the owner's opinion that it has been valued too high or otherwise improperly valued or listed on the roll.

Petition to Assessor

After the Assessor has mailed property owners a Notice of Value, property owners have 60 days from the printed notice date to file a petition to review their property value with the Assessor by filing a DOR 82130 form with the Assessor (§42-16051). The Assessor must answer all petition requests by August 15 (§42-16055). If the Assessor agrees with the property owner's claim, or explains the value to the owner's satisfaction, the petition is terminated.

Appeal to Boards of Equalization

If a property owner's petition is denied in whole or in part by the Assessor, the property owner has 25 days after the Assessor's decision to appeal to the County Board of Equalization, if the property is located in a rural county, or the State Board of Equalization, if the property is located in Maricopa or Pima counties (§42-16056). In rural counties, the Board of Supervisors sit as the County Board of Equalization. The County Board of Equalization may, by a majority vote, contract with the State Board of Equalization to perform review of petitions.

The State Board of Equalization is made up of specialists in the area of property tax that are appointed by the counties and the Governor. The Boards of Equalization hold hearings and must rule on all locally valued property appeals by October 15 and all centrally valued property appeals by November 15. The Assessor must make the necessary changes in the tax roll and records to reflect the board of equalization's determination.

Appeal to Court

If a property owner is still dissatisfied, he or she has 60 days from the date of the mailing of the Board of Equalization's decision, but before December 15, to appeal to tax court. In addition to appealing to the County Assessor and/or the appropriate Board of Equalization, a property owner may appeal directly to tax court without going first to the Assessor or Boards of Equalization, as long as they do so before December 15 (ARS title 42, Chapter 16, Article 5).

The Board of Supervisors - Tax Rolls, Budgets and Setting the Tax Rate

Now that values for all property have been established in the county and most appeals have been settled, this information can be used to help determine budgets and the tax rate for all political subdivisions within the county. To do this, the Assessor completes the assessment roll and transmits this information to the Board of Supervisors and the Clerk of the Board by December 20 of the valuation year (§42-15153). By January 20, the Clerk of the Board makes an abstract of the roll containing the valuations by taxing jurisdictions of all property in the county including personal property (§42-15155). Before April 30, the Department of Revenue prepares a statewide abstract containing the valuation by county and taxing jurisdiction of all property that is subject to property taxation in this state and transmits copies to the state or county board of equalization, as appropriate, and each county board of supervisors (§42-15156).

Primary Taxes vs. Secondary Taxes

There are two types of property taxes in Arizona. Primary property taxes, calculated using the limited cash value, are levied by counties, municipalities, community colleges, and school districts for annual maintenance and operations purposes. These taxes are limited by an overall limit on the amount levied by all jurisdictions. Additionally, there is a limit on how much taxes can be imposed on homeowners (see below). Secondary taxes, calculated using the full cash value, are levied to pay for special districts, fire districts, bond issues, and bond overrides.

Primary Property Tax Levy Limits

There is a limit on the aggregate amount of primary property taxes that county, cities, towns and community college districts can impose in any given year, which is established by the Arizona Constitution (Article 9, section 19). The limit grows by 2% each year plus new construction. The limit is calculated using a formula as follows:

Primary Property Assessed Value for

Tax Levy Limit X 1.02 ÷ current year for ÷ 100 = Allowable Tax Rate

Last year all Property

Finally Equalized Maximum Allowable Primary

Valuation including - Exemptions X Allowable Tax Rate = Property Tax Levy Limit

Personal Propertyfor Current Year for 100 all Political Subdivisions.

This levy limit is further reduced if the amount of taxes collected the previous year was above the allowable levy limit for that year, or if a county exceeded its expenditure limit. (§42-17051)

Homeowner Tax limit and Homeowners Rebate

Article 9, section 18 of the Arizona Constitution limits the amount of primary taxes from all taxing jurisdictions on owner-occupied homes to 1% of the property's full cash value. Typically, the total primary taxes for homeowners stays below this level, in part because the state pays 35% of the school district primary rate that is imposed on homeowners. Often referred to as the "homeowner rebate," this amount is paid as additional state aid for education above and beyond the State aid for equalization assistance for education determined by §15-971. Additionally, in cases where primary taxes would still exceed the 1% of the property's full cash value because of school district taxes, a credit is given to the homeowner for that amount and that amount of the school district taxes are paid by the state as additional state aid to education. (§15-972)

Property Tax Oversight Commission

In 1997, the Property Tax Oversight Commission was established to provide a uniform methodology for determining property tax limitations, to further public confidence in the limitations, and to provide for a continuing review of practices for ensuring a fair and equitable administration of the property tax laws. It is made up of five individuals knowledgeable in the area of property tax assessment and levy, including the Director of the Department of Revenue, who serves as the chairman.

On or before February 10, the Assessor gives the governing body of every political subdivision or district in the county, as well as the Property Tax Oversight Commission, the assessed values of property for their area in order to compute the levy limits, as well as a worksheet that imposes the allowable primary property tax. The city, town or community college district then has 3 days to notify the Commission as to whether or not they agree with the worksheet. The political subdivisions then make the values available to the public (§42-17055).

Establishing the Budget

On or before the 3^rd Monday in July, each county, city and town prepares a budget, which includes a list of specific line items including an estimate of the amount needed for county, city or town purposes, to pay outstanding bonds, for unanticipated contingencies, and the amounts estimated to be received property taxes and other sources (§42-17102). The Governing Body publishes these estimates in the local newspaper and holds hearings to listen to the views of taxpayers.

Truth in Taxation

If the political subdivision's proposed primary property tax levy, excluding amounts that are attributable to new growth and construction, is greater than the amount levied the previous year, the governing body must publish Truth in Taxation notices in the county and hold a truth in taxation hearing. This hearing may be combined with the general hearing on the budget, but must be noticed separately and in a specific manner telling taxpayers that they intend to raise its primary property taxes over last year's level (§42-17107). However, while they may increase property taxes, political subdivisions still may not exceed their levy limit.

Establishing the Tax Rate

After holding hearings to listen to the views of taxpayer, but before the 3^rd Monday in August, the governing body of each county, city, town, community college district and school district must fix, levy and assess the amount to be raised from primary property taxation and secondary property taxation, which must equal the amount proposed to be spent in their budget. From this amount, they must determine the property tax rates for primary and secondary taxes rounded to four decimal places on each $100 of taxable property shown on the tax rolls for the fiscal year.

Before the Board of Supervisors levies the county tax, each city, town and community college district in the county deliver a certified duplicate of its tax levy. The resolution by the Board of Supervisors authorizing the collection of taxes also includes city, town and community college taxes and the Treasurer collects these taxes in the same manner as county taxes (§42-17254).

If for any reason a political subdivision exceeds its levy limit, the Property Tax Oversight Commission notifies the political subdivision of this occurrence. If the political subdivision disputes the Commissions finding, the Commission must conduct a hearing before October 1. If the dispute is resolved at the hearing, the Commission notifies the Board of Supervisors immediately of the proper tax levy and rate and the Supervisors are obliged to modify their levy and rate accordingly. However, if the dispute continues, an appeal may be made to tax court within 30 days of the Commissions decision and the political subdivision may levy taxes in the amount that it considers proper until the outcome of the appeal. However, if the court finds that the levy limits were less than those imposed by the political subdivision, the difference in the amounts must be placed in a separate fund to be used to reduce the property taxes levied in the following year.

County Treasurer - Collection, Disbursement and Tax Liens

The County Treasurer is the ex-officio tax collector and is responsible for collecting all property taxes and apportioning them to the respective funds (§42-18001). After the County Board of Supervisors and the governing boards of political subdivisions within the county determines their budgets for the year and set the tax rates, the amount of taxes owed by each property owner is calculated and sent to the County Treasurer on what is called a tax roll. Attached to the tax roll is a resolution calling for the collection of taxes by the County Treasurer "as provided by law from the persons who are listed in the roll" (§42-18003). As previously stated, the Treasurer collects taxes for cities, towns and community college districts in the same manner as county taxes. On the 15^th of every month the County Treasurer disburses to each city, town and community college treasurer all money collected the previous month for that jurisdiction (§42-17255). The taxes for these jurisdictions become due and delinquent at the same times as county taxes (§42-17256).

Payment of Property Taxes

Immediately upon receiving the tax roll, the Treasurer publishes an official notice in a newspaper circulated in the county stating that the roll is now in the Treasurer's possession for collecting the taxes and that the taxes are due and payable (§42-18051). There is no statutory requirement for the County Treasurer to send a tax bill. In fact, §42-18051(C) specifically states that other than the official notice, no other demand for taxes is necessary. Often Mortgage companies will pay the taxes for a property owner out of an impound account. While this is a convenience for the property owner, the liability for the tax does not depend on either the mortgagor or mortgagee receiving a tax statement.

Delinquent Personal Property Taxes

Personal property taxes that exceed $100 are now payable in halves, the first half being due by October 1 and the second half being due March 1 (§42-18052). If the taxes become delinquent, they may be seized by the county Sheriff and sold at public auction for collection. On payment of the auction purchase price, title to the property vests in the purchaser. Any amount collected that exceeds taxes, fees and costs owed to the county and other taxing jurisdictions are returned to the owner of the property sold.

Exemption from Seizure - Homes on Possessory Rights

Although dwellings on possessory rights (a permanent improvement to real property that is classified as a Class 3 property, but not a mobile home, that is owned by someone different from the owner of the real property) are taxed as personal property, they are not subject to seizure and sale for delinquent taxes as personal property, but instead are treated like real property as described below (§42-19116).

Delinquent Real Property Taxes

Unless the total amount of taxes is $100 or less, taxes on real property is payable is halves, the first half due by October 1 and the remaining half due by the following March 1. The first half payment is delinquent after November 1 at 5:00 p.m. and the remaining is delinquent if not paid by May 1 at 5:00 p.m. Delinquent taxes are charged 16% simple interest until paid, with a fraction of a month counted as a whole month. However, if the full year tax for the year is paid on or before December 31 of the tax year, interest is not charged on delinquent first half taxes (§42-18053).

Tax Liens

If taxes are not paid, the County Treasurer will send a notice of delinquency by September 1 of the year following the tax year. A property owner is not personally liable for real property taxes under Arizona laws, but the property itself is and may be sold to satisfy any delinquent taxes (Pothast v. Maricopa County, 1934). Therefore, every year on or before December 31, the County Treasurer prepares a notice for public auction containing the list of all real property on which the taxes for prior tax years are delinquent and their description and the intention to sell a lien on the property. The Treasurer also sends a copy of the notice of proposed sale to the owner of each parcel of property on the delinquent tax list (§42-18108). After the list is printed, a one-time penalty of $5 or 5% of the amount of taxes, whichever is more, is imposed in addition to the 16% interest, on each property described (§42-18107). The notice for public auction is posted outside the treasurer's office, published in a newspaper of general circulation in the county and published on the Internet. A tax lien sale is then held in February. Liens are sold to the person who pays the whole amount of delinquent taxes, interest, penalties and charges due on the property, and who in addition offers to accept the lowest rate of interest on the amount paid to redeem the property from foreclosure (§42-18114). If there is no bid for a tax lien, an assignment to the state is be made. The purchaser of the tax lien pays the purchase price in cash at the time of the sale and the Treasurer creates a record of tax lien sale, giving the specifics of the sale, and gives the purchaser a certificate of purchase (CP). This may be a paper certificate or a registered certificate in the Treasurer's records, which is typically done in Treasurers' offices that have computerized all of their office functions (§42-18118).

Subsequent Taxes

If the property owner continues to fail to pay their property taxes, a CP holder on the property may pay subsequent taxes, accrued interest and related fees due on the property after June 1, if they desire to do so (§42-18121). If the CP holder chooses to make the payment, the Treasurer records this on the record of tax lien sale. If not, the property goes to auction for sale of a tax lien for the subsequent taxes and may be purchased by someone else through the process described above.

Redemption of a Tax Lien

A property tax lien may be redeemed by the owner of the property, the property owners agent, assignee or attorney, or any person who has a legal claim in the property, including CP holders of a different tax year. To redeem the lien, the person must pay the Treasurer the amount for which the lien was sold and any additional taxes or fees paid by the CP holder, with interest on the entire amount at the rate stated in the CP. After these amounts are paid, the Treasurer will give the individual a certificate of redemptioncorder's office. The Treasurer then pays the holder of the certificate of purchase.

Foreclosure of a Right to Redeem

Any time after three years, if a property tax lien has not been redeemed, the certificate of purchase holder may foreclose on the property. Foreclosure is an action taken in Superior Court in the county in which the property is located that legally establishes the holder of the certificate of purchase as the new owner of the property. At least 30 days before filing the action to foreclose, the CP holder must send a notice of intent to foreclose to the property owner of record and the Treasurer by certified mail. A property owner may redeem at any time before judgment is entered, even if a foreclosure action has been started. However, if an action is started, the property owner can be ordered by the court to pay the court costs and reasonable attorney fees in addition to all costs of redemption. If the property owner still does not redeem the tax lien and the court finds that the sale of the tax lien was valid, the court will enter a judgment foreclosing the right of the property owner to redeem and direct the Treasurer to execute and deliver to the CP holder a deed conveying the property. After the judgment is entered, the previous property owner has no further legal right, title or interest in the property other than an appeal of the foreclosure action or stay of execution as in other civil actions.

The Property Tax Calendar

The real property tax system is a two-year cycle where property taxes are based on valuations made and noticed the previous year.

Year 1 - Valuation Year

March 1 Deadline for County Assessors to send out the Notice of Value on Real Property

May 1 Deadline for property owners to appeal valuation to the Assessor

August 15 Assessor must have answered all appeals

September 10 Last day that property owners may appeal Assessor's decision to the County or State Board of Equalization

October 15 Boards of Equalization deadline to rule on locally valued property appeals

November 15 Boards of Equalization deadline to rule on centrally valued property appeals

December 15 Last day to appeal property valuations in tax court

December 20 Assessor completes assessment roll and transmits to the Board of Supervisors

Year 2 - Tax Year

January 20 Clerk of the Board makes an abstract containing valuations by taxing jurisdictions

February 10 Assessor transmits values required to compute levy limits for political subdivisions and equalization assistance for education and truth in taxation rates for school districts

April 30 Deadline for Department of Revenue to prepare a statewide abstract containing the valuation by county and taxing jurisdiction

July 1 Fiscal Year begins for which the property taxes are being collected.

3^rd Mon. in July Political subdivisions develop budgets for the coming year

3^rd Mon. in August County Board of Supervisors establish the tax levy needed and tax rate

October 1 First half of property taxes due

November 1 First half of property taxes delinquent. 16% interest begins to accrue on real property. Personal property referred to Sheriff for seizure and sale.

December 31 No interest is charged if all property taxes paid in full

Year 3

March 1 Second half of real property taxes due.

May 1 Second half of property taxes delinquent.

September 1 Notice of delinquency sent to property owners

December 31 Notice of Public Auction - Tax Liens

Year 4

February Tax Lien sales occur in each county

Year 7 Tax liens eligible for foreclosure actions

Appendix A

Exemptions from Property Tax in Arizona

Appendix B - GLOSSARY

A
Acquisition Cost - the cost of acquiring property, includng the actual cost of the item of property, the cost of transporting the property to its present site, the cost of installing the item of personal property, plus any sales or use taxes paid.

Affidavit of Affixture - a legal recorded document (D.O.R. Form 82528), which is used to change the assessment of a mobile home unit from personal property to real property (§ 42-15202).

Affidavit of Value - a legal document filed with the county recorder along with the deed of sale of a property that states the value of the property.

Appraisal - the estimation of market or "full cash" value of a property using standardized methodology.

Assessed Valuation - the value derived by the County Assessor by applying the assessment ratio to limited or full cash value.

Assessment Ratio - the percentage, based on property usage, applied by the County Assessor to limited or full cash value in determination of assessed value.

Assignment - the transference of interest in something to someone else.

Audit - an examination of books, records, and property to verify information provided to the County Assessor for assessment purposes.

B
Back tax - any outstanding tax that exists other than the current year.

Bonds - long-term indebtedness approved by voters in a particular taxing district.

C
Centrally Valued Property - properties that typically cross county lines and whose value is determined by the Arizona Department of Revenue.

Certificate of Purchase - a document denoting the amount of taxes, interest and fees that a tax lien was sold for.

Certificate of Redemption - a document denoting that a tax lien, along with any additional taxes or fees paid by the CP holder, including the interest on the entire amount at the rate stated in the Certificate of Purchase has been paid to the Treasurer.

Chattel - a term commonly synonymous with personal property.

Comparative Amount -listing of the previous year's taxes for comparison to the current year's taxes by jurisdiction.

D
Delinquent tax - first half taxes owed after 5:00pm on November 1 and second half taxes owed after 5:00 pm on May 1.

E
Exemption - Property that is not taxed. Property tax exemptions are specified in Article 9, Section 2, of the Arizona Constitution and Title 42, Chapter 11, Article 3 of the Revised Statutes.

F
Foreclosure - an action taken in Superior Court in the county in which property is located that legally establishes the holder of the certificate of purchase as the new owner of the property.

Full cash value - the County Assessor's determination of a property's market value derived annually using standard appraisal methods.

G
G.D.P. Implicit Price Deflator - a comprehensive price level index, which is compiled and issued quarterly by the U.S. Department of Commerce, Bureau of Economic Analysis (B.E.A.), and is associated with the items comprising measures of Gross Domestic Product (G.D.P.).

I
Improvements - anything done to land with the intention of improving its value, including buildings, fences, driveways, parking surfaces, retaining walls and similar items. It can also include improvements to prepare for construction, such as sewers, engineering activities or landscaping.

Improvement on Possessory Rights (I.P.R.) - an improvement owned by someone other than the owner of the land that the improvement is situated on. An improvement on possessory rights may be situated on land that is owned by either a taxable entity or a nontaxable entity.

Income Appraisal Method - a standardized method of appraising property that is based on the income potential of the property. Using operating income and expense data supplied by the owner, the value is determined by capitalizing the potential net income.

Inventory - stocks of raw or unfinished materials, unassembled parts, work in process, or finished products of a retailer, wholesaler, or manufacturer located within this state who is principally engaged in the resale of such materials, parts, or products. Such items are exempt from personal property taxation. (§ 42-11125)

L
Land - legally defined as a portion of the earth's surface, together with the earth below it, the space above it, and all things annexed thereto by nature or by man. For the purpose of appraisal, land is defined as real property exclusive of improvements.

Leasehold Improvements - improvements or additions to leased property that have been made by the lessee; also referred to as tenant improvements.

Legal Description - a description of property, usually composed from US Geological Service surveys, which determine the lengths and directions of the boundary lines forming the area of the parcel. All land parcels have such "meets and bounds" descriptions.

Lienholder - typically referring to individuals or entities investing in tax lien purchases.

Limited valuation - a formula established by the legislature to provide for a means basing primary property taxes. Increases to this value are based on statutory formulas.

Livestock - for personal property purposes, cattle, equines, sheep, goats, swine (except feral pigs), and poultry.

Locally Valued Property - properties that are identified and valued by the County Assessor.

M
Mass Appraisal - the systematic appraisal of groups of properties as of a given date using standardized procedures and statistical testing.

Manufactured Housing - a structure built after June 15, 1976, that is eight or more feet wide, and forty or more feet long, has a permanent chassis, is transportable in one or more sections, is equipped with complete plumbing, heating, and electrical systems from the factory, and is designed to be used with or without a permanent foundation as a dwelling when connected to on-site utilities. This definition excludes recreational travel trailers. (§ 41-2142)

Mobile Home - a structure transportable in one or more sections including the plumbing, heating, air conditioning and electrical systems contained in such a structure which, when erected on site, is either greater than eight body feet in width, thirty-two body feet or more in length and built on a permanent chassis, or, that is used as a single-family dwelling or for commercial purposes with or without a permanent foundation, regardless of size. (§ 42-19151)

N
Notice of Value - a notice stating the property's full cash value and the limited property value, if applicable, to be used for assessment purposes for the next tax year.

O
Overrides - amounts levied pursuant to an approval by voters in a particular taxing district to exceed budget or tax limitations.

P
Parcel Number - the number that identifies the property or land parcel for tax purposes. The number is composed of the book, map, and parcel number as defined by the Assessor's Office.

Park Model - a structure not less than 320 square feet and not more than< 400 square feet that is built on a single permanent chassis, mounted on wheels and designed to be connected to utilities for operation of installed fixtures and appliances. (§ 41-2142(30)(c))

Personal Property - includes property of every kind, both tangible and intangible, not included in the term "real estate". (§ 42-11001(7))

Possessory Right - a right to use land, improvements, or personal property belonging to another entity.

Poultry - chickens, turkeys, domesticated birds, game birds, ratites, fowl and waterfowl. (§ 3-1201(6))

Primary Tax Rate - rate per $100 of assessed value used to generate primary taxes.

Primary Taxes - taxes calculated on limited assessed value for the maintenance and operation of State, County, Cities, School Districts and Community College Districts. These taxes are limited by an inflation cap and a constitutional limit for residential homeowners.

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Real Estate - the ownership of, claim to, possession of, or right of possession to lands or patented mines. (§ 42-11001(10))

Real Property - all of the tangible and intangible rights in land and improvements. Real property includes: the ownership, claim to, possession of, or right to possession of land; all mines, minerals, and quarries in the land, all standing timber whether or not belonging to the owner of the land, and all rights and privileges pertaining to them; and improvements.

Replacement Cost Appraisal Method - a standardized appraisal method that is based on how much it would take at today's material and labor costs to replace the property with a similar structure. This method is used mostly for commercial buildings or homes that are not typical or are located in a remote area.

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Sales Comparison Appraisal Method - a standardized appraisal method, also known as market, that compares a property to other similar properties that have recently been sold. This method is used mostly for homes and land.

Secondary tax rate - rate per $100 assessed value used to generate secondary taxes.

Secondary taxes - taxes calculated on full cash assessed value to pay redemption charges on any bonded indebtedness, amounts levied by voter overrides and assessments levied by Special Districts.

Special Districts - districts authorized by ARS Title 48 and approved by local voters or local government to provide specific services to the taxed individual. The assessment for these districts are not always calculated on a property's value, but can also be based on a property's acreage, frontage square feet, or other determination.

State aid to Education - a reduction (tax credit) for owner-occupied homeowners in primary property tax levied by school districts. This amount will be reimbursed to School Districts from the State.

Subtax - to purchase of current year delinquent taxes by previous years lienholder.

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Tax Roll - an official listing of all properties and taxes owed for a given tax year.