- AZ has one of the most complicated property tax systems in the nation.
- The system favors homeowners, like you and me.
- In AZ, homes are taxed at a lower assessment ratio than businesses. For example, a business valued at $100,000 pays tax on 18.5% or $18,500 of the value. Whereas a home valued at the same $100,000 pays taxes on 10% or $10,000 of the value.
- Unlike business property, home-owner occupied homes are given a rebate of up to $600/year, called the Credit for State Aid to Education.
- Residential primary property taxes are capped at 1% of the home’s limited value. Business property has no such cap. Some AZ school districts intentionally raise the tax rate to exceed the 1% limit knowing home owners won’t complain because their tax is capped, but businesses and the state will have to pay more.
- Starting in 1980, Arizona realized that its business property taxes, ranked as high as 3rd in the nation, were causing businesses to locate to other states. In an attempt to attract more high paying employers to the state, the state started to phase down the business property tax assessment ratio. These changes were approved by both Democratic and Republican governors.
- During that same time, the legislature made sure to increase the homeowner rebate multiple times in order to protect homeowners.
- Proposition 117 was overwhelmingly passed by the voters in 2012 and went into effect in the 2015 tax year. It capped the annual increase in the limited (taxable) value of property to 5% per year. Prior to the proposition tax values could skyrocket during times like the housing bubble. Mr. Hoskins analysis of Proposition 117 is totally off base. In his letter he suggests that large businesses will benefit more than homeowners from the proposition. What he fails to realize is that most of the high value business properties he references don’t even benefit from Proposition 117 because they are assessed by the Department of Revenue and those assessments weren’t even included in Proposition 117. In addition, the evidence is clear. Even though residential assessed values went up 25% in Maricopa County, Prop 117 limited the increase in the taxable value to 5%.
Legislative District 21
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