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Wednesday, August 23, 2017

Frequently Asked Questions (FAQs)

 Click on a category to the left to filter the list of forms below.

Can I appeal my taxes?

No, tax bills cannot be appealed. Only the value may be appealed by the date printed on the Notice of Value.

How and when will I know if my account has been processed?

The Assessor’s Office mails out Valuation Notices on or before August 30 of each year. The Valuation Notice will identify your Full Cash Value, Assessed Value and provide the appeal deadline.

How is a manufactured/mobile home valued?

In Arizona, manufactured/mobile homes are valued by taking the original factory list price less a depreciation factor based on age, as set by the Arizona Department of Revenue. When a manufactured/mobile home is acquired, the Arizona Department of Transportation issues a title, or the owner can record an Affidavit of Affixture, which will add the manufactured/mobile home value to the real estate property value.

How is my assessed value determined?

The Assessed Value of each property class is determined using percentages set by the State Legislature. The following percentages apply to the three most used classifications. The assessment ratios are applied to both the primary and secondary values of a property, which determines the property’s net assessed value.

  • Commercial 20% for 2012, 19.5% for 2013, 19% for 2014
  • Land 16%
  • Residential 10%

How is Personal Property Valued?

Based on original cost and age of all personal property in your possession as of December 31st of the prior year, the County Assessor will calculate the current replacement cost new less depreciation (Full Cash Value) of each item. The Assessed Value is based on the Full Cash Value after application of any qualifying exemption amount and the assessment ratio for the legal class of the property. The tax rates for the county and local governmental jurisdictions in which the business operates are applied to the Assessed value. The original cost of a personal property item includes the purchase price plus all freight and installation costs as well as any paid sales tax for the item.

I am leasing equipment, and the leasing company is billing me for Personal Property Taxes. Is this legal?

By statute, the tax on Business Personal Property is a debt against the owner. Typically the Leasing Company will pay the taxes directly to the County Treasurer and then issue their own billing to the lessee for reimbursement. Please review your lease agreement for details.

I have finished my lease, and now own the equipment. Shouldn’t I report my ‘buyout’ cost as my acquisition cost?

The best way to report any equipment that has been previously assessed by another business entity is to maintain the Historical Acquisition Costs and Dates. By reporting the historical information, you will maintain the depreciation already applied to the assets. Once you report used equipment, at a reduced purchase cost, it is now Non-Qualified, and the depreciation starts over from your purchase date. Also, if Market Value (which is the pre-depreciated value) is reported, then no additional depreciation will be applied.

I just started my business, how do I report my Personal Property?

If you were not sent a form, please contact the Assessor and a form will be mailed to you for completion or see Forms.

I operate several locations throughout the state. Does the ‘Exemption’ apply to each location?

The “Exemption” applies only once throughout the state for each legal Business entity. If multiple locations have a combined Full Cash Value of less than the exemption amount then it would cover all of those locations. You will need to choose which county you are claiming your exemption in. If the combined Full Cash Values are over the exemption amount, the remaining will be assessed.

I understand why my leasing company is billing me for Personal Property Taxes, but they are also charging an additional Sales Tax. Isn’t that double taxation?

No. The Counties are solely responsible to value and to collect the Personal Property Taxes for the equipment. Separately, the Arizona Department of Revenue charges “Sales Tax”, (technically labeled “Transaction Privilege Tax”). The Arizona Department of Revenue charges these taxes on every invoice your leasing company bills to customers in Arizona.

I want to remove my name from public record, how do I do it and am I eligible?

To remove your name from public record, please see the Arizona State Statutes which provide the specific details on who is eligible and what requirements have to be met.  There are separate statutes for different public records: Recorder (ARS11-483), the Assessor and Treasurer (ARS11-484) and Voter Registration (16-153).  Please review each statute for details.

I’ve received an Arizona Business Property Statement, where do I send my payment?

The Business Property Statement is not a Tax Bill, it is the annual reporting form for your business to submit changes on your account such as, additions/deletions to equipment and name and address changes.

If I qualify, what are the benefits?

The Assessed Value (see definition above) of the property will be reduced by no more than $3,838, thereby corresponding to a reduction in your property tax bill.

If my Full Cash Value is below the exemption amount do I still have to complete the form every year?

In most cases No, if your Full Cash Value falls below the annual exemption amount, you may be sent a form that will have a place for you to sign stating that your business is below the exemption amount.

If you are a leasing company, handle rental equipment or you take your exemption in another county, you will need to file yearly.

In regard to the deadline of April 1st, does the Business Property Statement need to physically be in your office, or can it be post marked April 1st?

Your return must be postmarked on or before April 1st by the United States Postal Service or certified mail or emailed or faxed.

Is all personal property taxed?

Arizona offers several exemptions from personal property tax. Personal property used by the owner for private, domestic purposes is not subject to personal property taxation (except for manufactured housing). Household goods and furnishings, personal wardrobes and jewelry, or recreational possessions used in the owner’s residence and for private activities are exempt from property taxation.

Is my inventory taxable?

No, inventory for sale is not taxable in Arizona.

Is the exemption for my house only?

No, the exemption is applied to real estate first, then to a mobile home or automobile.

Last year we filed an Asset Listing and now our equipment costs are listed on the front of the Business Property Statement. How do we make changes?

To add or delete equipment from your return, use the back side of the form, (section 4). When adding equipment, list the total acquisition cost under the appropriate schedule column, and the year acquired at the far left of that row in the Additions section. When deleting equipment, it is the same as adding, but listed in the ‘Deletions’ section. You must delete equipment out of the same year that it was previously reported.

My Statement refers to a Claim of Exemption. What does this mean?

Per state statue, each eligible taxpayer is entitled to one statewide exemption.

The exemption amount is determined annually by the Arizona Department of Revenue. After the exemption has been applied any remaining Full Cash Value will be assessed.

The yearly exemption amount can be found on the current Business Personal Property Statement on page 2 in section 6.

Our business closed, how do I close my Business Personal Property Account?

You may write on any open space on the front of the Business Property Statement, or attach a separate letter, identifying the Account Number, stating that the business closed, date of closing and what happened to the equipment.

The name and address on the Business Property Statement is wrong. How do we correct this?

Complete Section 1 on the front of the form to identify any changes to the Business Name, Mailing Address or Location Address.

This is the first time we received a Business Property Statement. What do I need to do?

Business Personal Property deals with the physical assets used in the operation of the business. If you have an Asset Listing you can attach a copy to the property statement and return it to the Assessor’s Office. Or, if an asset listing is not available, make a listing of all the business equipment including a description of the equipmentyear it was purchased and the original acquisition cost(to include any freight, installation, special support, special wiring, special plumbing and sales tax paid). Send your list to the Assessor’s Office.

We did not receive our Business Property Statement. How do I obtain a duplicate form to file?

Please contact the Assessor’s Office and a duplicate form will be mailed, faxed or emailed to you or, for a blank form, see the Forms section of this page.

We have added equipment, but do not know if it is Qualified or Non-Qualified?

Qualified Equipment may be eligible for additional deprecation where Non-Qualified may only receive standard depreciation.

Equipment is qualified if this is the first time it is being assessed in Arizona. Typically, brand new equipment is always qualified. Used equipment that was acquired in Arizona for the first time (historically), should be listed as Non-Qualified.

What are legal classes?

Arizona’s property tax system “classifies” property according to its usage. Each class of property is assigned an assessment ratio, pursuant to state law, ranging from 1% to 18%. The assessment ratios are applied to both the primary and secondary values of property, which determines the property’s net assessed value.  All classifications use the same tax rates (with exception of the home-owner’s rebate).

Class 1 18% Commercial and industrial real property not included in other classes. Commercial and industrial personal property exceeding $159,498 of full cash value. Mines and mining claim property and standing timber. Local telecommunications service, gas, water and electric utility company property, pipeline company property, producing oil and gas property.
Class 2 15% Agricultural real property and vacant land and Exempt Property
Class 3 10% Primary Residence
Class 4 10% Leased, Rented or Second Home; Care Facilities for Children and Adults, Bed and Breakfasts
Class 5 15% Railroad operating property, private car company property and airline flight property
Class 6 5% Noncommercial historic property, foreign trade zone property, qualifying military reuse zone property, qualifying enterprise zone property, quality environmental technology property, and qualifying environmental remediation property
Class 7 18% Commercial Historic Base (Class 1) property, subtracting for up to 10 years, all but 1% of the full cash value of modifications to restore and rehabilitate historic property
Class 8 10% Residential Commercial (Class 4) property, subtracting for up to 10 years, all but 1% of the full cash value of modifications to restore and rehabilitate historic property
Class 9 1% Possessory Interests (Certain Improvements on Government Property)

What are my taxes based on?

Property taxation has 3 components.

  1. The first component is the value of the property.
  2. The second is the assessment ratio that is multiplied against the value of the property.  This ratio is set based on the current use of the property.  That ratio is multiplied against the value of the property to get to a net assessed value.  Once the ratio is applied to the full cash value and limited property value, it creates an assessed value for both full cash and limited property values.
  3. The third component is the tax rate.  The net assessed value amounts are then applied to the Current Tax Rates in your area. Tax rates are set by your local taxing jurisdictions.

What are property tax exemptions?

Arizona provides property tax exemptions, in varying dollar amounts, to qualifying disabled persons and widows/widowers, whose spouses passed away while residing in Arizona.

Anyone with questions regarding deadlines and criteria for property tax exemptions may phone contact the Assessor’s Office.

Remember, the last business day in February is the deadline to file for any property tax exemption.

What are the qualifications?

  1. You must be a resident of Arizona.

  2. Your Total Assessed Valuation (see definition above) in Arizona cannot exceed $26,082. This means the property assessment usually equates to a $260,820 (LPV) property valuation.

  3. Household income from all sources, excluding social security, cannot exceed $31,986.

  4. If children under 18 years of age reside in the household, income cannot exceed $38,872.

  5. Disability must be total, permanent and certified by an Arizona licensed physician on form DOR 82514B. A certificate is only needed for a new application (unless requested by our office).

What if I don’t agree with the Valuation Notice?

By statute, you have 30 days from the notice’s mailing date to file a Petition for Review (DOR form 82530) with the Assessor’s Office. The Assessor’s Office then has 20 days to respond to your petition. If the disputed value has not been settled by that time, you may file an appeal with the County Board of Equalization within 20 days of the mailing date of the Assessor’s Decision. Hearings are scheduled by the Board of Equalization after the appeals are filed. (Appeal forms are available for download during the appeal season.)

What if the recently recorded information on the GIS interactive website is incorrect?

If you find that the information is incorrect or the address needs to be changed, please contact the Assessor’s Office immediately.

If you have recently recorded or transferred ownership of property, the information on GIS’s Interactive website will not show the change immediately. The Assessor must process the deeds from the Recorder’s Office and verify the legal description and ownership rights of each transaction. Once this is completed, the Assessor information is updated in the Assessor software and is loaded into the Yavapai County GIS Interactive Website.

Please note that it could take several weeks before the updated information is available on the Internet.

What if the sales information is incorrect?

In the GIS Interactive Website you can search for a parcel by owner, address or parcel number. On the bottom right, click on Recent Sale Information for the latest in Sales and Transfer documents.

What is a disability exemption?

In order to qualify for the property tax exemption for disabled persons, a person must be totally and permanently disabled, either physically or mentally, resulting in that person’s inability to engage in any substantial gainful activity.  Certification of Disability for Property Tax Exemption

What is a full cash value of a property?

The market value, or full cash value, of all real property in Arizona is the starting point for determining taxable values.  Arizona courts have interpreted the term “full cash value” to mean the “cash equivalent value” of the property.

The Assessor does not create the value. It is created by the choices and decisions people make in the marketplace. The Assessor has the legal responsibility to study those transactions and appraise property accordingly.

When analyzing the accuracy of the Assessor’s property values, ask yourself if the property has been valued fairly. First, sales of similar properties must be reviewed. When using the sales comparison (market) approach, the sales data must be carefully analyzed. Then the size, quality, location, differences in additions or features, and time of sale factors need to be considered.

What is a limited property value?

Arizona is unique in that it uses two types of property values for taxing purposes. The limited property values are used to calculate primary taxes. ARS §42-11001(7) defines limited property value (LPV) as the value determined pursuant to ARS §42-13301. Under ARS §42-13301 the LPV is the limited property value of the property in the preceding valuation year plus five percent of that value. The current LPV of a parcel of property shall not exceed its current full cash value. Per ARS §42-11001(7), the LPV is used to calculate the levy limitations for counties, cities, towns and community college districts, and for assessing, fixing, determining and levying primary and secondary property taxes on all property except property described in ARS §42-13304, which again, include personal property, other than mobile homes, and property included in property class one under ARS §42-12001(1)(7) and (11).

What is an assessment?

Property  Assessement is determined by the value of property multiplied by the assessment ratio for the current use of the property (Assessment Ratios  are determined by State Legislature ).  This assessment of value is used in the calculation of tax bills.

What is Business Personal Property?

For property tax purposes in Arizona, business personal property is defined as all types of property except real estate. Taxable personal property includes property used for commercial, industrial, and agricultural purposes. Personal property is considered to be movable and not permanently attached to real estate. Although there are exceptions, personal property usually can be removed without causing damage to either the real estate from which it is removed or to the item of property itself. Property taxes in Arizona are imposed on both real and business personal property.

What is personal property?

For property tax purposes, personal property is defined as all types of property except land, buildings, or other real property improvements. Taxable personal property includes all assets used in the operation of a business, farm, or ranch. Manufactured housing (mobile homes) is also personal property, unless the owner files an affidavit affixing the unit to their real estate.

What is the difference between an Affixed Manufactured Home and an Unattached Manufactured Home, and how are they taxed?

An Affixed Manufactured Home will receive a notice of value and is taxed as real property.  To affix a manufactured/mobile home, you must surrender your title to ADOT and record an “Affidavit of Affixture”.  The same person must own the land and the manufactured/mobile home.

AFFIDAVIT OF AFFIXTURE:

A Manufactured Home for which no affidavit of affixture has been recorded is unattached personal property and will receive a separate notice of value card and tax bill from their real property.

What is the role of the assessor?

The assessor’s  office identifies, locates, and values property in accordance with state law.  The Assessor does not calculate property taxes but determines the assessed value that is used in the tax bill calculation.  Because assessment affects property taxes, it is important that assessed value be accurate and fair.

When and where do I apply?

You must file an application between January 1 and the last business day in February in one of the twoYavapai County Assessor’s Offices.  Arizona State Statutes require first time applicants to apply in person. After qualifying for an exemption you will no longer need to fill out exemption paperwork on a yearly basis.  However, owners must notify the Assessor of any changes that apply to the eligibility of the exemption.

Who is entitled to an exemption?

Exemptions are available for qualifying widows, widowers and totally disabled persons.

Why didn’t my tax bill go to my mortgage company?

Mortgage companies often request that the property tax bill on financed properties be sent directly to them either through the mail or electronically. If the tax bill has been sent electronically, the property owner may receive the actual tax bill. We suggest that property owners contact their mortgage company to be certain that they have received the tax bill and that payment will be made by them.

Why have a property tax?

The property tax is an important part of any well-balanced revenue system for a community. Property taxes fund such things as schools, fire and police protection, streets, libraries and other public entities. The property tax allows these services to be funded in proportion to the value of individual properties. In general, when a community spends more tax dollars on better schools, parks, streets and other public services, community members will ultimately benefit.
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