A.R.S. tit. 42 ch. 11 — Arizona Revised Statutes Title 42 Chapter 11 — Property Tax

42-11001. Definitions In chapters 11 through 19 of this title, unless the context otherwise requires: 1. "Assessed valuation" means the value derived by applying the applicable percentage prescribed by chapter 15, article 1 of this title to the full cash value or limited property value of the property, as applicable. 2. "Board" or "state board" means the state board of equalization. 3. "County board" means the county board of supervisors sitting as the county board of equalization. 4. "Current usage" means the use to which property is put at the time of valuation by the assessor or the department. 5. "Due date" means the next business day if a due date of any report, claim, return, statement, payment, deposit, petition, notice or other document or filing falls on Saturday, Sunday or a legal holiday. 6. "Full cash value", for property tax purposes, means the value determined as prescribed by statute. If a statutory method is not prescribed, full cash value is synonymous with market value, which means the estimate of value that is derived annually by using standard appraisal methods and techniques. Full cash value is the basis for assessing, fixing, determining and levying primary and secondary property taxes on property described in section 42-13304. Full cash value shall not be greater than market value regardless of the method prescribed to determine value for property tax purposes. 7. "Limited property value" means the value determined pursuant to section 42-13301. Limited property value is the basis for: (a) Computing levy limitations for counties, cities, towns and community college districts. (b) Assessing, fixing, determining and levying primary and secondary property taxes on all property except property described in section 42-13304. 8. "Net assessed value" means the assessed value minus any exempt property. 9. "Person" means a natural person, individual, proprietor, proprietorship, company, corporation, organization, association, joint venture, partner, partnership, trust, estate or limited liability company, the federal or state government, a political subdivision of a state or any other legal entity or combination of entities that owns, controls or has possession of real or personal property. 10. "Personal property" includes property of every kind, both tangible and intangible, that is not included as real estate. 11. "Primary property taxes" means all ad valorem taxes except for secondary property taxes. 12. "Producing mine" or "mining claim" means a mine or mining claim from which coal or any other mineral or mineral substance, except for clay, sand, gravel, building stone or a mineral or mineral substance that is normally processed into artificial stone, has been extracted for commercial purposes at any time during a period of one year before the first Monday in January of the valuation year. 13. "Real estate" includes the ownership of, claim to, possession of or right of possession to lands or patented mines. 14. "Residential treatment and education facility" means any residential facility that is subject to title 15, chapter 10, article 6. 15. "Roll" means the assessment and tax roll. 16. "Secondary property taxes" means: (a) Ad valorem taxes or special property assessments that are used to pay the principal of and the interest and redemption charges on bonded indebtedness or other lawful long-term obligations that are issued or incurred for a specific capital purpose by a municipality, county or taxing district. (b) Ad valorem taxes or assessments that are levied by or for special taxing districts and assessment districts other than school districts and community college districts. (c) Amounts that are levied pursuant to an election to exceed a budget, expenditure or tax limitation. 17. "Tax year" for all property means the calendar year in which the taxes are levied. 18. "Valuation" means the full cash value or limited property value that is determined for real or personal property, as applicable. 19. "Valuation date", for the purposes of real property and property valued by the department, means January 1 of the year preceding the year in which taxes are levied. 20. "Valuation year" means: (a) For real property and property valued by the department, the calendar year preceding the year in which the taxes are levied. (b) For personal property, the calendar year in which the taxes are levied. 42-11002. Property subject to taxation All property in this state is subject to taxation except as provided in article IX, Constitution of Arizona, and article 3 of this chapter. 42-11003. Double taxation prohibited This title shall not be construed to require or permit double taxation. 42-11004. Payment of tax as prerequisite to testing validity A person on whom a tax has been imposed or levied under any law relating to taxation may not test the validity or amount of tax, either as plaintiff or defendant, if any of the taxes: 1. Levied and assessed in previous years against the person's property have not been paid. 2. That are the subject of the action are not paid before becoming delinquent. 3. Coming due on the property during the pendency of the action are not paid before becoming delinquent. 42-11005. Suit to recover illegally levied, assessed or collected tax; refund A. Except as provided in chapter 16, article 6 of this title, within one year after payment of the first installment of tax, an action may be maintained to recover any tax that was illegally collected. B. If the court determines that the tax due is less than the amount paid, the excess shall be refunded in the manner provided by this title with interest at the legal rate computed from the date of overpayment. For the purpose of computing interest under the judgment, if the tax was paid in installments, a pro rata share of the total overpayment is considered to be attributable to each installment. C. The department shall be a party to any action brought pursuant to this section. D. Any taxpayer who is dissatisfied with the valuation or classification of the taxpayer's property may appeal to court only in the time and manner prescribed in chapter 16 of this title. 42-11006. Injunctive relief prohibited A court may not issue an injunction, writ of mandamus or any other extraordinary writ in any action or proceeding against the state, a county or municipality or a state, county or municipal officer to prevent or enjoin: 1. Extending an assessment on the tax roll. 2. Collecting an imposed or levied tax. 42-11007. Evidentiary value of records Each of the following documents and entries are prima facie evidence of the facts stated in them: 1. The entries made in the county treasurer's records. 2. The records of the county board of supervisors. 3. The valuations and roll and the accompanying resolutions. 4. The delinquent list or a certified copy of the delinquent list. 42-11008. Validity of assessment despite irregularities in the roll The lack of description, a misdescription or an irregularity in the description of property on the roll does not invalidate an assessment if it can be ascertained or proved what property is intended. 42-11009. Public access to valuation and assessment information A. The county assessor or the department shall: 1. Make public documents and public records that relate to locally assessed property valuation and assessment available to the public in the media and format in which they are maintained on or before the date prescribed by law on which the contents of the document become official and effective. The assessor or the department shall make information relating to notices of valuation prescribed in chapter 15, article 3 of this title available to the taxpayer or the taxpayer's representative in the media and format in which it is maintained, including microfiche and electronic media, on or before the date these notices are mailed. 2. Notwithstanding paragraph 1, on request, reproduce and deliver those public documents and records within ten days after the date of the request. If the assessor cannot reasonably provide the copies within ten days, the assessor shall provide a written estimate of the time that is reasonably necessary to provide the copies. If the assessor fails to provide the requested copies within ten days or fails to provide an estimate of the time that is reasonably necessary to provide the copies, the person making the request may bring an action to compel compliance with this section and may obtain an award of legal costs and reasonable attorney fees pursuant to section 39-121.02. 3. On written request, furnish the requested public information on electronic media if the requested information is maintained electronically. Information shall be furnished under this paragraph in the media and format in which the assessor maintains it. B. Information obtained for the purpose of preparing and defending a property tax appeal is not considered to be obtained for a commercial purpose as defined in section 39-121.03. The assessor or department may charge the actual cost of reproducing information under this section. The assessor or department, on request, shall provide written documentation to support the reproduction costs charged. The assessor or department shall not assess a fee for granting a release of public information that is in the possession or custody of the assessor, the department or another official. 42-11051. General powers of department relating to property valuation In performing its duties under this title the department may: 1. Study the property tax systems of other states. 2. Employ technical experts and assistants and contract for services as necessary to carry out its duties. 3. Appoint advisory committees that represent various classes of property. 42-11052. Investigating and prosecuting violations A. The department may: 1. Examine alleged violations of this title relating to valuing property and assessing and collecting taxes. 2. Request the attorney general or the county attorney in the respective county to commence and prosecute actions and proceedings or to represent the department in litigation to enforce the laws relating to property taxation and the department's orders or rules. B. If, in the director's opinion and in the opinion of the attorney general or the county attorney of the county in which the public official serves, a public official who performs valuing, taxing or equalizing functions is guilty of official misconduct or neglect of duty the director shall take whatever steps are necessary to ensure that complaints are filed and prosecutions are commenced to remove the official from office. A complaint by the director charging official misconduct or neglect of duty of a public officer shall be delivered to the county attorney or to the attorney general who shall file the original with the superior court in the county in which the official serves and cause a copy to be served on the public official. Proceedings on such a complaint shall be pursuant to section 38-342, subsections B and C and sections 38-343 and 38-345. C. The director may request the attorney general to initiate a mandamus action if a county assessor fails to follow any rule, order or direction of the director or the department or if the director determines that an assessor or county board of equalization has practiced discrimination in valuing property. For purposes of this subsection, county boards of equalization and county assessors are state officers within the meaning of article VI, section 5, Constitution of Arizona. 42-11053. Investigating property valuations A. The department shall: 1. Investigate property valuations and any matters relating to property taxes and shall require the production of any private or public record relating to those valuations or property taxes. 2. Notify the owner or possessor of the property that an inspection will occur and provide the date of the inspection. The department is not required to provide the notice required by this paragraph by certified mail. 3. Provide a copy of the inspection report to the owner or possessor of the property. B. The director or the director's agent may: 1. Enter on and examine any property in this state to determine its full cash value. If the owner or possessor of property refuses entrance to the director or the director's agent, the director may estimate the valuation of the property. 2. Require any officer whose duties relate to assessing or collecting taxes to report to the director at the time and in the manner that the director prescribes. 42-11054. Standard appraisal methods and techniques A. Subject to subsection B of this section, the department shall: 1. Prescribe guidelines for applying standard appraisal methods and techniques that shall be used by the department and county assessors in determining the valuation of property. 2. Prepare and maintain manuals and other necessary guidelines, consistent with this section, reflecting the standard methods and techniques to perpetuate a current inventory of taxable property and the valuation of that property. B. Before they are adopted, the department shall submit each substantive proposed guideline, table and manual that is developed, amended or otherwise modified from and after December 31, 2006 to the joint legislative oversight committee on property tax assessment and appeals. The department shall not finally adopt, amend or otherwise modify a substantive guideline, table or manual for at least thirty days after submitting the measure to the committee. The committee may hold one or more informational hearings on the proposed measure within thirty days after submission. In adopting, amending or modifying the measure the department shall consider the committee's comments. If the committee fails to hold a hearing within thirty days after submission, the department may adopt, amend or modify the measure without further consideration. C. In applying prescribed standard appraisal methods and techniques: 1. Current usage shall be included in the formula for reaching a determination of full cash value. 2. Solar energy devices, as defined in section 44-1761, grid-tied photovoltaic systems and any other device or system designed to produce solar energy primarily for on-site consumption are considered to add no value to the property on which such a device or system is installed. 3. If characterized as personal property, subject to any applicable constitutional exemption from taxation, solar energy devices, as defined in section 44-1761, grid-tied photovoltaic systems and any other device or system designed to produce solar energy primarily for on-site consumption shall be valued as provided in section 42-13056. 4. Energy efficient building components, renewable energy equipment and combined heat and power systems are considered to add no value to the property, if the property owner provides the county assessor with documentation of all elements that qualify pursuant to this paragraph, including documents showing actual acquisition and installation costs. The documentation must be submitted to the county assessor not later than six months before the notice of full cash value is issued for the initial evaluation year pursuant to section 42-15101 or, if the component is added after September 30 of the preceding year, not later than March 31 of the initial valuation year. For the purposes of this paragraph: (a) "Combined heat and power system" means a system that generates electricity or mechanical power and useful thermal energy in a single, integrated system such that the useful power output of the facility plus one-half the useful thermal output during any twelve-month period is not less than 42.5 percent of the total energy input of fuel to the facility. (b) "Energy efficient building components" means high performance sustainable building components installed so that the buildings or building components meet or exceed the energy efficiencies prescribed by the United States environmental protection agency energy star program or by a leadership in energy and environmental design green building rating standard developed by the United States green building council, or an equivalent green building standard, or that are at least fifteen percent more energy efficient than the international energy conservation code in effect at the time of building permit issuance. (c) "Renewable energy equipment" means equipment that is used to produce energy primarily for on-site consumption from renewable resources, including wind, forest thinnings, agricultural waste, biogas, biomass, geothermal, low-impact hydropower and solar energy not included under paragraph 2 of this subsection. D. If the methods and techniques prescribe using market data as an indication of market value, the price paid for future anticipated property value increments shall be excluded. E. For the purposes of determining full cash value the department and county assessors shall use and apply the ratio standard guidelines issued by the department for tax year 1993 in the same manner as they were applied in tax year 1993. This subsection does not apply to property that is valued according to prescribed statutory methods or to property for which values are determined in the year after an appeal pursuant to section 42-16002. 42-11056. Department records of valuations; notifying department of changes in valuations A. The department may maintain a complete and current record of all property that is subject to property tax and of property tax assessments in this state. B. The county assessors, county treasurers, county boards of equalization and state board of equalization shall notify the department of each change in valuation or assessment of any property listed on the rolls and the reasons for the change on such form as the department may prescribe. The county assessors and treasurers shall not make any change in the valuation or assessment of any property listed on the rolls unless the department is notified according to the form prescribed by the department. C. The county assessors shall furnish the department with any other information that the department may require. 42-11101. Definitions In this article, unless the context otherwise requires: 1. "Afflicted" means persons who, because of a mental or physical condition, illness or condition of distress, adversity or harassment, or imminent risk of such condition, are unable to reasonably take care of themselves or their families or to properly function in society without periodic or continuous assistance. 2. "Indigent" means a person who is without sufficient means or ability to provide themselves with adequate food, shelter or social necessaries. 42-11102. Exemption for government property; application of procedural provisions A. Federal, state, county and municipal property is exempt from taxation, including: 1. Property that is owned by a nonprofit organization but is used by this state or a political subdivision during the entire tax year exclusively for a governmental activity. 2. Property that is the subject of a lease-purchase agreement that is authorized by law and in which this state or a political subdivision is the lessee-purchaser and the property is used by this state or a political subdivision during the entire taxable year exclusively for a governmental activity. 3. Improvements that are placed on public lands held under grazing permits, the title to which passes to the federal government. B. Article 4 of this chapter does not apply to the exemption from taxation for federal, state, county and municipal property. C. Notwithstanding subsection A relating to state property, property that is owned by the Arizona state retirement system, the corrections officer retirement plan, the public safety personnel retirement system or the elected officials' retirement plan, that is not used during the entire taxable year exclusively for a governmental activity and that is acquired either by foreclosure of an authorized investment or for the purposes of producing income for the system or plan is subject to either a government property lease tax under chapter 6, article 5 of this title or, if a government property lease tax is not paid or is not economically feasible, to voluntary contributions of money to the county, municipality, school district and community college district and any other special taxing district in which the property is located in lieu of taxes otherwise levied by those entities. The system or plan may not continue to hold title to the property as an authorized investment under title 38 unless a tax or voluntary contribution is paid pursuant to this subsection. On or before April 1 of each year the plan or system shall notify the county assessor of the county in which the property is located whether a government property lease tax or voluntary contribution will be paid. If a tax is not economically feasible, the county assessor may require the plan or system to pay voluntary contributions. If the system or plan pays a voluntary contribution: 1. The assessor shall determine the full cash value of the property at market value and shall transmit that determination to the board of supervisors on or before the third Monday in June. 2. On or before the third Friday in September the assessor shall compute the contribution to be made based on the determined valuation using the method of assessment applied in assessing ad valorem taxes of properties of similar character and devoted to the same use in the county for the current tax year. 3. The assessor shall: (a) Submit the computation of the contribution to the board of supervisors at the same time that the assessor submits the assessment roll. (b) Notify the county school superintendent of the amount of the contribution. 4. The plan or system shall pay one-half of the amount determined not later than the first Monday in November and the other one-half not later than the first Monday in May of the next year. 5. The county treasurer shall distribute the monies received to the various taxing jurisdictions in the same manner as property taxes are distributed. 6. Any person, public official or taxing entity that is not satisfied by a determination under this subsection has the same remedies provided by this title or may file a civil action to determine the correct amount due. In any such action the only issue shall be the correctness of the computation of the amount due. 42-11103. Exemption for government bonded indebtedness; application of procedural provisions A. Public debts as evidenced by the bonds of this state, counties, municipalities and other political subdivisions are exempt from taxation. B. Article 4 of this chapter does not apply to the exemption from taxation for public debts that are evidenced by bonds. 42-11104. Exemption for educational and library property A. Libraries, colleges, school buildings and other buildings that are used for education, with their furniture, libraries and equipment and the land that is appurtenant to and used with them, are exempt from taxation if they are used for education and not used or held for profit. B. Property and buildings are exempt from taxation if leased from: 1. A school district pursuant to a lease or lease-purchase agreement under section 15-342, paragraph 9 or 10. 2. A community college district pursuant to a lease or lease-purchase agreement under section 15-1444. C. Property and buildings, including land, improvements, furniture and equipment, that are owned by a nonprofit organization that is recognized under section 501(c)(3) of the internal revenue code and that operates as: 1. A charter school pursuant to section 15-183 are exempt from taxation beginning on the date the nonprofit organization acquires ownership of the property and buildings if the property and buildings are used for education and are not used or held for profit. 2. A trap and skeet shooting club that teaches, trains, sponsors, coaches or hosts or sponsors clinics, shooting leagues, competitive tournaments or other events, including hunter and firearm safety classes, are exempt from taxation if the property and buildings are used for education purposes and not used or held for profit. 3. A residential treatment and education facility are exempt from taxation beginning on the date the nonprofit organization acquires ownership of the property and buildings if the property and buildings are used for education and are not used or held for profit. D. Within ten days after receiving an initial affidavit of eligibility submitted under section 42-11152 by a nonprofit organization described under subsection C of this section, the county assessor, on request, shall issue a receipt for the affidavit. E. A nonprofit organization described under subsection C of this section shall file with the assessor the affidavit required by section 42-11152 and evidence of the organization's tax exempt status under section 501(c)(3) of the internal revenue code when initially claiming the exemption. F. A nonprofit organization described under subsection C of this section that acquires ownership of property that was previously owned by another nonprofit organization and used primarily for education shall comply with the requirements of section 42-11152 to qualify and establish eligibility for exemption. G. If a nonprofit organization described under subsection C of this section that holds title to property used primarily for education fails to file the affidavit required by section 42-11152 in a timely manner, but otherwise qualifies for exemption, the county board of supervisors, on petition by the organization, shall direct the county treasurer to: 1. Refund any property taxes paid by the organization for a tax year if the organization submits a claim for the refund to the county treasurer within one year after the date the taxes were paid. The county treasurer shall pay the claim within thirty days after it is submitted to the treasurer. The county treasurer is entitled to a credit for the refund in the next accounting period with each taxing jurisdiction to which the tax monies may have been transmitted. 2. Forgive and strike off from the tax roll any property taxes and accrued interest and penalties that are due but not paid. 42-11105. Exemption for health care property A. Hospitals for the relief of the indigent or afflicted, appurtenant land and their fixtures and equipment are exempt from taxation if they are not used or held for profit. B. Property that is used to operate a health care institution that provides medical, nursing or health related services for persons with disabilities or who are sixty-two years of age or older is exempt from taxation if the property is not used or held for profit. C. Qualifying community health centers as defined in section 36-2907.06 and appurtenant land and their fixtures and equipment are exempt from taxation if they are not used or held for profit. D. Property that is owned by a health care provider recognized under section 501(c)(3) of the internal revenue code and organized as a nonprofit corporation is exempt from taxation if the property is used to provide health care services and the property is not used or held for profit. An exemption under this subsection includes all buildings, appurtenant land, fixtures, equipment and other reasonably required property, including property used for the administration of services. For the purposes of this subsection, "health care provider" means a health care institution as defined in title 36 or an entity that provides health care services directly to patients through health care providers who are licensed pursuant to title 32. 42-11106. Exemption for apartments for elderly residents or residents with disabilities Property that is used to operate a nonprofit residential apartment housing facility that is structured for persons with disabilities or persons who are sixty-two years of age or older is exempt from taxation if either of the following circumstances applies: 1. The property is located adjacent to property that is exempt from taxation under section 42-11105, subsection B and is owned and operated by the same person or association that owns that adjacent property. 2. The federal, state or local government or a nonprofit organization pays a subsidy and: (a) The payment or subsidy is a substantial amount in relation either to the amount given or to the total annual operating expenses to pay for principal, interest and operating expenses. (b) The nonprofit organization is not created or operated for the primary purpose of providing the subsidy or payment. 42-11107. Exemption for institutions for relief of indigent or afflicted Property of charitable institutions for the relief of the indigent or afflicted, appurtenant land and their fixtures, equipment and other reasonably required property including property used for the administration of such relief, are exempt from taxation if the institutions and property are not used or held for profit. 42-11108. Exemption for grounds and buildings owned by agricultural societies The grounds and buildings owned by agricultural societies are exempt from taxation if they are used only for those purposes and are not used or held for profit. 42-11109. Exemption for religious property; affidavit A. Property or buildings that are used or held primarily for religious worship, including land, improvements, furniture and equipment, are exempt from taxation if the property is not used or held for profit. B. Within ten days after receiving an initial affidavit of eligibility submitted under section 42-11152 by a nonprofit organization that owns property used primarily for religious worship, the county assessor, on request, shall issue a receipt for the affidavit. C. The organization shall file with the assessor the affidavit required by section 42-11152 and evidence of the organization's tax exempt status under section 501(c)(3) of the internal revenue code when initially claiming the exemption. D. A nonprofit organization that obtains title to property that was previously owned by another nonprofit organization and used primarily for religious worship shall comply with the requirements of section 42-11152 to qualify and establish eligibility for exemption. E. If a nonprofit organization that holds title to property used primarily for religious worship fails to file the affidavit required by section 42-11152 in a timely manner, but otherwise qualifies for exemption, the county board of supervisors, on petition by the organization, shall direct the county treasurer to: 1. Refund any property taxes paid by the organization for a tax year if the organization submits a claim for the refund to the county treasurer within one year after the date the taxes were paid. The county treasurer shall pay the claim within thirty days after it is submitted to the treasurer. The county treasurer is entitled to credit for the refund in the next accounting period with each taxing jurisdiction to which the tax monies may have been transmitted. 2. Forgive and strike off from the tax roll any property taxes and accrued interest and penalties that are due but not paid. 42-11110. Exemption for cemeteries A. Cemeteries as defined in section 32-2101 that are set apart and used to inter deceased human beings and historic private burial sites and historic private cemeteries as defined in section 41-511.04 are exempt from taxation. B. The owner of a cemetery, historic private burial site or historic private cemetery shall initially establish qualification for exemption under this section by filing an affidavit with the county assessor under section 42-11152. Thereafter, the owner shall notify the county assessor pursuant to section 42-11152 if: 1. Any part of the property is no longer, or will not be, used as a cemetery or has been rezoned, and the assessor shall sever that part of the property from the exempt parcel. 2. Any interest in the title to any part of the property is conveyed to a new owner. 42-11111. Exemption for property; widows and widowers; persons with a total and permanent disability; veterans with a disability; definitions A. The property of widows and widowers, of persons with total and permanent disabilities and of veterans with service or nonservice connected disabilities who are residents of this state is exempt from taxation as provided by article IX, section 2, Constitution of Arizona, and subject to the conditions and limits prescribed by this section. B. Pursuant to article IX, section 2, subsection F, Constitution of Arizona, the exemptions from taxation under this section are allowed as provided in subsections C, D, E, F and G of this section. C. The primary residence of a veteran with a service-connected disability whose disability rating by the United States department of veterans affairs is one hundred percent or whose disability status is total disability based on individual unemployability is fully exempt from taxation. For the purposes of this subsection, a primary residence that is owned by a veteran who is eligible for the exemption under this subsection and the veteran's spouse shall be treated as if owned solely by the veteran. D. The property of a veteran with a nonservice-connected disability whose disability rating by the United States department of veterans affairs is one hundred percent or less or with a service-connected disability whose disability rating by the United States department of veterans affairs is less than one hundred percent is exempt in the amount of $4,188. The limit under this subsection is further limited by multiplying the total exemption amount by the percentage of the veteran's disability, as rated by the United States department of veterans affairs. E. Except as provided in subsection F or G of this section, the property of a widow or widower or a person with a total and permanent disability whose income from all sources does not exceed the limits prescribed by subsection J of this section is exempt in the amount of: 1. $4,188 if the person's total assessment does not exceed the amount provided in paragraph 2 of this subsection. 2. No exemption if the person's total assessment exceeds $28,459. F. The primary residence of a widow or widower who is the surviving spouse of a veteran who was eligible for the exemption under subsection C of this section is fully exempt from taxation. G. The primary residence of a widow or widower who is the surviving spouse of a veteran who was eligible for the exemption under subsection D of this section is exempt in the amount of $4,188. The limit under this subsection is further limited by multiplying the total exemption amount by the percentage of that veteran's disability, as rated by the United States department of veterans affairs. H. On or before December 31 of each year, the department shall increase the following amounts: 1. The total allowable exemption amount under subsection D, subsection E, paragraph 1 and subsection G of this section based on the average annual percentage increase, if any, in the GDP price deflator in the two most recent complete state fiscal years. 2. Beginning in tax year 2026, the total assessment limit amount under subsection E, paragraph 2 of this section based on the average annual percentage increase, if any, in the federal house price index for the two most recent complete state fiscal years. 3. The total income limit amounts under subsection J, paragraphs 1 and 2 of this section based on the average annual percentage increase, if any, in the GDP price deflator in the two most recent complete state fiscal years. I. For the purpose of determining the amount of the allowable exemption pursuant to subsection E of this section, the person's total assessment shall not include the value of any vehicle that is taxed under title 28, chapter 16, article 3. J. Pursuant to article IX, section 2, subsection F, Constitution of Arizona, to qualify for the exemption prescribed in subsection E of this section, the total income from all sources of the claimant and the claimant's spouse and the income from all sources of all of the claimant's children who resided with the claimant in the claimant's residence in the year immediately preceding the year for which the claimant applies for the exemption shall not exceed: 1. $34,901 if none of the claimant's children under eighteen years of age resided with the claimant in the claimant's residence. 2. $41,870 if one or more of the claimant's children residing with the claimant in the claimant's residence either: (a) Were under eighteen years of age. (b) Had a total and permanent physical or mental disability, as certified by competent medical authority as provided by law. K. A person shall establish eligibility for exemption under this section by filing an affidavit with the county assessor under section 42-11152 when initially claiming the exemption and, if claiming the exemption under subsection F or G of this section, providing evidence of the veteran spouse's disability rating by the United States department of veterans affairs or total disability based on individual unemployability to the county assessor. Each year thereafter, the person who claims the exemption prescribed in subsection E of this section or the person's representative shall annually calculate income from the preceding year to ensure that the person still qualifies for the exemption. The person or the person's representative shall notify the county assessor in writing of any disqualifying event. Regardless of whether the person or the person's representative notifies the county assessor as required by this subsection, the property is subject to tax as provided by law from the date of the disqualifying event, including interest, penalties and proceedings for tax delinquencies. A disqualifying event includes: 1. The person's death. 2. The remarriage of a widow or widower. 3. For the exemption prescribed in subsection E of this section, the person's income from all sources exceeding the limits prescribed by subsection J of this section. 4. The conveyance of title to the property to another owner. L. In order for a subsequent primary residence of a person who claims any of the exemptions prescribed by this section to be eligible for exemption, within sixty days after the subsequent primary residence becomes the person's primary residence the person must file with the county assessor of the county in which the subsequent primary residence is located a fully completed exemption transfer form as prescribed by the department. M. Any dollar amount of exemption that is unused in a tax year against the limited property value of property and improvements owned by the individual may be applied for the tax year against the value of personal property subject to special property taxes, including the taxes collected pursuant to title 5, chapter 3, article 3 and title 28, chapter 16, article 3. N. The property tax exemptions prescribed in subsections C, D, E, F and G of this section are exclusive from each other, and an individual is not entitled to property tax exemptions under more than one subsection even if the individual is eligible for an exemption in more than one subsection. O. For the purposes of this section: 1. "Competent medical authority" means any of the following: (a) An individual licensed under title 32, chapter 8, 13, 14, 17, 19.1, 25 or 29 or a comparable law of another state. (b) A registered nurse practitioner as defined in section 32-1601. (c) The United States department of veterans affairs, as evidenced by a disability award letter. (d) The United States social security administration, as evidenced by a written determination letter. 2. "Federal house price index" means the average measure of movement of single-family house prices in the United States published by the federal housing finance agency, or its successor, for this state. 3. "GDP price deflator" means the average of the four implicit price deflators for the gross domestic product reported by the United States department of commerce or its successor for the four quarters of the state fiscal year. 4. "Income from all sources": (a) Means the sum of the following: (i) Adjusted gross income as defined by the department. (ii) The amount of capital gains excluded from adjusted gross income. (iii) Nontaxable strike benefits. (iv) Nontaxable interest that is received from the federal government or any of its instrumentalities. (v) Payments that are received from a retirement program and paid by this state or any political subdivision of this state or the United States through any of its agencies, instrumentalities or programs, except as provided in subdivision (b) of this paragraph. (vi) The gross amount of any pension or annuity that is not otherwise exempted. (b) Does not include monies received from: (i) Cash public assistance and relief. (ii) Railroad retirement benefits. (iii) Payments under the federal social security act (49 Stat. 620). (iv) Payments under the unemployment insurance laws of this state. (v) Payments from any veterans pensions. (vi) Workers' compensation payments. (vii) Loss of time insurance. (viii) Gifts from nongovernmental sources, surplus foods or other relief in kind supplied by a governmental agency. (iv) Veterans disability payments due to the disability rating or status of total disability based on individual unemployability. 5. "Person with a total and permanent disability" means a person who is unable to engage in any substantial gainful activity, for pay or profit, by reason of any physical or mental impairment that is expected to last for a continuous period of at least twelve months or result in death within twelve months as certified by a competent medical authority. 6. "Veteran" means an individual who has served in, and been discharged, separated or released under honorable conditions from, active or inactive service in the uniformed services of the United States, including: (a) All regular, reserve and national guard components of the United States army, navy, air force, marine corps and coast guard. (b) The commissioned corps of the national oceanic and atmospheric administration. (c) The commissioned corps of the United States public health service. (d) A nurse in the service of the American red cross or in the army and navy nurse corps. (e) Any other civilian service that is authorized by federal law to be considered active military duty for the purpose of laws administered by the United States secretary of veterans affairs. 42-11112. Exemption for observatories Observatories that are maintained for astronomical research and education for the public welfare and property that is used in the work or maintenance of observatories, including property held in trust, are exempt from taxation if the observatories and other property are used only for those purposes and are not used or held for profit. 42-11113. Exemption for land and buildings owned by animal control and humane societies Land and buildings that are owned by societies to prevent cruelty to animals and to shelter, care for and control animals are exempt from taxation if the land and buildings are used only for those purposes and are not used or held for profit. 42-11114. Exemption for property held for conveyance as parkland; recapture A. Property that is held by a charitable organization, recognized under section 501(c)(3) of the internal revenue code, for transfer to this state or to a political subdivision of this state to be used as parkland is exempt from taxation if the charitable organization does not receive rent or valuable consideration. B. If property that is exempt under this section is transferred to an entity other than this state or a political subdivision of this state or if the property is used or occupied by or for the benefit of any other person, the charitable organization is liable for all tax, interest and penalties that would be due if the property were not exempt from taxation. 42-11115. Exemption for property held to preserve or protect scientific resources Property that is held by a charitable organization, recognized under section 501(c)(3) of the internal revenue code, to preserve and protect scientific, biological, geological, paleontological, natural or archaeological resources is exempt from taxation. 42-11116. Exemption for property of arts and science organizations Property of musical, dramatic, dance and community arts groups, botanical gardens, museums and zoos that are qualified as nonprofit charitable organizations under section 501(c)(3) of the internal revenue code is exempt from taxation if the property is used for those purposes and not used or held for profit. 42-11117. Exemption for property of volunteer fire departments The property of a volunteer fire department that is recognized under section 501 of the internal revenue code is exempt from taxation if the property is used exclusively for fire suppression and prevention activities and is neither used nor occupied by or for the benefit of any person. 42-11118. Exemption for social welfare and quasi-governmental service property; qualifying activities A. Property that is owned by a volunteer nonprofit organization that is recognized under section 501(c)(4) of the internal revenue code and that is operated exclusively to promote social welfare and provide community quasi-governmental services in an unincorporated area of a county is exempt from taxation. B. To qualify as providing quasi-governmental services under this section, the organization must provide at least six of the following services: 1. Public information and complaint office. 2. Voter registration. 3. Property tax assessment information. 4. Building permit distribution. 5. Resident assistance with deed restrictions and violations. 6. County planning and zoning review. 7. Water resources planning and management. 8. Public safety planning, oversight and maintenance. 9. Government liaison for regional planning activities. 42-11119. Exemption for property of volunteer roadway cleanup and beautification organizations Property that is owned by a volunteer nonprofit organization is exempt from taxation if it meets all of the following requirements: 1. The property is used exclusively for the purpose of performing roadway cleanup and beautification on a gratuitous basis. 2. The property is not used or held for profit. 3. The property is not used or occupied by or for the benefit of any person. 42-11120. Exemption for property of veterans' organizations Property that is owned by a United States veterans' organization that qualifies as a charitable organization and that is recognized under either section 501(c)(3) or 501(c)(19) of the internal revenue code is exempt from taxation if the property is used predominantly for those purposes and is not used or held for profit. 42-11121. Exemption for property of charitable community service organizations Property that is not used or held for profit and that is owned by a community service organization the mission of which is to serve a population that includes persons who are indigent or afflicted, as defined in section 42-11101, and that qualifies as a charitable organization and is recognized under section 501(c)(3) of the internal revenue code is exempt from taxation if the community service organization is primarily engaged in delivering services on that property consisting of fitness programs, camping programs, health and recreation services, youth programs, child care, senior citizen programs, individual and family counseling, employment and training programs, services for individuals with disabilities, meals, feeding programs or disaster relief. 42-11122. Exemption for trading commodities A commodity, as defined in 7 United States Code section 2, that is consigned for resale in a warehouse in this state in or from which the commodity is deliverable on a contract for future delivery subject to the rules of a commodity market regulated by the United States commodity futures trading commission is exempt from taxation. 42-11123. Exemption for animal and poultry feed Animal and poultry feed, including salts, vitamins and other additives, for animal or poultry consumption is exempt from taxation. 42-11124. Exemption for possessory interests for educational or charitable activities A possessory interest consisting of property or improvements pursuant to a lease from this state or a political subdivision of this state is exempt from taxation if it is used by an association or institution that meets all of the following requirements: 1. The purpose of the association or institution is educational or charitable activities. 2. Its annual gross revenues do not exceed fifty thousand dollars. 3. It is not operated for profit. 4. It is recognized under section 501(c)(3) of the internal revenue code. 42-11125. Exemption for inventory, materials and products Stocks of raw or unfinished materials, unassembled parts, work in progress or finished products that constitute the inventory of a retailer, wholesaler or manufacturer that is located in this state and that is principally engaged in reselling the materials, parts or products are exempt from taxation. 42-11126. Exemption for production livestock and animals; definition Livestock and poultry as defined in section 3-1201, aquatic animals as defined in section 3-2901 and colonies of bees are exempt from taxation as provided by article IX, section 13, Constitution of Arizona. For purposes of this section, "poultry" includes ratites. 42-11127. Exempt personal property A. Pursuant to article IX, section 2, subsection F, Constitution of Arizona, personal property that is class two property pursuant to section 42-12002, paragraph 2, subdivision (a) or (b) and that is used for agricultural purposes or personal property that is class one property pursuant to section 42-12001 and that is used in a trade or business as described in section 42-12001, paragraphs 8 through 11 or 13 is exempt from taxation up to a maximum amount of $500,000 of full cash value for each taxpayer. B. On or before December 31 of each year, the department shall increase the maximum amount of the exemption for the following tax year based on the percentage increase, if any, in the employment cost index for total compensation for private industry workers in the two most recent complete state fiscal years. For the purposes of this subsection, "employment cost index" means the average of the employment cost indices reported by the United States department of labor, bureau of labor statistics or its successor for the eight quarters of the two most recent state fiscal years. 42-11128. Exemption for personal property in transit; violation; classification A. The following personal property has no situs in this state and is exempt from taxation: 1. Personal property moving through this state to a final destination outside this state. 2. Personal property consigned to a warehouse in this state from a point outside this state for storage or assembly in transit to a final destination outside this state. B. Property that is claimed to have no situs in this state for the purposes of taxation shall be entered in the records of the warehouse in which it is located as property in transit or futures contract property. The record shall include: 1. The date of receipt. 2. The date of withdrawal. 3. The point of origin. 4. The point of ultimate destination, if known. C. The record of property shall be open at all times to inspection by the department or the taxing authority of a political subdivision of this state. D. A person who files a claim for exemption of property in transit shall do so on a form and in the manner the department prescribes and shall include a certificate of the operator of the warehouse in which the property is located stating that the property is entered in the warehouse records as property in transit. E. The owner or operator of a warehouse in or from which commodities that are exempt under section 42-11122 are deliverable shall file an affidavit with the county assessor between the first Monday in January and March 1 of each year stating that the property in the warehouse is futures contract property. The assessor may require additional evidence of the facts stated by the affidavit, but when the assessor accepts the affidavit as complete and correct, the commodities that are stored or consigned in the warehouse are considered to be exempt from taxation for the tax year under section 42-11122. F. A person who knowingly makes a false statement in any document submitted under this section to an officer who is charged with assessing property for tax purposes is guilty of a class 6 felony. 42-11129. Exemption for property of fraternal societies Property that is owned by a fraternal society or organization that is recognized under section 501(c)(8) of the internal revenue code, if the net earnings of the fraternal society or organization are devoted exclusively to religious, charitable, scientific, literary, educational or fraternal purposes, or section 501(c)(10) of the internal revenue code is exempt from taxation if the property is used predominantly for educational, charitable or religious purposes and for the purposes authorized under section 501(c)(8) or 501(c)(10) of the internal revenue code and no portion of the property is used for the sale of food or beverage to the general public or the consumption of alcoholic beverages by nonmembers of the fraternal society or organization or is used or held for profit. 42-11130. Exemption for public library organizations Property that is not used or held for profit, that is owned by an organization the mission of which is to provide supplemental financial support to public libraries and that qualifies as a charitable organization and is recognized under section 501(c)(3) of the internal revenue code is exempt from taxation if the property is used predominantly for those purposes. 42-11131. Exemption for low-income Indian housing; definitions A. Property owned and operated by a federally recognized Indian tribe or its tribally designated housing authority is exempt from taxation, subject to the following requirements: 1. The property must be used exclusively for the charitable purpose of providing low-income rental housing and related facilities for the use of Indians. 2. The property may not be used, held or operated for profit. 3. No part of the net earnings of the housing authority, if any, may inure to the benefit of any private shareholder or individual. 4. The housing was designed and constructed, in whole or in part, using federal financial assistance pursuant to the Native American Housing assistance and self-determination act of 1996 (P.L. 104-330; 25 United States Code chapter 43) or using tribal government monies. B. To apply for an initial exemption under this section, an Indian tribe or tribal housing authority must submit the following documents to the county assessor: 1. Documents establishing the federal recognition of the Indian tribe. 2. Documents establishing that the housing authority, if any: (a) Is formally designated by the tribe for the purposes of owning and operating rental housing facilities for Indians. (b) Is recognized as a charitable institution pursuant to section 501(c)(3) of the internal revenue code. 3. Legally binding documents that establish a current agreement or other restriction that limits the property’s use to low-income rental housing and related facilities for Indians. C. An Indian tribe or tribal housing authority shall notify the county assessor in writing pursuant to section 42-11152 if the property is conveyed to a new owner or is no longer used for the qualifying purposes under subsection A, paragraph 1 of this section or if any legal or equitable interest in any part of the property is conveyed to a new owner. D. This section shall not be interpreted to prevent an Indian tribe or tribal housing authority from making voluntary payments in lieu of property taxes to a county, city, town, school district or other political subdivision for providing services, improvements or facilities for the benefit of a low-income housing project owned and operated by the tribe or housing authority. Any payments in lieu of tax may not exceed the maximum amount permitted under applicable federal law, if any, or the estimated cost to the county, city, town, school district or other political subdivision of the services, improvements or facilities to be provided, whichever is less. E. For the purposes of this section: 1. "Indian" has the same meaning prescribed in 25 United States Code section 4103. 2. "Indian tribe" has the same meaning prescribed in 25 United States Code section 4103. 3. "Low-income rental housing" means housing for individuals or families having an income that does not exceed the income for a low-income family, as defined in 25 United States Code section 4103. 4. "Related facilities" means nonhousing facilities that are located on the low-income housing property and that are available for the use of Indian tenants in conjunction with their use of the housing facilities. 42-11132. Property leased to educational institutions A. Property, buildings and fixtures that are leased to a nonprofit charter school or a residential treatment and education facility and that are used for educational instruction in any grade or program through grade twelve shall be classified as class nine property pursuant to section 42-12009. If only part of a parcel of real property or improvements to real property is leased for operation of a charter school or a residential treatment and education facility, only the portion so leased qualifies as class nine property. B. Property, buildings and fixtures that are owned by an educational, a religious or a charitable organization, institution or association and leased to a nonprofit educational organization, institution or association are exempt from taxation if the property is used for educational instruction in any grade or program through grade twelve. C. If the educational, religious or charitable organization, institution or association that owns the property files with the assessor the affidavit required by section 42-11152, evidence of the organization's, institution's or association's tax exempt status under section 501(c)(3) of the internal revenue code and an affidavit by the educational organization, institution or association that it uses the property for educational instruction as described in subsection B of this section, the property qualifies for the tax exemption under this section. The educational, religious or charitable organization, institution or association shall notify the county assessor in writing pursuant to section 42-11152 if all or part of the property is conveyed to a new owner or is no longer used for educational purposes. 42-11132.01. Property leased to a church, religious assembly or religious institution A. Property, buildings and fixtures that are leased to a nonprofit church, religious assembly or religious institution and that are primarily used or held for religious worship shall be classified as class nine property pursuant to section 42-12009. If only part of the parcel or improvements is leased to a nonprofit church, religious assembly or religious institution and primarily used or held for religious worship, only the portion so leased qualifies as class nine property. To qualify under this subsection,