Legislation is in the works in Arizona that would lower property taxes for businesses in the state. The goal is to bring more jobs to the state without shifting the tax burden to homeowners or reducing funds to local governments and schools.
What is the current law on commercial business property taxes?
Arizona takes an unusual approach towards the calculation of property taxes, compared to other states. Currently, homeowners pay property taxes in the amount of 10% of the market value of their property. Commercial businesses pay property taxes in the amount of 18% of the market value of their property. These taxes are used to fund local governments and school districts.
How would SB 1108 change current property tax law?
Under SB 1108, businesses would pay property taxes in the amount of 17% of the market value property, and this percentage would go incrementally down until it reached 15%. The state would make up the tax difference owed, meaning homeowners would not see their property taxes increase. This would ensure the assed value of local governments and school districts will not be negatively affected. The Senate Finance Committee approved SB 1108 in a 7-3 vote. The bill will now move on to the full Senate for consideration.
Learn more about commercial real estate law
As of right now, SB 1108 is just that — a bill. Current law on commercial property taxes still stands. Those in Arizona who have questions about real estate laws in the state are invited to explore our firm’s website to learn more.