On January 8th 2016 the annual 2016 Arizona Business Property Statements for all Business, Agricultural, Legal class 4 and Leasing accounts will be mailed to all active accounts.
The Business Personal Property Division locates and appraises all taxable Personal Property for businesses, agricultural businesses, leased property, and Improvements on Possessory Rights (IPRs).The Business Personal Property appraisers also perform field reviews and personal property audits.
Frequently Asked Questions:
Business Personal Property Valuation FAQ
What is Personal Property and specifically, what is Business Personal Property?
For property tax purposes in Arizona, Personal Property is defined as all types of property except Real Estate. Taxable Personal Property includes mobile homes, manufactured homes (not affixed), and property used for commercial, industrial, and agricultural purposes. Personal Property is considered movable—not permanently attached to the 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.
Business Personal Property can be further defined as assets used to operate a business, farm, ranch, or residential rental activity. It includes, but is not limited to office furniture, all types of equipment, non-licensed vehicles (such as tractors), supplies, spare parts, leasehold improvements, appliances, furniture, etc.
IPR's are covered in the IPR section.
Is all Personal Property Taxed?
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 for private activities are exempt from property taxation.
Is there a difference between Personal Property attached to the Real Property and Unsecured Personal Property?
In order to secure the value of personal property to the real property, the ownership must be the same. If the property is secured, the taxpayer receives one tax bill, which includes both the real and personal property. Unsecured Personal Property receives a separate tax bill.
How does the Assessor determine my Personal Property's value?
Personal property appraisers that establish market value use many different sources. Retail and wholesale price books, vehicle "blue books", industry catalogs, and owner's records of purchases are all used. The Department of Revenue Personal Property Manual contains tables, which include factors for both appreciation and depreciation, which can then be used to arrive at Replacement Cost New Less Depreciation (RCNLD). It is synonymous with Full Cash Value (FCV). That is the value that the Assessor places on each item of personal property in your possession as of December 31 of the prior year.
The original cost of a personal property item includes the purchase price plus all freight and installation costs as well as any paid sales taxes for the item.
The Arizona Department of Revenue's Personal Property Manual is available on-line. It contains information regarding the identification and valuation of locally assessed personal property, taxpayer reporting requirements, valuation tables, and descriptions of the methods of making value adjustments that are used in the assessment of many kinds of personal property. The manual describes a wide variety of personal property items, including information on the identification and valuation of mobile home and manufactured housing units. An explanation of the personal property appeal process (which differs in some respects from the real property appeal process) is also included. Find it on the AZDOR Web site.
What is Assessed Value?
The Assessed Value is based on the Full Cash Value (after the application of the Business Exemption, where applicable and if you are qualified A.R.S. § 42-11127) 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 Full Cash Value of Personal Property, other than mobile homes, is synonymous with Limited property value.
What is Legal Class?
The Legal Class is determined by the owner's use of the personal property.
What is Legal Class Ratio?
State statutes determine the percentages of the value that will be taxed of each class, commonly referred to as the "Assessment Ratio". The Assessment Ratio is not a Tax Rate.
The following are the most common Legal Classes and their Assessment Ratios:
What is the lien date and valuation date for Personal Property?
The lien date and valuation date is January 1st of each year. The Assessor does not prorate personal property. If you sell your property after December 31st, and do not wish to pay the full amount of the tax, the personal property taxes that are generated based on the full cash value of your personal property should be pro-rated between the seller and buyer.
Business/Agricultural Personal Property Reporting FAQ
It is the responsibility of the Taxpayer to report all taxable personal property annually upon demand by the Assessor. To facilitate this, Business and Agricultural Personal Property Statements are mailed annually to the Taxpayers for completion.
These statements, form DOR 82520 for Business/Leasing or DOR 82520A for Agricultural, are designed to allow the property identification, year acquired and original acquisition costs. This information enables the Assessor to apply the appropriate property valuation table needed to calculate the current Full Cash Value of the property. Audits may be used to check accuracy and completeness of the listings.
Some key points on reporting are:
- Property is reported as of December 31 of the previous year unless otherwise specified.
- Original Property Statements are due back in the Assessor's Office on or before April 1 (or within 30 days of the demand, whichever is later).
- All property under the control of the Taxpayer as of December 31 of the prior year must be reported.
- The Property Statement form must be complete.
- The Property Statement form must be signed by the owner or an authorized agent.
- The Property Statements shall not be open to the public.
- The owner should attach supplemental information where appropriate.
- Failure of the owner to timely prepare and return the Property Statement shall result in an addition of a ten (10) percent penalty to the Full Cash Value.
- All Property Statements are subject to audit.
I've received an Arizona Business Property Statement. Where do I send my payment?
The Business Personal Property Statement is not a Tax Bill; it is the annual reporting form for your business to submit changes on your account, (additions/deletions to equipment, name, and address changes).
This is the first time I've 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 with a Description, the Year it was purchased and the Original acquisition cost (to include any freight, installation, special support, special wiring, special plumbing, and sales tax paid).
I own a business and need to begin reporting, but I wasn’t mailed a form. How should I report this year?
If you did not receive a form for the current tax year, and it is before February 1st, you should contact our office at 724-8700 and request one be mailed to you. If it is after February 1st can, you can download the AZDOR 82520B form here, complete it, and mail it to us by April 1st. Contact (520) 724-8700 if you have any questions.
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 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 verify that the acquisition year you are deleting is preprinted on the front of the form, otherwise that deletion will not be considered).
On what date are the Personal Property Statements mailed and when are they due back in the Assessor's Office?
The Statements are mailed prior to January 31 of each year. The completed and signed Statements must be returned to the Assessor by April 1. If you cannot complete your form by April 1, you may request an extension in writing from the Assessor no later than April 1. The Assessor may grant a short extension.
Why do I have to return the original Personal Property Statement?
Our Statements are bar-coded with your information. This enables our office to scan information into our file. We do not accept faxed Statements.
The name and/or address on the Business Property Statement is wrong. How do we correct this?
Make the correction on the Personal Property Statement in Section 1. The Assessor mails the Statement to the name that is on file. If the name is misspelled, it does not render the Statement or subsequent Notice of Value invalid.
What is a business exemption and who may be eligible?
Commercial business personal property & Qualified Agriculture Equipment is eligible for exemption per A.R.S. § 42-11127. A business owner can claim the exemption one time annually in the State of Arizona. Residential rental property and non-profit/fraternal organizations are not eligible for the business property exemption. Please refer to the AZDOR Personal Property manual for the Business allowance amount. the AZDOR Web site.
I have multiple business locations. Do I get the business exemption on each location?
In order for to process your exemption, you will need to provide us with your federal employer identification number. If your businesses share the same number, the exemption will be allocated between your locations. If you have any questions regarding the application of the exemption, please call our office at (520) 724-8700 and ask to speak to your appraiser.
Do I need to report assets that I expense?
All assets need to be reported, whether they are expensed or capitalized. An expensed asset is an asset for which the entire cost is deducted from income in the year of purchase. A capitalized asset is an asset listed on the taxpayer's books, which is depreciated over two years or more years.
I lease some equipment. Do I need to report it on my Business Personal Property Statement?
Leased or rented property needs to be reported under Section 5 of the Personal Property Statement. The owner, not the lessee is assessed for the property. Liability for the payment of the tax may be delineated in your lease agreement; however, the Assessor is not bound by the agreement.
I just purchased the equipment I was leasing. How do I report this to the Assessor?
You need to report the original cost and year of acquisition of the equipment. Do not report the amount you paid at the close of the lease.
I have equipment located at my place of business that I do not own or lease. Do I need to provide that information to the Assessor?
Please provide the Assessor with the owner's name, address, and brief description of the property, i.e. vending machine, ATM, recycle bins, etc. This equipment is assessable to the owner of the equipment.
My business is organized as a not-for-profit. Why do I need to report my assets?
All property is taxable unless specifically exempted by law. Not-for-profit entities need to seek exemption through the Exemption Section of the Assessor's Office to determine if they are eligible. Statutes regarding exemptions may be found at A.R.S. § 42-11101 thru 11155 (Article 3 and Article 4). Read more about Exemptions. To reach someone in the Exemption Section, call (520) 724-7500.
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 stating that the business closed. In the letter, you need to identify the Account Number, the date of closing, and the disposition of the equipment.
How and when will I know if my account has been processed?
The Assessor's Office mails out Valuation Notices in July. The Valuation Notice will identify your Full Cash Value, Assessed Value, and appeal deadlines.
What if I disagree with the values on the Valuation Notice?
By statute, you have 30 days from the notice's mailing date to file a Petition for Review form 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 with the Arizona State Board of Equalization within 20 days of the Assessor's Decision mailing date. Personal Property Appeal forms are located on our Assessor Forms page. Look for the Personal Property Petition for Review of Valuation (DoR form 82530).
Improvements on Possessory Rights FAQ
What is an Improvement on Possessory Rights (IPR) and how is it valued?
An Improvement on Possessory Rights, also referred to as IPR's, are buildings, structures or other improvements located on land not owned by the owner of the improvements. These are improvements which are located on tax exempt land which is owned by the Federal government, the State or some other tax exempt municipality in which the owner of the improvements has a leasehold interest. According to A.R.S. § 42-19003 and 42-19116, the improvement must be entered on the Unsecured Assessment Roll for the billing of taxes. Improvements may consist of, buildings, wells, appurtenances, stock tanks, and any other fixed property. Cabins and Farm Houses on Federal or State land would fall into this category.
Most IPRs are valued in the same manner as all other improvements, utilizing the Construction Cost System where applicable.
How do I notify the Assessor's Office when I sell an IPR?
You should record the instrument of sale and provide the Assessor with a copy, then contact the personal property section at (520) 724-3111.
When are the Personal Property Valuation Notices mailed?
The Notice of Value will be mailed at the end of July each year. This will allow changes made as the result of an appeal to be updated prior to the mailing of the unsecured tax bills in September. Personal Property Appeal forms are located on our Assessor Forms page. Look for the Personal Property Petition for Review of Valuation (AZDOR form 82530).
Where do I pay the Personal Property tax?
Taxes are payable to the Pima County Treasurer at 240 N Stone Ave (Lower Level), Tucson, AZ 85701. Please write the eleven-digit “State Code Number”, also known as a reference number, on your check. You may contact them by phone at (520) 724-8341.
I still have questions regarding Business Personal Property. Whom should I contact?
Our frequently asked questions page is a work in progress. For additional information, you may either call (520) 724-8700 or email Debbie Carter.