Assigned to FIN FOR COMMITTEE
ARIZONA STATE SENATE
Fifty-Fifth Legislature, Second Regular Session
REVISED
FACT SHEET FOR S.B. 1095
property tax exemptions; statutory conformity
Purpose
Conditional on the voter approval of S.C.R. 1011, exempts, from property tax, the property
of veterans with service or nonservice-connected disabilities who are Arizona residents. Updates
property tax exemption amounts and household income limits to reflect the amount adjusted for
inflation in tax year (TY) 2021.
Background
The property of Arizona residents who are widows, widowers, persons with disabilities or
honorably discharged veterans with a service or nonservice-connected disability, is exempt from
taxation to the extent allowed by the Constitution of Arizona and subject to the conditions and
limitations prescribed by statute. Exemptions from property taxation for widows, widowers and
persons with disabilities are allowed in the amount of: 1) $3,000 if the person's total assessment
does not exceed $20,000; or 2) no exemption if the person's total assessment exceeds $20,000. The
Arizona Department of Revenue calculates changes in the exemption and household income
limitations based on the average annual increase, if any, in the gross domestic product (GDP) price
deflator in the two most recent complete state fiscal years using data provided by the U.S.
Department of Commerce (A.R.S. § 42-11111).
The Legislature may exempt up to $50,000 of the full cash value of personal property used
for agriculture purposes or in trade or business (Ariz. Const. art. 9, § 2). The Legislature has
codified an exemption for personal property used for agriculture purposes or in trade or business,
which is adjusted for inflation and is currently valued at $207,366 in TY 2022 (A.R.S. § 42-11127;
ADOR).
The Joint Legislative Budget Committee fiscal note states that the fiscal impact of
S.B. 1095 cannot be determined due to data constraints. The fiscal note includes additional
information and sample scenarios (JLBC fiscal note).
Provisions
1. Exempts the property of a veteran with a service or nonservice-connected disability who is an
Arizona resident from property tax, in the following amounts:
a) $4,117, if the person's total assessment does not exceed $27,970; or
b) no exemption if the person's total assessment exceeds $27,970.
2. Limits the allowable $4,117 property tax exemption for a veteran with a service or nonservice-
connected disability who is an Arizona resident, by multiplying the total exemption amount by
the percentage of the veteran's disability, as rated by the U.S. Department of Veterans Affairs. FACT SHEET – Revised
S.B. 1095
Page 2
3. Requires a veteran with a service or nonservice-connected disability who is an Arizona resident
to initially establish eligibility for the property tax exemption by filing an affidavit with the
county assessor.
4. Specifies that a qualifying veteran is not entitled to a property tax exemption that exceeds the
maximum allowable amount, even if the individual is eligible for an exemption in more than
one category.
5. Updates, from $50,000 to $195,878, the exemption amount for property used in trade or in
business or for agricultural purposes to reflect the amount adjusted for inflation in TY 2021.
6. Updates the household income limits from:
a) $25,000 to $34,301, if no children under 18 years old reside with the claimant; or
b) $30,000 to $41,151, if one or more children under 18 years old or a claimant's child who
has a total and permanent physical or mental disability resides with the claimant.
7. Defines veteran as 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 U.S. 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 U.S. Public Health Service;
d) a nurse in the service of the American Red Cross or in the Army and Navy Nurse Corps;
and
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 U.S. Secretary of Veterans Affairs.
8. Conditions the enactment of this legislation on the enactment of S.C.R. 1011, Fifty-fifth
Legislature, Second Regular Session, by vote of the people at the next general election.
9. Makes technical and conforming changes.
10. Becomes effective on the general effective date or later, subject to the provisions of the
conditional enactment.
Revisions
• Updates the fiscal impact statement.
Prepared by Senate Research
February 2, 2022
MG/slp