SB 1230
Initials VP/AA Page 1 Ways & Means
ARIZONA HOUSE OF REPRESENTATIVES
Fifty-sixth Legislature
First Regular Session
Senate: FIN DPA 7-0-0-0 | 3rd Read 16-13-1-0
SB 1230: tax exemptions; affidavit
Sponsor: Senator Mesnard, LD 13
Committee on Ways & Means
Overview
Provides procedures for a qualifying health community center, qualifying health care organization,
hospital or other nonprofit entities to obtain an exemption letter for transaction privilege tax
purposes and outlines requirements regarding property tax exemption for various entities.
History
In current statute, Arizona does not provide an overall exemption from transaction privilege tax
for nonprofit organizations. Some organizations that qualify as nonprofit organizations must apply
for an annual exemption letter from the Arizona Department of Revenue (DOR). These
organizations include qualifying hospitals, qualifying health care organizations and qualifying
health care community centers. (azdor.gov)
Current statute exempts nonprofit organizations, religious organizations, widows, widowers,
people with a permanent disability, veterans with a permanent disability and educational, religious
or charitable organizations, institutions or associations from the requirement of filing affidavits
until all or part of the property is conveyed to a new owner or is no longer used for its qualifying
purposes. Once the entity is no longer used for its exemption qualifying purposes, they must notify
the assessor of the change in writing. (A.R.S. § 42 – 11104) (A.R.S. § 42 - 11109) (A.R.S. § 42 -
11111) (A.R.S. § 42 - 11132)
For cemeteries, historic private burial sites, historic private cemeteries, Indian tribes or tribal
authorities, educational, religious or charitable organizations, institutions or associations as well
as veterans' organizations current statute states that they must file an affidavit establishing their
qualification for exemption and are not required to file an affidavit thereafter unless any part of the
property is being used for non-qualifying exemption purposes or any part of the property is
conveyed to a new owner. (A.R.S. § 42 – 11110) (A.R.S. § 42 - 11131) (A.R.S. § 42 - 11132)
(A.R.S. § 42 – 11132.02)
Provisions
1. Outlines procedures for qualifying community health centers, qualifying health care
organizations, hospitals or other nonprofit entities to obtain an exemption letter for transaction
privilege tax purposes from the DOR. (Sec. 1)
2. Specifies that an exemption letter is valid until the entity no longer qualifies. (Sec. 1)
3. Requires that entities that no longer qualify for an exemption letter notify the department. (Sec.
1)
4. States that if an entity no longer qualifies for an exemption letter, they are liable in an amount
equal to any tax, penalties and interest that the seller would have been required to pay if the
seller had not been furnished the exemption letter. (Sec. 1)
☐ Prop 105 (45 votes) ☐ Prop 108 (40 votes) ☐ Emergency (40 votes) ☐ Fiscal Note SB 1230
Initials VP/AA Page 2 Ways & Means
5. Requires the following to file an affidavit with the county assessor when initially claiming their
tax exemption:
a) Nonprofit organizations; (Sec. 2)
b) Religious organizations; (Sec. 3)
c) A widow, widower, person with a permanent disability or veteran with a permanent
disability; and (Sec. 5)
d) Educational, religious or charitable organization, institution or association. (Sec. 7)
6. Requires the following to notify the county assessor if any part of their property is being used
for non-qualifying exemption purposes or any part of the property is conveyed to a new owner:
a) Cemeteries; (Sec. 4)
b) Indian tribe or tribal housing authority; (Sec. 6)
c) Educational, religious or charitable organization, institution or association; and (Sec. 7)
d) Veterans' organization. (Sec. 9)
7. Makes technical changes. (Sec. 2,3,4,5,6,7,8,9,10,11)
8. Makes conforming changes. (Sec. 1)