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Property Tax Appeal Season Underway in Arizona

Tax Law Alert

Deadlines are approaching for initiating administrative appeals of Arizona property tax valuations for tax year 2012.

The earliest filing deadlines are for real property valued by a county assessor. This year, for real property located in Maricopa County, owners have until April 26, 2011 to file a petition for review with the Maricopa County Assessor. For real property located in Pinal County, the last day to file a petition is April 29, 2011. In other Arizona counties, the filing deadline is 60 days from the date the assessor mailed the notice of valuation (and county assessors normally mail notices of valuation by March 1). The assessor will have until August 15, 2011 to issue a decision on a petition for review. The assessor's decision is final unless the owner appeals the decision to the appropriate board of equalization, within 25 days of the date of the decision, or to superior court, within 60 days of the mailing of the decision. The owner has at least 60 days to appeal the decision of the board of equalization to superior court.

Property valued by the Arizona Department of Revenue (such as pipelines, mines, and property of airlines and utilities) has its own calendar for valuation appeals. The Department must issue preliminary valuations for tax year 2012 by June 15, 2011. The owner has until July 15, 2011 to request a hearing, and the Department must issue a hearing determination by August 31. The owner may appeal the Department's determination, either to (i) the State Board of Equalization by October 1, 2011 (or, if later, within 15 days of the mailing of the Department's decision), or (ii) superior court by December 15, 2011.

Business personal property also has its own calendar for valuation appeals. The county assessor has until August 30, 2011 to issue a notice of valuation for tax year 2011. The owner has 20 days from delivery of the notice to file a petition with the assessor, and the assessor has 20 days from the filing of a petition to issue a decision. The owner may appeal the assessor's decision within twenty days from the mailing of the decision by filing a notice of appeal with the appropriate board of equalization.  The owner has at least 60 days to appeal an adverse decision from the board of equalization to superior court.

An owner who elects to forego altogether the administrative appeal process for real property may nonetheless appeal a 2012 valuation to superior court by December 15, 2011. This option for a direct judicial appeal applies to all property valued by the Department and real property valued by a county assessor. It does not apply to business personal property valued by a county assessor.

For many categories of real property, the property's valuation is its market value. Market value is ascertained by using standard appraisal methods and techniques. Accepted approaches to value are reproduction cost, capitalization of income and comparable sales. The county assessors generally rely on depreciated replacement cost as their starting point to arrive at market value, but market adjustments to the cost model may not always result in valuations that reflect market value based on income, comparable sales, or a sale of the property.

Quarles & Brady's state and local tax attorneys routinely advise clients about property tax provisions and represent property owners at all stages of administrative and judicial appeals of valuation and/or classification. If you have any questions regarding property taxes or need assistance in identifying opportunities for significant property tax relief, please contact Mark Vilaboy at (602) 229-5508 / mark.vilaboy@ quarles.com or your local Quarles & Brady attorney.