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ARIZONA STATE SENATE
Fifty-Seventh Legislature, Second Regular Session
AMENDED
citrus; fruit;
vegetable; fund; posting(NOW: property tax; exemption; veterans; disabilities)
Purpose
Exempts a veteran with a service or nonservice-connected disability from the requirement for the veteran's household income to not exceed the statutory income cap in order to qualify for a property tax exemption.
Background
All
property in Arizona is subject to taxation with certain exemptions outlined in
the Arizona Constitution and prescribed by statute. The property of Arizona
residents who are widows, widowers, persons with total and permanent
disabilities or veterans with service or
nonservice-connected disabilities are exempt from property tax subject to the
conditions and limitations prescribed by statute.
To qualify for a property tax exemption, a claimant's total income from all sources is subject to a statutory cap which is adjusted for inflation annually. The household's total income from all sources may not exceed: 1) $39,865, for households with no children under 18 years old; or 2) 47,826, for households with children under 18 years old or children with a total and permanent disability.
A widow, widower, person with a total and permanent disability or veteran with a service or nonservice-connected disability must initially establish eligibility for the property tax exemption by filing an affidavit with the county assessor. Each following year, the person must annually calculate income from the preceding year to ensure that the person still qualifies for the exemption and notify the county assessor of any event that disqualifies the person from further exemption (A.R.S. §§ 42-11002 and 42-11111).
The Joint Legislative Budget Committee issued a fiscal note for S.B. 1365 which estimates a state General Fund savings of $661,000 beginning in FY 2028, which is attributable to lower homeowner's rebate expenses for the statutory school funding formula (JLBC Fiscal Note).
Provisions
1. Exempts a veteran with a service or nonservice-connected disability from the income cap.
2. Applies the exemption from the income cap to taxable years beginning January 1, 2027.
3. Makes conforming changes.
4. Becomes effective on the general effective date.
Amendments Adopted by Committee
· Makes technical changes.
Amendments Adopted by Committee of the Whole
· Adopted the strike-everything amendment.
Senate Action
MABS 2/16/26 DPA/SE 6-0-1
Prepared by Senate Research
March 3, 2026
MG