Tax Cut on Commercial Properties Encourages Investment in AZ, Reduces Burden on Small Businesses
Wednesday, April 20, 2022
FOR IMMEDIATE RELEASE
Tax Cut on Commercial Properties Encourages Investment in Arizona while Reducing Burden on Small Businesses
PHOENIX, ARIZONA- Arizona will soon become more competitive in expanding and attracting new business developments and investments to our already strong economy, thanks to SB 1093, sponsored by Senator J.D. Mesnard (R-17).
The bill passed a final vote in the Senate on Monday and now awaits Governor Doug Ducey's signature.
The legislation would lower the percentage of assessed valuation for commercial property in order to reduce the imbalance in Arizona property taxes that unfairly saddles our small businesses with a disproportionate share of the property tax burden. It would also protect residential and other properties by cutting the state equalization property tax rate to offset any shift of tax liability, while using general fund money to hold school district budgets harmless.
This tax reform has been a big priority for Sen. Mesnard and is the culmination of an effort that began some 20 years ago, when a 25% assessment ratio meant Arizona had some of the highest business property taxes in the country. Over the years, the ratio has gradually been lowered, most recently with passage last year of Sen. Mesnard’s SB 1828, which reduced the ratio to 16% by 2025. This year’s SB 1093 represents the final piece, bringing to fruition by 2027 what has been the long-term and broadly supported aim of achieving a 15% ratio.
"Property taxes are a critical issue to all businesses, but especially for our smaller establishments. This bill will provide broad relief to our job creators," said Sen. Mesnard. "Reducing the tax burden allows our small businesses to invest more money in their workforce and in expanding operations. As a result, wages naturally increase, consumers have more money to spend, and our economy grows stronger by the day. These kinds of fiscally conservative policies are why Arizona is ranked one of the top three states in the nation for growth."
Once signed into law, this legislation would take effect 90 days after the legislature adjourns.
For more information, contact:
Director of Communications
Arizona State Senate Republican Caucus