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Understanding the Arizona Property Tax System

30 September 2009   Pam Pearsall, County Assessor
Your property tax bills are on the way; and if you expect the amount to have gone down, you may be disappointed. County Assessor Pam Pearsall explains the nitty-gritty.

timeline_taxesThe 2009 Property Tax Bills will be mailed in September. The State of Arizona has reinstituted a State Property Tax and you will be seeing this State Tax on your 2009 Property Tax Bill.

The Arizona tax system has been called a Shell Game based on the number of departments and jurisdictions that are involved in arriving at the actual tax amount. However, the Property Tax system relies on two figures to generate an actual tax:

1.) Property Valuation: Assessor's have a constitutional obligation to set valuations for each taxable property based on market information. The Assessor does not create the value, the value is created by the decisions people make in the market place. The Assessor determines the value by using sales/market data, costs, and income (on commercial properties only).

2.) Tax Rate: Is set by individual Taxing Authority's aka Jurisdictions (Schools, County, College, Fire, etc ... ). The Jurisdiction(s) each taxpayer contributes to are located in the middle section of your tax bill along with a breakdown of the actual tax dollars those jurisdiction(s) will collect from your bill.

There is a common perception that if your valuation increases or decreases that your tax amount will follow; that is a false perception. Valuations are only used to determine each property owner's piece of the pie. The size of the pie is determined by the budgets of each jurisdiction. For example if a jurisdiction sets their budget at $1,000,000, they will receive that amount of money regardless if the Assessor's values increase or decrease.

Click to view the movie below for a full explanation:

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TAX AMOUNTS ARE DERIVED FROM THE BUDGETS OF EACH TAXING JURISDICITION. IN ORDER TO CONTROL TAX AMOUNTS, YOU MUST FIRST LOOK AT THE BUDGET BEING SET BY THE INDIVIDUAL TAXING ATHORITY IN YOUR AREA.

The fiscal year for your local government begins July 15th of each year. Jurisdictions will publish a notice of their budget meeting in your local newspaper. By attending these budget meetings, you will be able to give your input when appropriate and stay informed at how your tax dollars are being used. I also encourage you visit the website of the Arizona Tax Research Association (ATRA) http://www.arizonatax.org/. which is a taxpayer watch dog organization, for further information.

Simply put - The amount of tax increases or decreases in a tax bill are determined by the increase or decrease in jurisdictional budgets, not the increase or decrease in the property valuation. The valuation is only used to determine how the budget will be proportioned to the taxpayers.

Please visit our website at http://www.co.yavapai.az.us/Assessor.aspx for further information on Assessor Valuation.

Pamela J. Pearsall, Yavapai County Assessor