Maricopa County to pay $1.6M after property tax lawsuit
The Associated Press/Matt York
A Fulton Homes subdivision in Gilbert, Ariz. A successful challenge of how certain property taxes are billed is costing Maricopa County $1.6 million, with the majority of the funds going to pay U.S. postage charges.
A successful challenge of how certain property taxes are billed is costing Maricopa County $1.6 million, with the majority of the funds going to pay U.S. postage charges.
In 2021, the Arizona Court of Appeals upheld a decision that said a “property’s limited property value must be calculated using a specific statutory calculation” if there is a change in use from a primary residence to a non-primary residence or rental or vice-versa, according to a Maricopa County press release.
By statute, Maricopa County officials must send out notices —79,000 of them — of the proposed correction by certified mail, said Devero Bogart, a spokeswoman for the Maricopa County Assessor’s Office.
As of Dec. 5, officials sent out notices for “roughly” 34,000 properties.
Some property owners will see an increase in the limited property value, some will see a decrease, the spokeswoman said. In addition, officials have had “more than 700 meeting requests” with Maricopa County property owners who have questions about how the court decision effects them, she said.
The meetings were expected to be complete “by Dec. 6 and the response to the dispute will be completed and mailed by Dec. 15,” according to the press release.
The deadline of Dec. 15 is an “internal deadline” set by the Maricopa County Assessor’s Office, she said. Officials have hired temporary employees to help with data entry. But the lion’s share of the $1.6 million is to pay for the certified mail charges.
The change will apply to tax years 2022 and 2023.
The funds will come out of the Maricopa County general fund dollars, said Fields Moseley, Maricopa County spokesman.
“We really have done — I’d like to say — a pretty good job (of letting property owners know about the issue),” Bogart said.
In October, the county held three public education sessions where subject matter experts helped property owners understand the changes to the law, the press release stated.
Officials are sending out the notices in batches and are expected to hold additional education sessions as more notices are sent out, Bogart said.
The class-action lawsuit “alleges that Maricopa County improperly and erroneously assessed and collected real property taxes” from some property owners in Maricopa County from the affected tax years 2015 to 2021, a summary of the lawsuit said.
However, in 2022, the Arizona Legislature passed Senate Bill 1267, a bill that said property owners who change between primary and non-primary residences or vice versa will not trigger a change in use for tax purposes.
Arizona Court of Appeals Division 1 Judge Michael J. Brown delivered the opinion of the case and its plaintiff, Ahmad Zaky Qasimyar.
Taxpayers contend that reclassifying the “properties because they were owner/occupied primary residences was a change in use that required the (limited property values) to be calculated pursuant to “Rule B,” the opinion stated.
“We are still in the process of recalculating properties that will see an increase to their (limited property value) because of the Rule B application to their property,”Bogart said. “But as a reminder, they will not see additional tax liabilities for the tax year identified in the (notice), but as the same with the decrease, that new value will serve as the foundation for subsequent tax years. So it could impact the owner’s tax responsibility for future years. But we do not deal with tax calculations, only property values. Any questions specific to tax bills will need to be directed to the Maricopa County Treasurer’s Office.”
What has a higher assessed value, a primary or non-primary residental?
It depends on the property, Bogart said.
By statute, the limited property value “is the value used to calculate a property’s “assessed value,” which is applied to tax rates, and cannot exceed” the property’s full cash value, she said.
The limited property value by using two different rules — Rule A and Rule B, Bogart said.
“Rule A is used to calculate about 95% of properties in Maricopa County each year and states that a property’s (limited property value) can go up to but no more than 5% each year unless there is significant change to the property or a change in how the property is used,” Bogart said.
Rule B is applied when there is a “significant change” to the property.
“In these instances, a Rule B is applied,” Bogart said. “Rule B basically instructs that the prior year’s LPV cannot be used as a baseline and the Assessor must reset the LPV to a percentage of the Full Cash Value comparable to similar properties in the same legal class.”
For information,
Brent Ruffner joined Independent Newsmedia, Inc., USA, in 2021 where he writes about developments at TSMC and Maricopa County issues, including election topics.
He's written about stories that range from accusations that a Mesa monkey breeding facility is unsafe to what to do if you encounter a rattlesnake in the desert.
Community: He is a supporter of the American Cancer Society.
Education: Bachelor's degree in Journalism and Mass Communication, Arizona State University, May 2007.
Random Fact: He met former San Francisco Giants outfielder Willie Mays at a Phoenix Firebird game after winning a contest for an autographed baseball.
Hobbies: Hiking in the woods and collecting sports memorabilia.
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