Business Personal Property Tax Exemption
Issue Overview: In November 1996, voters approved proposition 101, eliminating the tax on the first $50,000 worth of business personal property. In 1998, the legislature passed legislation to accelerate the depreciation schedule for business personal property.
Currently, for tax year 2005, the exemption for Commercial and Agricultural Business Personal Property is $57,632, as adjusted for inflation.
Examples of taxable personal property (as cited by the Arizona Department of Revenue) include:
- Signs, office supplies
- Phone, facsimile and other communication equipment
- Mobile homes or offices (non-affixed)
- Leasehold improvements (some exceptions)
- Office equipment, such as desks, chairs, computers, printers, copiers
- Cash registers, safes
- Shopping carts
- Food preparation equipment
- Manufacturing equipment, such as fork lifts, cranes, hoists
- Ranch and farm equipment
- Hotel/Motel/Apartment Furnishings
This legislative session, Senator Barbara Leff has sponsored SB 1223, a bill that:
- Increases the current exemption to $150,000. Currently, the exemption for tax year 2005 is almost $58,000 ($50,000, adjusted for inflation).
- Changes tax form filing due date to May 1. Currently, the due date is April 1 for the prior taxable year. According to some NFIB-member CPAs, the date change is needed because information is often used from business owners' taxes that are due April 15. Moving the date will ensure a more accurate filing.
- Allows for a 30-day filing extension, if good cause is shown. Currently, the Department of Revenue does not offer filing extensions for this type of tax. However, filing extensions exist for other tax collections.
NFIB Position: For over a decade, NFIB/Arizona members have cited this issue as a top priority. NFIB will continue to encourage lawmakers to increase the business personal property tax exemption.
Issue Status: Due to concern as to whether the issue needs voter approval or not, SB 1223 was pulled from consideration by the bill sponsor. NFIB will purse further discussions on how the business community can accomplish the goals of setting appropriate deadlines for submitting the tax, as well as increasing the exemption amount.
