property tax assessment; destroyed property

Plain English Breakdown

The exact impact on state finances has not been determined.

Property Tax Assessment for Destroyed Property

SB1294 changes how property tax is assessed when a building or land is destroyed by an accident like fire or flood.

What This Bill Does

• Removes the definition of 'destroyed' in property tax laws, giving county assessors more flexibility to prorate values for properties damaged by accidents.
• Specifies that only properties destroyed by verifiable accidents can retain their original classification for up to five years.
• Updates the process for calculating taxes on partially destroyed property, considering both intact and damaged periods of the year.

Who It Names or Affects

• Property owners whose buildings or land are destroyed by accidents like fires or floods.
• County assessors who must now follow new guidelines for assessing property taxes on damaged properties.

Terms To Know

Proration

The process of adjusting the value and tax amount based on how long a property was intact before being destroyed.

Classification

A category that determines the type of taxes a property pays, which can change if the use or condition of the property changes.

Limits and Unknowns

• The bill does not specify how much it will cost to implement these changes.
• It is unclear what happens to properties destroyed by causes other than accidents like fires or floods.

Official Summary Text

SB1294 - 572R - Senate Fact Sheet

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ARIZONA STATE SENATE

Fifty-Seventh
Legislature, Second Regular Session

FACT SHEET FOR
S.B. 1294

property tax assessment;
destroyed property

Purpose

Retroactive to
September 14, 2024, expands the county assessor's authority to prorate the
value of destroyed property for property tax purposes by removing the statutory
definition of
destroyed
. Specifies that only a property destroyed by a
verifiable accident, including fire, flood or an act of God, may retain its property
classification for five years or until a change in use occurs.

Background

Prior to 2024, statute
required county assessors, if the county assessor found that the property had
been destroyed after closing the tax rolls, to prorate the property value and
compute the tax from the lien date to the date of destruction.
Laws 2024, Chapter
34
limited proration to only property destroyed by a verifiable accident,
including fire, flood or any other act of God, and allowed property destroyed
by a verifiable accident to remain in the same classification for up to five
years or until an objectively verifiable change in use, whichever is earlier (
A.R.S.
� 42-15157
).

There is no anticipated fiscal impact to the state General
Fund associated with this legislation.

Provisions

1.

Expands the county assessor's authority to prorate the value of
destroyed property by removing the statutory definition of
destroyed
.

2.

Specifies that the county assessor's authority to maintain a property
classification in place for a period of five years or until an objectively
verifiable change in use applies only to property that has been destroyed by
verifiable accident, including fire, flood or any act of God.

3.

Makes technical and conforming changes.

4.

Becomes effective on the general effective date, retroactive to
September 14, 2024.

Prepared by Senate Research

January 29, 2026

MG/SJ/hk

Current Bill Text

SB1294 - 572R - S Ver

Senate Engrossed

property tax
assessment; destroyed property

State of Arizona

Senate

Fifty-seventh Legislature

Second Regular Session

2026

SENATE BILL 1294

AN
ACT

amending section 42-15157, Arizona
Revised Statutes; relating to property tax assessment.

(TEXT OF BILL BEGINS ON NEXT PAGE)

Be it
enacted by the Legislature of the State of Arizona:

Section 1. Section 42-15157, Arizona Revised
Statutes, is amended to read:

START_STATUTE
42-15157.

Destruction of property after rolls closed; proration of
valuation and taxes

A. If a property is destroyed after the county
assessor closes the rolls, the property owner may file a notice of claim
pursuant to section 42-16254 or the county assessor may issue a notice of
proposed correction pursuant to section 42-16252 to prorate the valuation
of the property from the date of destruction.

B. If the county assessor finds that the property
has been destroyed:

1. The county assessor shall prorate the value of
the property from the lien date to the date of destruction.

2. For the purposes of classifying
property under chapter 12, article 1 of this title, the county assessor may
maintain the property classification in place on the date of destruction for a
period of five years or until an objectively verifiable change in use occurs,
whichever is sooner.

3.
2.
The
county assessor shall notify the property owner of the property assessment
pursuant to the applicable notice requirements provided in this chapter or
chapter 16 of this title.

4.
3.
The
county treasurer shall compute the amount of taxes assessed against the
property by applying the tax rate for the appropriate tax year to the original
valuation prorated for the portion of the year the property was intact, plus
the tax rate for the appropriate tax year to the reassessed value of the
property prorated for the balance of the year.

C. For the purposes of this section,
"destroyed" means physical destruction caused by a verifiable
accident, including fire, flood or any other act of God.

C. If the county assessor finds that
a property has been destroyed by a verifiable accident, including fire, flood
or any other act of god, the county assessor may maintain the property
classification in place on the date the property is destroyed for a period of
five years or until an objectively verifiable change in use occurs, whichever
is earlier.
END_STATUTE

Sec. 2.
Retroactivity

This act applies retroactively to from
and after September 13, 2024.