Senate Bill 1294

Senate Bill 1294

House Bills
June 08, 2026•2 min read

senate Engrossed
property tax assessment; destroyed property

State of Arizona
Senate
Fifty-seventh Legislature
Second Regular Session
2026

CHAPTER 65

SENATE BILL 1294

AN ACT
AMENDING SECTION 42-15157, ARIZONA REVISED STATUTES; RELATING TO PROPERTY TAX ASSESSMENT.

(TEXT OF BILL BEGINS ON NEXT PAGE)

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

  2. Section 1. Section 42-15157, Arizona Revised Statutes, is amended

  3. to read:

  4. 42-15157. Destruction of property after rolls closed;

  5. proration of valuation and taxes

  6. A. If a property is destroyed after the county assessor closes the

  7. rolls, the property owner may file a notice of claim pursuant to section

  8. 42-16254 or the county assessor may issue a notice of proposed correction

  9. pursuant to section 42-16252 to prorate the valuation of the property from

  10. the date of destruction.

  11. B. If the county assessor finds that the property has been

  12. destroyed:

  13. 1. The county assessor shall prorate the value of the property from

  14. the lien date to the date of destruction.

  15. 2. For the purposes of classifying property under chapter 12,

  16. article 1 of this title, the county assessor may maintain the property

  17. classification in place on the date of destruction for a period of five

  18. years or until an objectively verifiable change in use occurs, whichever

  19. is sooner.

  20. 3. 2. The county assessor shall notify the property owner of the

  21. property assessment pursuant to the applicable notice requirements

  22. provided in this chapter or chapter 16 of this title.

  23. 4. 3. The county treasurer shall compute the amount of taxes

  24. assessed against the property by applying the tax rate for the appropriate

  25. tax year to the original valuation prorated for the portion of the year

  26. the property was intact, plus the tax rate for the appropriate tax year to

  27. the reassessed value of the property prorated for the balance of the year.

  28. C. For the purposes of this section, "destroyed" means physical

  29. destruction caused by a verifiable accident, including fire, flood or any

  30. other act of God.

  31. C. IF THE COUNTY ASSESSOR FINDS THAT A PROPERTY HAS BEEN DESTROYED

  32. BY A VERIFIABLE ACCIDENT, INCLUDING FIRE, FLOOD OR ANY OTHER ACT OF GOD,

  33. THE COUNTY ASSESSOR MAY MAINTAIN THE PROPERTY CLASSIFICATION IN PLACE ON

  34. THE DATE THE PROPERTY IS DESTROYED FOR A PERIOD OF FIVE YEARS OR UNTIL AN

  35. OBJECTIVELY VERIFIABLE CHANGE IN USE OCCURS, WHICHEVER IS EARLIER.

  36. Sec. 2. Retroactivity

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

APPROVED BY THE GOVERNOR JUNE 22, 2026.

FILED IN THE OFFICE OF THE SECRETARY OF STATE JUNE 22, 2026.

HB 2173
James G. Busby, Jr.

James G. Busby, Jr.

James G. Busby, Jr. is a Shareholder at The Cavanagh Law Firm where his practice involves all areas of Arizona state and local tax (SALT) including sales, use, gross receipts, transaction privilege, excise, luxury, tobacco, and severance taxes, as well as income, real, and personal property taxes. For nearly 30 years, James has assisted his clients with state and local tax planning, litigation and controversy, legislation, and policy matters. Before entering private practice, he served as Chief Auditor for sales tax at the Arizona Department of Revenue. In his law practice, and before that while working for two of the world’s largest accounting firms (Arthur Andersen and Deloitte), James has successfully advised and represented numerous clients of all sizes, and from numerous industries, in a wide variety of tax matters. He is a Fellow of the American College of Tax Counsel, was selected by his peers for inclusion in the The Best Lawyers in America® for Tax Law and for Litigation and Controversy–Tax, was named a PHOENIX Magazine Top Lawyer in Tax Law, is a member of the invitation-only Independent SALT Alliance, a national network of state and local tax advisors, received the State Bar of Arizona Tax Law Section's 2024 Henry Tom Outstanding Tax Attorney Award (commonly known as the Tax Section's "Lifetime Achievement Award"), and is Martindale-Hubbell® AV Preeminent® Peer Review Rated.™ James lectures extensively on state and local tax topics. He co-authored Bloomberg's Arizona Corporate Income Tax Navigator, and he co-authored the chapter regarding the Judicial Review of Taxation in the Arizona Appellate Handbook published by the State Bar of Arizona. James also wrote a column relating to Arizona tax issues for State Tax Notes entitled SALT From My Saddle, and a column on state and local tax topics for the AZ CPA Magazine entitled A Dash of SALT.

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