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HB 2672

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2025 Regular Session Introduced by Eric Phillips

Arizona HB 2672 expands property tax exemptions for veterans, widows/widowers, and persons with total and permanent disabilities, including a full exemption for 100% service-connec

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Bill Summary · HB 2672

Summary — HB 2672 (Introduced 2025)

Note on source material: The provided document appears to combine text from two different bills (Arizona House Bill 2672 amending Arizona Revised Statutes §42‑11111 on property tax exemptions for veterans and persons with disabilities, and a separate technical Illinois School Code change). This summary focuses on the substantive Arizona statute amendments contained in the bill text and notes procedural information included in the packet.

Purpose

The bill revises Arizona property‑tax exemption law (A.R.S. §42‑11111) to change exemption amounts and eligibility rules for:
- veterans with service‑connected and nonservice‑connected disabilities,
- widows and widowers, and
- persons with total and permanent disabilities.

Its intent is to expand or clarify exemption levels (including a full exemption for some veterans), set fixed dollar exemptions for other categories, and index exemption and income limits for inflation.

Key provisions and changes

  • Full exemption for 100% service‑connected veterans:

    • Property of a veteran rated 100% service‑connected by the U.S. Department of Veterans Affairs (VA) is fully exempt from property tax.
    • A surviving spouse may continue to claim that full exemption while occupying the property as their primary residence and if the surviving spouse does not remarry.

  • Partial/flat exemption for other veterans:

    • Property of veterans with nonservice‑connected disabilities or with service‑connected ratings less than 100% is exempt in the amount of $4,188.
    • That $4,188 exemption is prorated by the veteran’s VA disability percentage (i.e., multiplied by the VA rating percentage).

  • Exemptions for widows/widowers and persons with total and permanent disability:

    • A $4,188 exemption applies if the person’s total assessment does not exceed $28,459.
    • No exemption is allowed if the total assessment exceeds $28,459.
    • For veterans in this category, the $4,188 amount is prorated by VA disability percentage.

  • Annual inflation adjustment:

    • On or before December 31 each year, the Department must increase the exemption amounts, assessment caps, and income‑limit amounts based on the average annual percentage increase in the GDP price deflator for the two most recent complete state fiscal years.

  • Income eligibility limits (applicant + spouse + resident children):

    • $34,901 if no children under 18 lived with the claimant in the prior year.
    • $41,870 if one or more resident children were under 18 or had a total and permanent disability.

  • Definition of “income from all sources”:

    • Includes adjusted gross income, excluded capital gains, certain nontaxable benefits, retirement payments, and gross pensions/annuities, with an enumerated list of excluded items (e.g., cash public assistance, railroad retirement, Social Security, unemployment benefits, veterans disability pensions, workers’ compensation).

  • Administration and eligibility verification:

    • Claimants must file an affidavit with the county assessor when initially claiming the exemption.
    • Claimants (or representatives) must annually calculate prior‑year income and notify the assessor of disqualifying events.
    • Disqualifying events include death (except surviving spouse exception for 100% service‑connected veterans), remarriage of a widow/widower, income above limits, and conveyance of title.
    • Unused exemption dollar amounts can be applied to certain special personal property taxes.
    • An individual may not claim more than one of the widow/widower, total and permanent disability, or veteran‑disability exemption categories.

Who is affected

  • Primary beneficiaries: veterans (especially those with 100% VA service‑connected disability), surviving spouses of such veterans, widows/widowers, and persons with total and permanent disabilities who meet assessment and income limits.
  • Secondary effects: county assessors (administrative duties for verification and tracking), local taxing jurisdictions (cities, counties, school districts), which could experience reduced property‑tax revenues to the extent exemptions increase.

Fiscal/administrative impact (conceptual)

  • Potential revenue loss for local governments and school districts proportional to the number and size of properties newly exempted or receiving larger exemptions.
  • Administrative workload for county assessors for initial affidavits, annual income checks, and enforcement of disqualifying events.
  • The annual indexing provision will gradually increase exemption values and thresholds over time.

Procedural status and sponsors (as provided)

  • Introduced: February 11, 2025 (document contains mixed dates).
  • Status noted in the packet: Referred to Rules Committee.
  • Sponsors listed include Michael Carbone (primary in Arizona text) and a mix of other state legislators; the packet also lists Illinois Rep. Suzanne M. Ness (separate bill text).

If you want, I can:
- Extract only the Arizona bill text and produce a one‑page fact sheet for county assessors;
- Compare the bill’s changes to current A.R.S. §42‑11111 (showing pre‑ and post‑language);
- Estimate a rough fiscal impact if you can provide counts of likely eligible veterans and disabled residents by county.

Compiled from official sources — confirm details with the bill’s official record.

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