Arizona Dept. of Revenue v. Maricopa County

Citation120 Ariz. 533,587 P.2d 252
Decision Date09 November 1978
Docket NumberNo. 13979,13979
PartiesARIZONA DEPARTMENT OF REVENUE, an agency of the State of Arizona, Petitioner, v. MARICOPA COUNTY, a Body Politic and Corporate, George Campbell, Hawley Atkinson, Ed Pastor, Fred Koory and Tom Freestone, as members of the Board of Supervisors of Maricopa County, Ken Kunes, Maricopa County Assessor, and Glenn O. Stapley, Maricopa County Treasurer, Respondents.
CourtArizona Supreme Court

John A. LaSota, Jr., Atty. Gen., by Mary Z. Chandler, James D. Winter, Asst. Attys. Gen., Phoenix, for petitioner.

Charles F. Hyder, Maricopa County Atty., by Albert Firestein, Philip W. Messinger, Deputy County Attys., Phoenix, for respondents.

STRUCKMEYER, Vice Chief Justice.

This special action was brought by the Arizona Department of Revenue to resolve a dispute with Maricopa County over the proper application of § 22 of Ch. 152 of the Session Laws of 1977. Request for relief denied. The Arizona Department of Revenue is an agency of the State of Arizona, charged by A.R.S. § 42-111.03 with providing a coordinated and uniform system of tax administration for the State. It has general supervision over the counties of the State in the enforcement of the ad valorem property tax laws of the State of Arizona, A.R.S. § 42-123.01. Pursuant to the foregoing statutes, it brings this action.

In Arizona, to obtain the amount of taxes to be paid by a property owner, the tax rate is applied to the assessed valuation of his property. The formula for obtaining the assessed valuation of property is contained in A.R.S. § 42-227. It provides that the assessed valuation of property shall be different for different classes of property; e. g., the highest assessed valuation being class one property at 60% Of its full cash value, and the lowest, class five property (residential), at 15% Of its full cash value. The assessed valuation is the percentage of the cash value of the taxpayer's property set forth in § 42-227.

Because of recent increases in property valuations resulting from inflation, taxing authorities have been able to increase tax revenues without increasing tax rates. By § 22, Ch. 152 of the Session Laws of 1977, the Legislature attempted to reduce this inflationary increase in the assessed valuation of property by providing a decrease in assessed valuations. Section 22(A) provides:

"Notwithstanding any provision of law to the contrary, for the tax year 1978, The finally equalized valuations of property used for the purpose of levying a tax at rates determined pursuant to law Shall be an amount Determined by dividing the assessed valuation determined pursuant to § 42-227 By 1.05." (Emphasis added.)

Section 22(A) requires that the "finally equalized valuations" of properties be determined by dividing assessed valuations by 1.05. Assuming a residence with a full cash value of $30,000.00, its equalized valuation would be obtained in this manner. By reducing the $30,000.00 to 15% (§ 42-227), the assessed valuation would be $4,500.00. Then applying § 22(A): $4,500.00 divided by 1.05 equals $4,285.71. This is the "finally equalized valuation" spoken of in § 22(A) of Ch. 152 and $4,285.71 is the valuation against which the tax rate is applied.

Section 22 has been applied seemingly without problem except for the tax exemption allowed by Art. IX, § 2 of the Arizona Constitution. It provides that the property of widows, veterans and others named therein is exempt from taxation up to the value of $2,000.00 if the total assessed value does not exceed $5,000.00. The Department has interpreted § 22(A) of Ch. 152 to mean that the 1.05 factor when applied to the properties of widows and veterans should be applied after deduction of the $2,000.00 exemption from the assessed valuation. The County's interpretation is that the $2,000.00 exemption should be taken after the application of the 1.05 factor. A simple example illustrates the respective interpretations assuming an assessed valuation of $5,000.00:

Department's Interpretation County's Interpretation

----------------------------- -----------------------

Assessed valuation $5,000 Assessed valuation $5,000

Less exemption 2,000 Divided by 1.06

--------- ------

3,000 4,762

Divided by 1.05 Less exemption 2,000

--------- ------

$2,857 $2,762

In the County's interpretation, the figure $4,762 is the finally equalized valuation. From it, the exemption is deducted.

The phrase "finally equalized valuations" is not defined in the statute and has been used by the Legislature only in § 22(A) and (B) and one other statute. In A.R.S. § 42-304(A), the governing body of each county shall fix, levy and assess the amount to be raised by direct taxation

"and shall fix and determine a rate on each one hundred dollars of taxable property shown by the Finally equalized valuations of property, less exemptions, appearing upon the tax rolls for such fiscal year, which when extended upon such valuations will, in the aggregate, produce the entire amount to be raised by direct taxation for that year." (Emphasis added.)

By § 42-304(A), exemptions are to be deducted from the "finally equalized valuations" of property.

It is a basic principle of statutory construction that tax statutes relating to the same subject should be read together and construed as a whole. Arizona State Tax Commission v. Staggs Realty Corp., 85 Ariz. 294, 337 P.2d 281 (1959). By § 22(A) of Ch. 152, the "finally equalized valuations" of property can be determined only by dividing assessed valuations by 1.05. By §...

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14 cases
  • Rio Rico Properties, Inc. v. Santa Cruz County
    • United States
    • Arizona Tax Court
    • 22 d5 Maio d5 1992
    ...are found in different chapters of the revised statutes. Farley, 106 Ariz. at 122, 471 P.2d at 734. In Arizona Dep't of Revenue v. Maricopa County 120 Ariz. 533, 587 P.2d 252 (1978), our Supreme Court more succinctly stated the same proposition. "It is a basic principle of statutory constru......
  • Marlar v. State, 1
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    • 17 d4 Fevereiro d4 1983
    ...51, 55 (1979). The fundamental purpose of statutory construction is to determine legislative intent, Arizona Department of Revenue v. Maricopa County, 120 Ariz. 533, 587 P.2d 252 (1978), or in this case the intent of the licensing agency which promulgated the regulations pursuant to the Ran......
  • Volunteer Center Southern Ariz. v. Staples
    • United States
    • Arizona Court of Appeals
    • 29 d3 Novembro d3 2006
    ..."[T]ax statutes relating to the same subject should be read together and construed as a whole," Arizona Department of Revenue v. Maricopa County, 120 Ariz. 533, 535, 587 P.2d 252, 254 (1978), a process which includes reading the statute in accordance with any statutory definitions of the te......
  • Collins v. Stockwell, 16471-PR
    • United States
    • Arizona Supreme Court
    • 20 d2 Setembro d2 1983
    ...ascertain the intent of the Legislature. McIntyre v. Mohave County, 127 Ariz. 317, 620 P.2d 696 (1980); Dept. of Revenue v. Maricopa County, 120 Ariz. 533, 587 P.2d 252 (1978). There is no opportunity for construction or interpretation of a statute if the meaning of the statutory language i......
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