Voters Get to Vote on Lowering Property Taxes....for Business
Voters will decide in November whether to reduce property taxes -- but not for themselves.
The Arizona Constitution requires businesses to pay property taxes every year not just on land and buildings but every piece of equipment, from industrial robots to chairs and desks. Voters previously approved exemptions for what, with inflation, is now the first $68,000 of value. Proposition 116 would enact a new formula that would boost that immediately to about $2.4 million. Farrell Quinlan, the state director of the National Federation of Independent Business, said the big jump makes sense for economic development because Arizona taxes equipment and machinery quite heavily.
"And it's the very thing we want companies to do, small businesses to invest in equipment and machinery that's essential for employees to work on," Quinlan said. "And when we make it more difficult to buy that equipment and machinery or to upgrade to make themselves more efficient and competitive, we make it harder for them to hire workers and, in some cases, to keep the workers they have."
Normally a larger exemption for business would mean an immediate shift in the burden to homeowners. But Prop 116 is structured so the higher exemption applies only to equipment purchased next year and beyond, meaning that shift will occur -- but at a much slower rate -- and one that Quinlan said should be offset by faster economic growth. So far there is no organized opposition to the measure.