Arizona Senate Bill SB1298

Arizona 2025 Regular Session

• Introduced: 1/30/25
• Report Pass: 2/17/25
• Report Pass: 2/24/25

Caption

Property tax exemption; religious activities

Summary

SB1298 amends Arizona’s property tax exemption statute for nonprofit-owned property used for religious worship and related activities. The bill broadens the statutory language from “religious worship” to “religious-related activities,” and defines that term to include worship, education, and housing used for religious or charitable purposes. It keeps the existing exemption for qualifying nonprofit property that is not used for profit, and it continues to require filing an affidavit and proof of 501(c)(3) status when the exemption is first claimed. The bill also adds administrative protections for nonprofits that qualify for the exemption but miss the affidavit deadline. If a qualifying organization files late, the county board of supervisors must direct the county treasurer, upon petition, to refund taxes paid within the prior year or to forgive unpaid taxes, interest, and penalties. It also requires county assessors, upon request, to issue a receipt within ten days after receiving the initial affidavit. The measure therefore affects county assessors, county treasurers, county boards of supervisors, and nonprofit religious organizations that own tax-exempt property.

Impact

SB1298 would expand and clarify Arizona Revised Statutes section 42-11109 by replacing narrower references to property used for “religious worship” with the broader category of “religious-related activities.” In practical terms, this could extend the property tax exemption to additional nonprofit uses tied to religious education and certain housing arrangements, so long as the property is not held for profit and the organization meets the existing affidavit and 501(c)(3) documentation requirements. The bill also creates a mandatory refund and abatement process for late-filed but otherwise eligible exemptions, shifting some administrative and fiscal responsibility to county tax officials and potentially reducing property tax collections for affected jurisdictions.

Sentiment

The available vote history suggests the bill received generally favorable but not unanimous support in committee. It passed the Senate Finance Committee 5-1 with a do-pass-amended recommendation, indicating some support for the policy but at least one member opposed or concerned about the measure. The Senate Rules Committee action was procedural and showed no recorded yeas or nays. No committee transcript was provided, so the broader discussion appears to have centered on the bill’s tax exemption scope and administration rather than on a fully documented public debate.

Contention

The main points of contention likely involve the breadth of the exemption and the fiscal effect on local governments. Supporters would view the bill as clarifying and modernizing the exemption for nonprofit religious property, especially for education and housing connected to religious or charitable use. Critics may be concerned that expanding “religious-related activities” could widen the exemption beyond traditional worship space and reduce the property tax base, while the late-filing refund and abatement provisions could create additional revenue losses and administrative burdens for counties. The single dissenting vote in Senate Finance suggests at least some concern about those tax and implementation impacts.