483 P.3d 202
Ariz. Ct. App.2021Background:
- Maricopa County Assessor classified several single-family parcels as class four residential for 2016 and used Rule A to compute Limited Property Value (LPV) for 2017.
- Taxpayers argued the parcels were owner-occupied primary residences and should be class three; the State Board of Equalization reclassified them to class three but left LPVs unchanged.
- Taxpayers sued, asserting that reclassification from class four to class three is a "change in use" under A.R.S. § 42-13302(A)(2) and thus required the Assessor to recalculate LPV under Rule B (which uses comparable sales and may change LPV more than the Rule A 5% cap).
- The tax court granted partial summary judgment for Taxpayers, concluding the reclassification constituted a change in use and Rule B applied; County appealed.
- The Court of Appeals affirmed: because the legislature defined class three (owner’s primary residence) and class four (other residential uses) as mutually exclusive uses, reclassification between them is a "change in use" triggering Rule B.
Issues:
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether reclassification from class four to class three is a "change in use" under § 42-13302(A)(2) that requires LPV be calculated under Rule B | Reclassification between two legislatively defined, mutually exclusive residential "uses" (owner-occupied primary residence vs. other residential) is by definition a change in use and triggers Rule B | "Use" must mean the Assessor's objectively verifiable, physical use (activities on the land) as determined for valuation; mere change in occupancy/classification without physical change does not trigger Rule B | Affirmed: when statutes define class three and four as mutually exclusive "uses," moving between them is a change in use that triggers Rule B |
Key Cases Cited
- SolarCity Corp. v. Arizona Dep’t of Revenue, 243 Ariz. 477 (2018) (statutory interpretation and de novo review of tax statutes)
- General Motors Corp. v. Maricopa County, 237 Ariz. 337 (2015) (construed "change of use" in rollover statute to mean a physical, objectively verifiable use on the property)
- Premiere RV & Mini Storage, LLC v. Maricopa County, 222 Ariz. 440 (App. 2009) (explains Rule B permits LPV to be set by comparable properties and may be advantageous in appreciating markets)
- Scottsdale/101 Assocs., LLC v. Maricopa County, 238 Ariz. 291 (2015) (describes valuation and classification as distinct but related factors producing assessed valuation)
- Glazer v. State, 244 Ariz. 612 (2018) (defines when statutory ambiguity exists and how to resolve it)