Glossary · Thresholds & Valuation
Property tax class
In short
The legal class the assessor assigns a parcel. For contracting it does one thing: it decides whether the residential percentage threshold or the flat commercial figure applies.
In full
Arizona sorts every parcel into a legal class, numbered one through nine, at A.R.S. §§ 42-12001 through 42-12009. The class drives the assessment ratio used to compute property tax, and it is assigned by the county assessor from the property's use.
For contracting it does one thing. A.R.S. § 42-5075(S)(1)(a) applies the residential alteration threshold — 25% of full cash value — by naming classes rather than by describing use. Everything the paragraph does not name takes the flat $750,000 threshold instead.
The named categories are narrower than they first appear. The paragraph reaches class two property under § 42-12002, paragraph 1, subdivision (c) or paragraph 2, subdivision (c), used for residential purposes; class three under § 42-12003; and class four under § 42-12004. Those two class two subdivisions are the nonprofit-owned ones — real property at paragraph 1, personal property at paragraph 2, each owned and controlled by an organization exempt under section 501(c)(3), (4), (7), (10) or (14) of the internal revenue code. Class two property in any other subdivision, including the residual "all other real property" at paragraph 1, subdivision (f), is not reached.
The classification is the assessor's determination and is appealable. A petition for review of an improper valuation or classification is filed with the assessor within sixty days after the notice of valuation is mailed.
A.R.S. §§ 42-5075(S)(1)(a), 42-12002, 42-12003, 42-12004, 42-16051(D); ADOR Evaluating Mixed Construction Contracts worksheet, step 2