Arizona Court of Appeals Division One Holds That A Property “Split” Occurs For Tax Purposes When the Assessor Completes the Process of Identifying and Valuing the Resulting Parcels, Not When a Portion of the Property Is Sold.

When real property is split, Arizona statutes prescribe two different valuation methods for tax purposes, depending on whether the property is split before or after September 30 of the valuation year.  A.R.S. § 42-13302(A), (B).  The statutes, however, do not define when a “split” occurs for such purposes.  The method used may have an effect on the resulting valuation. 

Taxpayer filed a complaint in Tax Court, alleging that the Maricopa County Assessor had applied the wrong valuation method by failing to recognize that a “split” occurred when a portion of the property was sold.  On cross-motions for summary judgment, the Tax Court agreed with the Taxpayer.  The County appealed.

The Court of Appeals reversed and remanded.  It held that a “split” occurs, for purposes of A.R.S. § 42-13302, when the assessor commits the administrative act of identifying and valuing the separate parcels resulting from a sale.  The “split” does not occur at the time of the sale.

Judge Swann authored the opinion; Judges Irvine and Johnsen concurred.