Arizona Court of Appeals Division One Affirms That Public’s De Minimis Actual Use of Property Does Not Preclude “Common Area” Property Tax Valuation.

The Tax Assessor qualified the Taxpayer’s clubhouse and surrounding property as “commercial property,” with an annual property tax of $130,611.42, rather than as a “common area,” which would have been subject to a lower tax rate of less than ten dollars. The Tax Assessor contended that the general public’s use of property disqualifies it as a “common area,” and instead makes it a commercial property. The Taxpayer filed a complaint and a motion for summary judgment in Arizona Tax Court regarding whether the property qualified for common area valuation. The trial court granted summary judgment to the Taxpayer. The Arizona Court of Appeals affirmed, relying on the plain language of A.R.S. § 42-13404 and the statute’s legislative history, and concluding that the public’s relatively de minimis actual use does not preclude a common area valuation.

Judge Winthrop authored the opinion; Judges Thompson and Irvine concurred.