Arizona Business Personal Property Exemption Increased to $500,000

Beginning in tax year 2026, Arizona’s Business Personal Property statutory exemption has increased to $500,000 for qualifying property classes.

What does this mean for ARIZONA BUSINESSES?

This change may impact how certain businesses approach their annual Business Personal Property reporting requirements. The exemption generally applies to:

• Class One Personal Property under A.R.S. §§ 42-12001.3 to 42-12001.13
• Class Two Personal Property under A.R.S. §§ 42-12002.2(a) and 42-12002.2(b)
  

If a business’s Full Cash Value falls below the updated exemption threshold and qualifying conditions are met, filing requirements may differ from prior years.

Because eligibility can depend on multiple factors, including prior year values and asset activity, businesses should carefully review their position for the 2026 tax year.

Baden Tax Management assists multi-location and complex organizations with business personal property compliance and assessment reviews to ensure accurate reporting and alignment with statutory requirements.

If you would like help understanding how this exemption increase may apply to your organization, contact our team for a review.