42-14156. Computing valuation of electric generation facilities; definitions
A. The valuation of electric generation facilities referred to in section 42-14151, subsection A, paragraph 4 shall be determined as follows:
1. The value of land used in operating the facility shall be the cost to the current owner as of December 31 of the preceding calendar year.
2. The valuation of real property improvements used in operating the facility is the cost multiplied by valuation factors prescribed by tables adopted by the department.
3. The valuation of personal property used in operating the facility is the cost multiplied by the valuation factors as prescribed by tables adopted by the department, adjusted as follows:
(a) For the first year of assessment, the department shall use thirty-five per cent of the scheduled depreciated value.
(b) For the second year of assessment, the department shall use fifty-one per cent of the scheduled depreciated value.
(c) For the third year of assessment, the department shall use sixty-seven per cent of the scheduled depreciated value.
(d) For the fourth year of assessment, the department shall use eighty-three per cent of the scheduled depreciated value.
(e) For the fifth and subsequent years of assessment, the department shall use the scheduled depreciated value as prescribed in the department’s guidelines.
4. In addition to the computation prescribed in paragraphs 2 and 3 of this subsection, the taxpayer may submit documentation showing the need for, and the department shall consider, an additional adjustment to recognize obsolescence using standard appraisal methods and techniques.
5. The valuation prescribed in paragraph 2 of this subsection shall not reduce the valuation below ten per cent of the cost of the real property improvements. The valuation prescribed in paragraph 3 of this subsection shall not reduce the valuation below ten per cent of the cost of the personal property.
6. The following apply in determining cost for the purposes of this subsection:
(a) "Cost" means the cost of constructing the property or acquiring the property in an arm's length transaction.
(b) The cost of personal property is the invoice cost of the personal property, the cost of transporting the property to the facility site and the cost of labor to install the property, plus any transaction privilege or use taxes paid.
(c) The cost of leased property is the lessor's cost of the property, except that in the case of a lease financing transaction, the cost is the actual cost of construction based on the invoice cost similar to any other type of financing.
(d) In the case of a facility that is acquired from another taxpayer:
(i) If, after the acquisition, the buyer has possession of the cost information, the valuation of the facility shall continue based on the seller's cost as if there were no change in ownership, except for land as provided in subsection A, paragraph 1.
(ii) If, after the acquisition, the buyer does not possess the cost information, the acquisition cost in an arm's length transaction shall be used.
(e) For generation facilities that were in service before January 1, 2001, costs incurred before January 1, 2002 shall be computed in accordance with section 42-14158. For these facilities, all costs incurred on or after January 1, 2002 shall be reported in accordance with subdivisions (a) through (d) of this paragraph.
7. The department shall not value personal property construction work in progress until the property is first placed in commercial service. For the purposes of this paragraph, "commercial service" means:
(a) For machinery and equipment used in the generation of electricity being valued and placed on the tax roll for the first time, the official assumption of operation and ownership of the machinery and equipment from the contractor by the plant operator.
(b) For machinery and equipment added to existing electric generation facilities, that the construction work has progressed to a sufficient degree for the machinery and equipment to be useful for the purpose for which it is being constructed.
(c) For machinery and equipment related to self-constructed facilities, that the construction work has progressed to a sufficient degree for the machinery and equipment to be useful for the purpose for which it is being constructed.
B. For the purposes of this section:
1. "Electric generation facility" means all land, buildings and personal property that is situated in this state and that is used or useful for the generation of electric power.
2. "Personal property" means all tangible property except for land and real property improvements as defined in this section. Personal property includes foundations or supports for the machinery or apparatus for which they are provided, including water cooling towers.
3. "Real property improvements" means buildings, including administration buildings, maintenance warehouses and guard shacks, water retention ponds, sewage treatment ponds, reservoirs, sidewalks, drives, curbs, parking lots, tunnels, duct banks, canals, fencing and landscaping.
Notes of Decisions
Sundevil Power Holdings, LLC v. Arizona Dep't of Revenue, 379 P.3d 236 (Ariz. Ct. App. 2016).
· cites it 23× “The Department and the County argue that the court erred in granting summary judgment because it incorrectly applied A.R.S. § 42-14156 (“valuation statute”) and erred in allowing Taxpayer’s 2013 amended complaint to relate back to the date of the original complaint.”
Griffith Energy, L.L.C. v. Arizona Dep't of Revenue, 108 P.3d 282 (Ariz. Ct. App. 2005).
· cites it 23× “§ 42-14156(3)---- [Taxpayer] is not challenging the valuation method contained in A.R.S. § 42-14156 or [ADOR’s] calculation of the value using the cost numbers reported by [Taxpayer].”
Calpine Constr. Fin. Co. v. Arizona Depatment of Revenue, 211 P.3d 1228 (Ariz. Ct. App. 2009).
· cites it 6× “A.R.S. § 42-14156(A)(l-3) (Supp. 2008). The Department valued only Cal- *248 pine’s personal property, but in accordance with the parties’ stipulation, the state court ruling addressed both improvements and personal property.”
Arizona Dep't of Revenue v. South Point Energy Ctr., LLC, 268 P.3d 387 (Ariz. Ct. App. 2011).
· cites it 2× “Because South Point refused to file a property tax report for tax years 2003 and 2004, the Department had no original cost information other than what it could glean from public sources. As a result, the Department estimated the facility’s original cost as required by AR.”
Arizona Dep't of Revenue v. Questar S. Trails Pipeline Co., 161 P.3d 620 (Ariz. Ct. App. 2007).
· cites it 2× “For example, A.R.S. § 42-14156(A)(4) (2006) provides that an owner of electric generation facilities “may submit documentation showing the need for, and the department shall consider, an additional adjustment to recognize obsolescence using standard appraisal methods and…”
Solarcity Corp. v. Ariz. Dep't of Revenue, 413 P.3d 678 (Ariz. 2018).
“§ 42-14156(B)(1) (defining "electric generation facility" for use in applying valuation methodologies as "all land, buildings and personal property .”
SolarCity Corp. v. Arizona Dep't of Revenue, 396 P.3d 631 (Ariz. Ct. App. 2017).
· cites it 2× “or renewable sources and converting the energy into electricity to be delivered to customers through a transmission and distribution system.”
Solar v. Ador, 435 P.3d 1052 (Ariz. Ct. App. 2019).
· cites it 2× “§ 42-14155 and A.R.S. § 42-14156 (collectively the “valuation method”).”
Mesquite v. Ador (Ariz. 2024).
· cites it 17× “¶2 For tax year 2019, the Arizona Department of Revenue (“ADOR”) calculated the full cash value of the Mesquite Power Plant under A.R.S. § 42-14156. Mesquite challenged that statutory valuation in tax court under A.”
Mesquite v. Ador (Ariz. Ct. App. 2022).
· cites it 8× “To hold otherwise also would run contrary to A.R.S. § 42-14156. ¶35 We conclude that the Purchase Agreement enhances the value of Mesquite’s taxable property because it contributes to the plant’s cash flows and current usage.”
siete/mesquite v. ador/mar (Ariz. Ct. App. 2015).
· cites it 6× “Instead, the prior statute’s complete lack of any specific definition of cost, coupled with a definition of cost provided in A.R.S. § 42-14156 that conforms to the plain meaning of the term, supports our interpretation.”
— Ariz. Rev. Stat. § 42-14156(3) — 1 case
Griffith Energy, L.L.C. v. Arizona Dep't of Revenue, 108 P.3d 282 (Ariz. Ct. App. 2005).
“§ 42-14156(3)---- [Taxpayer] is not challenging the valuation method contained in A.R.S. § 42-14156 or [ADOR’s] calculation of the value using the cost numbers reported by [Taxpayer].”
— Ariz. Rev. Stat. § 42-14156(A) — 4 cases
Calpine Constr. Fin. Co. v. Arizona Depatment of Revenue, 211 P.3d 1228 (Ariz. Ct. App. 2009).
“A.R.S. § 42-14156(A)(l-3) (Supp. 2008). The Department valued only Cal- *248 pine’s personal property, but in accordance with the parties’ stipulation, the state court ruling addressed both improvements and personal property.”
Griffith Energy, L.L.C. v. Arizona Dep't of Revenue, 108 P.3d 282 (Ariz. Ct. App. 2005).
“§ 42-14156(3)---- [Taxpayer] is not challenging the valuation method contained in A.R.S. § 42-14156 or [ADOR’s] calculation of the value using the cost numbers reported by [Taxpayer].”
Mesquite v. Ador (Ariz. 2024).
“¶2 For tax year 2019, the Arizona Department of Revenue (“ADOR”) calculated the full cash value of the Mesquite Power Plant under A.R.S. § 42-14156. Mesquite challenged that statutory valuation in tax court under A.”
— Ariz. Rev. Stat. § 42-14156(A)(1) — 2 cases
Mesquite v. Ador (Ariz. Ct. App. 2022).
“To hold otherwise also would run contrary to A.R.S. § 42-14156. ¶35 We conclude that the Purchase Agreement enhances the value of Mesquite’s taxable property because it contributes to the plant’s cash flows and current usage.”
siete/mesquite v. ador/mar (Ariz. Ct. App. 2015).
“Instead, the prior statute’s complete lack of any specific definition of cost, coupled with a definition of cost provided in A.R.S. § 42-14156 that conforms to the plain meaning of the term, supports our interpretation.”
— Ariz. Rev. Stat. § 42-14156(A)(3) — 3 cases
Griffith Energy, L.L.C. v. Arizona Dep't of Revenue, 108 P.3d 282 (Ariz. Ct. App. 2005).
“§ 42-14156(3)---- [Taxpayer] is not challenging the valuation method contained in A.R.S. § 42-14156 or [ADOR’s] calculation of the value using the cost numbers reported by [Taxpayer].”
Mesquite v. Ador (Ariz. Ct. App. 2022).
“To hold otherwise also would run contrary to A.R.S. § 42-14156. ¶35 We conclude that the Purchase Agreement enhances the value of Mesquite’s taxable property because it contributes to the plant’s cash flows and current usage.”
— Ariz. Rev. Stat. § 42-14156(A)(3)(a) — 1 case
— Ariz. Rev. Stat. § 42-14156(A)(3)(e) — 1 case
— Ariz. Rev. Stat. § 42-14156(A)(4) — 3 cases
Griffith Energy, L.L.C. v. Arizona Dep't of Revenue, 108 P.3d 282 (Ariz. Ct. App. 2005).
“§ 42-14156(3)---- [Taxpayer] is not challenging the valuation method contained in A.R.S. § 42-14156 or [ADOR’s] calculation of the value using the cost numbers reported by [Taxpayer].”
Arizona Dep't of Revenue v. Questar S. Trails Pipeline Co., 161 P.3d 620 (Ariz. Ct. App. 2007).
“For example, A.R.S. § 42-14156(A)(4) (2006) provides that an owner of electric generation facilities “may submit documentation showing the need for, and the department shall consider, an additional adjustment to recognize obsolescence using standard appraisal methods and…”
— Ariz. Rev. Stat. § 42-14156(A)(5) — 1 case
— Ariz. Rev. Stat. § 42-14156(A)(6)(a) — 2 cases
Sundevil Power Holdings, LLC v. Arizona Dep't of Revenue, 379 P.3d 236 (Ariz. Ct. App. 2016).
“The Department and the County argue that the court erred in granting summary judgment because it incorrectly applied A.R.S. § 42-14156 (“valuation statute”) and erred in allowing Taxpayer’s 2013 amended complaint to relate back to the date of the original complaint.”
Mesquite v. Ador (Ariz. 2024).
“¶2 For tax year 2019, the Arizona Department of Revenue (“ADOR”) calculated the full cash value of the Mesquite Power Plant under A.R.S. § 42-14156. Mesquite challenged that statutory valuation in tax court under A.”
— Ariz. Rev. Stat. § 42-14156(A)(6)(d)(i) — 1 case
Sundevil Power Holdings, LLC v. Arizona Dep't of Revenue, 379 P.3d 236 (Ariz. Ct. App. 2016).
“The Department and the County argue that the court erred in granting summary judgment because it incorrectly applied A.R.S. § 42-14156 (“valuation statute”) and erred in allowing Taxpayer’s 2013 amended complaint to relate back to the date of the original complaint.”
— Ariz. Rev. Stat. § 42-14156(A)(6)(d)(ii) — 1 case
Sundevil Power Holdings, LLC v. Arizona Dep't of Revenue, 379 P.3d 236 (Ariz. Ct. App. 2016).
“The Department and the County argue that the court erred in granting summary judgment because it incorrectly applied A.R.S. § 42-14156 (“valuation statute”) and erred in allowing Taxpayer’s 2013 amended complaint to relate back to the date of the original complaint.”
— Ariz. Rev. Stat. § 42-14156(A)(l) — 1 case
Sundevil Power Holdings, LLC v. Arizona Dep't of Revenue, 379 P.3d 236 (Ariz. Ct. App. 2016).
“The Department and the County argue that the court erred in granting summary judgment because it incorrectly applied A.R.S. § 42-14156 (“valuation statute”) and erred in allowing Taxpayer’s 2013 amended complaint to relate back to the date of the original complaint.”
— Ariz. Rev. Stat. § 42-14156(B)(1) — 3 cases
Solarcity Corp. v. Ariz. Dep't of Revenue, 413 P.3d 678 (Ariz. 2018).
“§ 42-14156(B)(1) (defining "electric generation facility" for use in applying valuation methodologies as "all land, buildings and personal property .”
SolarCity Corp. v. Arizona Dep't of Revenue, 396 P.3d 631 (Ariz. Ct. App. 2017).
“or renewable sources and converting the energy into electricity to be delivered to customers through a transmission and distribution system.”
Mesquite v. Ador (Ariz. 2024).
“¶2 For tax year 2019, the Arizona Department of Revenue (“ADOR”) calculated the full cash value of the Mesquite Power Plant under A.R.S. § 42-14156. Mesquite challenged that statutory valuation in tax court under A.”
— Ariz. Rev. Stat. § 42-14156(B)(2) — 2 cases
Calpine Constr. Fin. Co. v. Arizona Depatment of Revenue, 211 P.3d 1228 (Ariz. Ct. App. 2009).
“A.R.S. § 42-14156(A)(l-3) (Supp. 2008). The Department valued only Cal- *248 pine’s personal property, but in accordance with the parties’ stipulation, the state court ruling addressed both improvements and personal property.”
Mesquite v. Ador (Ariz. Ct. App. 2022).
“To hold otherwise also would run contrary to A.R.S. § 42-14156. ¶35 We conclude that the Purchase Agreement enhances the value of Mesquite’s taxable property because it contributes to the plant’s cash flows and current usage.”
— Ariz. Rev. Stat. § 42-14156(B)(3) — 1 case
Calpine Constr. Fin. Co. v. Arizona Depatment of Revenue, 211 P.3d 1228 (Ariz. Ct. App. 2009).
“A.R.S. § 42-14156(A)(l-3) (Supp. 2008). The Department valued only Cal- *248 pine’s personal property, but in accordance with the parties’ stipulation, the state court ruling addressed both improvements and personal property.”
— Ariz. Rev. Stat. § 42-14156(B)(l) — 1 case
Sundevil Power Holdings, LLC v. Arizona Dep't of Revenue, 379 P.3d 236 (Ariz. Ct. App. 2016).
“The Department and the County argue that the court erred in granting summary judgment because it incorrectly applied A.R.S. § 42-14156 (“valuation statute”) and erred in allowing Taxpayer’s 2013 amended complaint to relate back to the date of the original complaint.”
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