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Brief sheet on the Arizona Department of Revenue’s reinterpretation of tax law on third-party owned solar installations

published June 2014

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the essentials


  • In 2013 the Arizona Department of Revenue reinterpreted A.R.S §42-11054(C)(2) and A.R.S. §§ 42-14155(B)(C) to require third-party financed solar installations to be assessed a property tax. Homeowners, governments, businesses, and other entities that own their rooftop systems would continue to be exempt from property tax assessments.
  • Taxing leased systems would add roughly $150/year to system costs. The added cost is expected to be passed onto the solar equipment lessees.
  • During the most recent legislative session, some legislators proposed a bill codifying the DOR’s reinterpretation while others worked to exempt all solar panels from property taxation, regardless of how they are financed. However, neither position was codified.
  • Preliminary tax assessments will begin June 2015.