Property Tax Alert: Arizona

February 2006

For purposes of Arizona property tax valuation of an electric utility company's property, contributions in aid of construction ("CIAC") are not included in the company's original plant in service cost. The Department of Revenue asserted that the statutory cost-based valuation method for electric utility property did not allow for an express exclusion for CIAC. In rejecting the Department's position, the court determined that the valuation statute incorporates the Federal Energy Regulation Commission uniform system of accounts, which allows a CIAC exclusion from a company's original plant in service cost.

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