By Jerod MacDonald-Evoy | Arizona Mirror
A Republican bill would rein in a controversial tax break used by municipalities to entice large development projects that cities say they need.
Rep. Travis Grantham, R-Gilbert, wants to reduce the amount of time a property can receive a Government Property Lease Excise Tax, or GPLET for short, from eight years down to four years.
GPLETs are a development tool used by cities to allow entities to skirt property taxes by making the city the owner of the property and the entity the “tenant” as government property does not pay property taxes. These deals have come under scrutiny by lawmakers and former Attorney General Mark Brnovich who have said the tool shields properties from property taxes improperly.
The conservative Goldwater Institute has sued the City of Phoenix over its use of the tool, claiming it violates the state constitution’s gift clause, which restricts how governments can give incentives to private companies. In 2020, a judge agreed with the Goldwater Institute, saying that a 2016 GPLET deal for an apartment complex violated the gift clause as the benefit was not equal to the tax rebate given by Phoenix.
“GPLETs are important for economic development and taking away this tool would be negatively impactful on Arizona.” – Jordan Rose, Rose Law Group Founder and President
