AR HB2127

State-owned property held under leases for ongoing commercial or residential purposes with actual use or occupation exceeding 90 days shall be subject to ad valorem taxation by the lessee.

Lessees must pay ad valorem tax on state-owned property for any tax year in which the lease is in effect as of January 1 of that year.

State entities must notify the county assessor within 30 days of executing a qualifying lease, including the lessee's name and address, lease term, and property description.

Exemptions apply to state-leased property used for student or employee housing, state services, academic or research facilities, business incubators, manufacturing facilities, or leased to state or tax-exempt nonprofit entities.

Existing state leases meeting these criteria must be reported to county assessors within 90 days of the act's effective date; the law applies to assessment years beginning January 1, 2017 or later.