AZ SB1028

Amends the commercial lease classification definition in section 42-5069 to expand the affiliated entity exemption from corporations only to include reciprocal insurers, companies, businesses, and persons.

Redefines "affiliated" entities to include situations where the lessor owns a controlling interest in the lessee, the lessee owns a controlling interest in the lessor, a third party owns a controlling interest in both, or a reciprocal insurer owns a controlling interest in a company with a controlling interest in the lessee.

Defines "controlling interest" as at least 80 percent of voting shares for corporations or entitlement to at least 80 percent of profits, losses, and distributions for non-corporate entities.

Amends section 42-6004 to conform municipal tax exemptions to the expanded affiliated entity definition, removing previous narrow exemptions for affiliated corporations and replacing them with the broader controlling interest standard.

Applies the revised definitions to commercial lease taxation at both state and municipal levels to provide consistent treatment of affiliated entity leases.