AZ HB2406

Provides full property tax exemption for combat veterans with service-connected disabilities rated at 100 percent by the U.S. Department of Veterans Affairs.

Establishes separate exemption structure where widows, widowers, persons with total and permanent disabilities, and veterans with disabilities not qualifying for full exemption receive $4,188 exemption (adjusted annually for inflation) if total assessment does not exceed $28,459.

Requires veterans with service or nonservice connected disabilities claiming partial exemption to have exemption amount further limited by multiplying by the percentage of their disability rating as determined by the U.S. Department of Veterans Affairs.

Prohibits county, city, town, or school district primary property tax levies from including amounts to offset aggregate exemptions provided under the full combat veteran exemption provision.

Applies to tax years beginning January 1, 2026 and later.