What is a GPLET?
The Government Property Lease Excise Tax (GPLET) is a tax incentive agreement negotiated between a private party and a local government. It was established by the State of Arizona in 1996 as a way to stimulate development in commercial districts by temporarily replacing a building’s property tax with an excise tax.
Under the GPLET program, a government entity owns a building and leases it out for private use. The tenant, or prime lessee, pays an excise tax based on size and use instead of property tax based on value. If the building is located in a single central business district, the government entity may abate the GPLET beginning when a Certificate of Occupancy is issued and lasting for eight years. A GPLET lease agreement cannot last longer than twenty-five (25) years.
The government entity (in the case of a GPLET, also the “Lessor”) is responsible for recording the lease with the County Recorder and reporting the existence of the GPLET to the County Treasurer and the Arizona Department of Revenue within thirty days after entering into the lease (A.R.S. 42-6202). The government entity is also responsible for calculating and levying the amount of the GPLET (also under A.R.S. 42-6202). The County Treasurer collects the payment and disperses the revenue as proportionately described in A.R.S. 42-6205, with the majority going to school districts in the taxing jurisdictions in which the government property is located. The County Assessor is responsible for reporting all GPLETs to the Department of Education, and for confirming the County Treasurer and Arizona Department of Revenue are aware of any new leases and/or any expiration of existing leases.
For more information, see title 42, chapter 6 of the Arizona Revised Statutes.
For current GPLET rates, and to see a list of reported GPLETs by county, see: https://www.azdor.gov/PropertyTax/GPLET.aspx?CountyID=4&CityID=0
To download GPLET forms, visit: https://www.azdor.gov/Forms/GovernmentPropertyLeaseExciseTax.aspx