Business Realty of Ariz., Inc. v. Maricopa County
In Business Realty of Ariz., Inc. v. Maricopa County, 181 Ariz. 551, 554 & n.4, 892 P.2d 1340, 1343 & n.4 (1995), the Arizona Supreme Court explained that the "special valuation method for gas and electric utility district property" was an instance where "lawmakers had chosen a valuation method that completely disregarded market value and specified the formula to be followed, instead of allowing the reviewing body to estimate the final value when 'necessary' by use of 'other valuation factors.'" Id. at 557, 892 P.2d at 1346. "Unique tax treatment is afforded owners of such peculiar property as . . . utilities . . ., for which there is, practically speaking, little or no market at all and which therefore require the use of convoluted mathematical formulae just to make a reasonable estimate of their value for taxation purposes." Id. at 560, 892 P.2d at 1349.
Accordingly, the statutory cost-based method applies for valuation of utilities in Arizona, rather than a method based on fair market value.