County Approves Tax Exemptions for Tribal Trust Lands
The Pinal County Board of Supervisors has approved exemptions for nearly $130,000 in previously assessed property taxes on lands that were later placed into federal trust for the Ak-Chin Indian Community. The decision came during the April 30th board meeting where Chairman Stephen Miller expressed concerns about the long-term financial impact on county revenues.
“These are properties that will be taken off the tax rolls, and we will not be collecting taxes on these items,” Miller stated during the meeting. “There were 28 parcels with taxes of $129,000 over two years. Interest would not be accumulating on an annual basis but was $78,000, for a total of around $207,000 that’s going to be reimbursed.”
What Is Being Lost
The exemptions apply to 28 parcels of land that have been converted from fee-simple ownership to trust status for the Ak-Chin Indian Community. When land is placed into trust status, the title is held by the United States government on behalf of an individual American Indian or a tribe.
Trust land is not subject to state or local taxes, meaning Pinal County loses that tax revenue. Chairman Miller noted that these 28 parcels “produce around $60,000 a year- in taxes, plus or minus.” This represents an ongoing annual loss to the county, not just a one-time exemption.
Protection Against Annexation and Economic Development
Tribes may use the fee-to-trust process as a protection strategy against potential annexation by neighboring municipalities. Documents show that in 2011, the city of Maricopa attempted to annex land owned by the Ak-Chin Indian Community. At that time, the tribe had started a land-into-trust process for certain acres and opposed the annexation attempt.
At the time, changes in state law raised concerns that municipalities could more easily annex tribally owned fee-simple land. This concern did not apply to federally protected trust land, which is immune from annexation. Converting land to trust status places it under federal protection and removes it from the jurisdiction of local governments.
Many of the parcels are located near the Santa Cruz Commerce Center and Ak-Chin Regional Airport property—an area the Ak-Chin Indian Community previously included in a 2018 fee-to-trust application for its designated Economic Development Zone. The Ak-Chin Indian Community has pursued trust land acquisitions in part to protect tribal sovereignty and support long-term economic development under tribal jurisdiction, consistent with statements made in prior development documents.
The Conversion Process
The conversion process, formally known as “fee to trust land acquisition,” occurs under the authority of the Indian Reorganization Act of 1934. This federal legislation was designed to restore to Native Americans the management of their assets—including land and mineral rights—and to create a sound economic foundation for residents of Indian reservations.
Benefits for Tribes and Impact on Counties
The process serves several important purposes for tribes. Trust lands establish Tribal jurisdiction and strengthen Tribal sovereignty. Many programs and services offered by the Bureau of Indian Affairs are available on trust land.
For the county’s finances, however, trust land is not subject to state or local taxes. However, Tribes may assess taxes on trust land for services they provide. This conversion to trust status removes these lands from the county tax rolls.
County Has No Choice in the Matter
Chairman Miller acknowledged that the board lacked authority to deny the exemptions.
“We have no choice, we have to do this action,” Miller told the board.
The agenda items referenced A.R.S. 42-18351.1 and A.R.S. 42-18352.D as the legal basis for the exemptions. These statutes allow for tax abatement and removal of tax liens under specific circumstances, including when an “error or omission” results in “improper imposition of a property tax” or when events invalidate the tax lien.
Impact on County Finances
Miller emphasized the inequity of the situation and its long-term implications for county finances.
“I think there’s some inequity here,” he said. “If we’re going to be removing properties from our tax rolls and property tax is what we live on, there should be compensation either from the federal government or the state government or somebody. Or given land that has similar value.”
A key factor in Miller’s concern is that Pinal County, despite being the size of Connecticut, has only 19% of its land privately owned. This limited tax base creates challenges for managing county services and operations. “That is difficult to manage this county on those numbers,” Miller stated. “If we lose a postage stamp of property, I think it gives us challenges from time to time.”
The Road Ahead
According to the agenda items discussed at the meeting, the county assessor has already corrected the tax status of these properties for 2022 forward, and the board’s approval only applied to the 2020-2021 tax years.
This situation underscores the enduring tension between tribal sovereignty, federal policy, and the fiscal limits of local government in land-constrained counties like Pinal.
