While wins in agriculture feel rare these days, Cochise County farmers netted a big one for all of us in Arizona.

In Cochise County, tree-nut growers and other permanent-crop producers faced a 2023 property-tax assessment that effectively layered two valuation methods onto the same acreage. The county assessor first applied the statutory income approach to the land itself—setting values at $1,800 per acre—then separately assigned market-based values of $12,000 per acre to orchard trees and $8,000 per acre to vineyard vines, adding the figures together. The result was higher full-cash values and larger tax bills for operations whose productive assets are the very trees and vines that generate agricultural income.

Cochise growers took the tax fight to the courts that led all the way to the Arizona Supreme Court.

In an official news release issued by the Arizona Supreme Court, Justice Maria Elena Cruz, writing for the unanimous Court, explained that allowing assessors to assign a separate market value to permanent crops would reintroduce market considerations that the Arizona Legislature expressly directed assessors to disregard when valuing agricultural property. It also determined that separately valuing the crops after applying the statutory income approach would effectively subject the same agricultural value to two valuation methodologies, contrary to the Legislature's prohibition against double taxation.

A group of those owners challenged the dual valuation in the Arizona Tax Court. The Tax Court ruled in their favor, holding that permanent crops must be valued together with the underlying land under the income approach prescribed by state statute. The Court of Appeals later affirmed. On July 24, 2026, the Arizona Supreme Court vacated the Court of Appeals’ opinion but reinstated the Tax Court’s judgment, delivering a clear statewide clarification.

12 Growers Representing Approximately 17,000 Acres of Permanent Crops

Richard Searle, a second-generation Arizona rancher and agricultural Orchard producer based in Cochise County, was part of the group of owners fighting the tax. “Our group was made up of 12 different growers representing approximately 17,000 acres of permanent crops in Cochise County,” explains Searle. “As a group we coalesced around six or seven of us that originally met with our Assessor, Phillip Leiendecker, to try and explain how onerous and unfair his proposal was. When he basically blew us off, we decided to hire Paul Mooney to help represent us. As we all had the same issue, it seemed to make sense to work together as opposed to going at it individually. As the appeal went forward, we had several growers not named in the appeal joined us to help spread the overall costs of the appeal.”

Searle pointed out that one farmer trying to fight this on their own would have been impossible because of legal fees. “The average farmer can’t fight things like this alone; fighting together meant it could be done.”

High Court’s Core Holding is Unambiguous
 Said the Court: “We conclude that permanent crops qualifying as agricultural property under A.R.S. § 42-12151 are valued under the income approach prescribed by § 42-13101 and may not be separately valued using standard appraisal methods and techniques under A.R.S. § 42-11001(6).”

In practical terms, once land qualifies as agricultural because it contains an aggregate of ten or more gross acres of permanent crops, the entire taxable unit—soil plus trees or vines—is valued solely by capitalizing average annual net cash rental of comparable agricultural property, without regard to urban or market influences. Assessors may not peel off the permanent crops, assign them independent market values, and stack those figures on top of the income-based land value. Doing so, the court noted, would reintroduce precisely the market pressures the Arizona Legislature barred and would risk the double taxation that Title 42 expressly forbids.

Adds Searle, “It’s hard to forecast what would have happened without this win, but it wasn't unreasonable to expect our property taxes to exceed any likely profit our farms and orchards might have had, especially considering that most tree crops are alternate bearing. With alternate bearing years, some on, some off, there isn't a consistent income stream to count on. Also, as all crops are subject to market and weather risks, there are no income guarantees in agriculture.”

The decision also nullifies the relevant portions of the Arizona Department of Revenue’s Agricultural Property Manual that directed assessors to treat permanent crops as separately valued improvements. Administrative guidance cannot override the statutory scheme the Legislature enacted.

The Court held that although the Arizona Department of Revenue has authority to issue manuals and guidance implementing the tax statutes, administrative guidance cannot alter or expand the valuation methods established by the Legislature. Accordingly, the Court ruled that the Department's Agricultural Property Manual is unenforceable to the extent it requires assessors to separately assign market values to permanent crops in addition to valuing qualifying agricultural property under the statutory income approach. The higher Court affirmed the tax court's judgment. Although the Court agreed with the court of appeals' ultimate decision, it vacated that opinion and replaced it with its own reasoning.

Relieved and Vindicated

“Of course, we felt relieved and vindicated that our original position was correct,” explains Searle. “It was obvious to us in the beginning that the county wasn't following State Statute and that their only justification was the Arizona Department of Revenue Manual, which we also knew wasn't law. There was group consensus among us that it wasn't fair to tax some crops and not tax others. Agricultural land is agricultural land regardless of the crops being grown. Plus, there are more permanent crops in Arizona besides nut trees and vines, and if the Assessor's position had held, all of those could have been subject to the whims and fancy of an assessor trying to make a name for themselves.”

For Arizona’s farmers and ranchers who rely on orchards, vineyards, or other permanent plantings, the ruling restores uniformity and predictability tied to state law. Property taxes will track the income-producing capacity of the agricultural enterprise rather than speculative market prices for the trees themselves. The practical effect is a fairer, more stable tax base that treats permanent-crop operations consistently with the current-use policy the Arizona Legislature has long applied to agricultural land.

“As growers trying to fight an obvious unfair and punitive tax increase, we were very appreciative of the industry groups that helped support our cause,” says Searle. “Both Arizona Farm Bureau and Cochise County Farm & Ranch Bureau contributed to our legal expenses along with AMS Insurance and the Arizona Pecan Growers. Our biggest supporter was the American Pistachio Growers Association contributing close to $45,000 towards our legal expenses which, after 3 years of appeals, ended up well over $250,000.  State Statute does allow us to recover some of our legal expenses from the county and state, but due to legal limitations we won't be able to fully recover all our costs. We should also get reimbursed from the county any of the tax increases that were not justified.”

Farmers often say that the assessment appeal process in Arizona is not user friendly, so experienced counsel became very helpful in this situation. “It is obvious that both County Assessors and the State Department of Revenue are not always correct, and ultimately the only way to hold them accountable is to go through the appeal process,” adds Searle.