Annual Bond Exemption Expires Soon

Phoenix, AZ—In the spirit of continuous improvement, the Arizona Department of Revenue would like to inform construction contractors that the Annual Bond Exemption program began its run on July 1, and expires on July 31. In 2018, the Arizona Department of Revenue stopped issuing paper Annual Bond Exemption Certificates to in-state contractors in good standing. Instead, the Department provides an electronic listing of qualified exempt contractors to each city and town on August 1.

An Annual Bond Exemption provides documentation for city building authorities that contractors have met the bonding requirements under A.R.S. 42-5007 for modification projects valued at $50,000 or more. The qualifications for the Annual Bond Exemption List are the following:

1. The start date of the transaction privilege license must be at least one year before the current date.
2. Cannot have more than two delinquencies in the past 12 consecutive months.
3. No more than $500 in tax liabilities are currently due.
4. The mailing or physical address must be an Arizona address.
5. A minimum of $10 was paid in tax liability for the past 12 consecutive months.

To avoid being disqualified from the Annual Bond Exemption List, it is highly recommended that you file and pay your June period at the same time. 

If you have any questions regarding bond exemptions, please reference Publication 539 Taxpayer Bonds or visit our Bond for Contractors page.

Friday, July 7, 2023