MRRA Credit Request Procedure

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A MRRA Credit Request is a request for tax credit per A.R.S. § 42-5008.01(D), which allows a contractor to obtain an offset/credit for TPT paid on materials purchased or reported under business code 315 when the project changes from a MRRA project to modification as a result of change orders or incorrect categorization of the project.

If a MRRA contract becomes modification, then the prime contractor should provide the subcontractor(s) with a completed Form 5005 and require that all subcontractors provide the contractor who hired them with a completed Affidavit of Retail TPT Equivalent Paid by the Subcontractor. This is to obtain a credit on the taxes paid on the cost of materials used in the project. The prime contractor will use the receipts and information from the affidavit to complete the MRRA Credit Summary Workbook and submit it to the Department. The Department will apply it to the tax liability on the modification project.

This should be completed within six (6) months of the alteration project turning into a modification.

Who can request a MRRA Credit?

Only a prime contractor in charge of an MRRA project that changed to modification as a result of change orders or incorrect categorization can claim the credit.

When can the contractor request a credit?

The prime contractor is encouraged to request the credit as soon as possible after the project changes from MRRA to modification as a result of change orders or as soon as they realize it has been incorrectly categorized. However, the credit should be requested within no more than six (6) months of the change.

How do you submit a request for a credit?

  • Once you have gathered all of the affidavits from all of the subcontractors, download the MRRA Credit Summary Workbook (in Excel format) and fill-in the information by following the  details on the INSTRUCTIONS tab.
    NOTE: COMPLETE ONE MRRA CREDIT SUMMARY PER PROJECT PER CREDIT REQUEST.
  • If necessary, download and fill out a POA/Disclosure Authorization Form 285, 285B, or 285C using the Tutorial.
    • Note: A Power of Attorney is required when someone other than the taxpayer is submitting the MRRA Credit Request.
  • Email the POA/Disclosure Authorization Form and MRRA Credit Summary Workbook to [email protected].
  • IMPORTANT: The subject line of the email should identify MRRA CREDIT REQUEST for proper assignment.

What to expect next

A MRRA Credit Request Number is assigned once the POA/Disclosure Authorization Form and MRRA Credit Summary have been received. Once all necessary information is received,  the MRRA Credit Request will be assigned for review.

A review will be conducted to:

  1. Confirm the project changed from alteration to modification and is reported as modification to the Department, and
  2. To ensure the accuracy of the information listed on the MRRA Credit Summary Workbook.

The reviewer may contact the prime contractor or appointee in the POA/Disclosure Authorization Form with additional questions or request sample invoices forming the basis of the calculation.

A Determination Letter is emailed to the appointee and/or prime contractor.

The Department maintains the right to request additional documentation, if necessary, to complete the review of the MRRA Credit Request per A.R.S. § 42-5025 and A.R.S. § 42-1105 (D) and (E) to facilitate the approval of the request.