Contracting Guidelines
Prime Contractors engaging in taxable construction projects or activities are required to obtain a TPT license. New prime contractors and out-of-state prime contractors are required to post a bond with the Arizona Department of Revenue (ADOR). The Arizona Joint Tax Application (JT-1) used to apply for a TPT License (and other licenses) can be completed online and printed by clicking the link below.
MRRA Contractors
As of Jan. 1, 2015, contractors who only enter into contracts with owners of real property to maintain, repair, replace or alter their property (“MRRA projects”) are not required to obtain or renew an existing TPT license. These contractors, however, are required to pay all state and local taxes when purchasing materials that will be incorporated into a MRRA project. The following Arizona Transaction Privilege Tax Notice provides guidance regarding taxable prime contracting projects and nontaxable MRRA activities:
If a TPT-licensed prime contractor hires a MRRA contractor (who does not have a TPT license) as a subcontractor on a taxable project, the prime contractor may complete an Arizona Form 5009L to allow the unlicensed MRRA contractor to purchase materials for the project exempt from tax. Arizona Form 5009L must first be submitted to ADOR for approval.
Separately, a MRRA contractor who does not have a TPT license needs to purchase materials for a nontaxable MRRA project in which a statutory exemption exists (such as statutorily tax exempt repair parts for manufacturing equipment). The unlicensed MRRA contractor may use Arizona Form 5000M to purchase the exempt repair parts.
Other Certificates Used ONLY by TPT-Licensed Prime Contractors:
Other certificates used only by TPT-licensed prime contractors include the following:
- Download Arizona Form 5000 -- TPT Exemption Certificate - General (Sales to a Business, Native Americans, Government Entity or Nonresidents) (PDF)
- Download Arizona Form 5005 -- Contractor's Certificate (PDF)
Instructional online videos are available to explain the statutory prime contracting changes that went into effect Jan. 1, 2015, and to also provide a discussion of licensing and filing requirements for contractors. These videos also help understand how TPT will apply to a business in the future, and provide guidance about reporting contracting income on Form TPT-2.