Bond for Contractors

Contractors engaging in taxable construction projects or activities are required to obtain a TPT license. New contractors and out-of-state contractors are required to be licensed with the Registrar of Contractors and, in most cases, must post a bond with the Arizona Department of Revenue (ADOR). Because of the bonding requirements for a new contractor, the online application is not allowed. The Arizona Joint Tax Application (JT-1) used to apply for a TPT License (and other licenses) may be accessed by clicking the link below. Submit the appropriate bonding paperwork with the paper JT-1; include a copy of the bond.

Download Arizona Joint Tax Application (JT-1) Form (PDF)

Download Taxpayer Bond for Contractors

Bonding Requirements

New contractors, out-of-state contractors without a principal business location in Arizona, and contractors who have displayed a history of TPT noncompliance are generally required to provide a bond to the Department to ensure payment of taxes. A principal place of business is defined by statute to mean that in the preceding 12 month period a contractor has maintained a facility in Arizona with at least one full-time employee.

• A.R.S. § 42-5006 requires a contractor to maintain the bond for at least two years if the contractor conducted business for less than one year in Arizona, or if the contractor’s principal place of business is outside of Arizona. The bond amount ranges depending on the type of contracting being performed.

Bond Amounts - A.C.C. R15-5-601(B)

The businesses subject to these bonds are grouped in accordance with the standard industry classifications by average business activity. The business classes and bond amounts are as follows:

• $2,000 for:
  • General contractors of residential buildings other than single family;
  • Operative builders;
  • Plumbing, air conditioning, and heating, except electric;
  • Painting, paper hanging;
  • Decorating;
  • Electrical work;
  • Masonry stonework and other stonework;
  • Plastering, drywall, acoustical and insulation work;
  • Terrazzo, tile, marble and mosaic work;
  • Carpentry;
  • Floor laying and other floor work;
  • Roofing and sheet metal work;
  • Concrete work;
  • Water well drilling;
  • Structural steel erection;
  • Glass and glazing work;
  • Excavating and foundation work;
  • Wrecking and demolition work;
  • Installation and erection of building equipment;
  • Special trade contractors; and
  • Manufacturers of mobile homes.
• $7,000 for:
  • General contractors of single family housing;
  • Water, sewer, pipeline, communication and powerline construction.
• $17,000 for:
  • General contractors of industrial buildings and warehouses;
  • General contractors nonresidential buildings other than single family;
  • Highways and street construction except elevated highways.
• $22,000 for:
  • Heavy construction;
  • Bridge construction;
  • Tunnel construction; and
  • Elevated highway construction.

Paperless Annual Bond Exemption Certificates

The Arizona Department of Revenue does not issue 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.

When applying for a building permit, the local city building authorities may confirm with their city that a contractor is on the exemption list.

If not on the list, the city will not issue the permit without certification from the Department of Revenue that the contractor has satisfied bonding requirements as set forth in A.R.S. § 42-5007 or is exempt from bonding obligations for the project. The Department may still issue a one-time exemption certificate for individual projects to qualified contractors.

Benefits of this e-process include contractors no longer having to wait for a mailing from ADOR, cities having access to all qualified contractors through an online information access system and the savings of taxpayer dollars from reduced processing time and supplies for the Department of Revenue.

Publication 539 - Taxpayer Bonds

Construction Contractors - The Annual Bond Exemption expires on July 31. The new list of approved contractors are made available to the cities on August 1. If you have any questions regarding your Annual Certificate, please email [email protected] or visit our Contracting FAQ’s.

For taxpayer bond information:

Call (602) 716-6056 or

Write to:
Arizona Department of Revenue
Taxpayer Information & Assistance
1600 W Monroe
Phoenix, AZ 85007

Email: [email protected]