A contractor is not required to obtain a 2015 prime contracting TPT license if its business activities are limited to contracts for the maintenance, repair, replacement or alteration of existing property with the owners of real property or the owners of the improvements to real property or agents of the owners.
TPT License & Real Property or Agents of the Owners
These contractors will pay retail tax at the point of sale when materials are purchased.
- Maintenance is the upkeep of property or equipment.
- Repair is an activity that returns real property to a usable state from a partial or total state of inoperability or nonfunctionality,
- Replacement is the act of replacing something that exists with something else, including the upgrading of existing systems.
- Alteration is an activity that causes a direct physical change to real property without causing a change in the identity of the real property.
Prime Contracting TPT License for 2015
A contractor who modifies any structure, project, development or improvement needs a prime contracting TPT license for 2015.
A prime contractor who hires unlicensed contractors as subcontractors on a taxable project must first submit Form 5009L to obtain a project-specific certificate from the Department of Revenue to issue to its subcontractors, so that the subcontractors may purchase tax-exempt materials for the specific project.
A prime contractor who hires another prime contractor in 2015 can continue to supply Form 5005 to that prime contractor. Some contractors will have taxable modification activities and nontaxable repair activities.
TPT License for 2015b & Taxable Activities
You should track the use of materials toward taxable or nontaxable activities as part of your business’s requisition costing procedure to determine specific materials for specific projects. You may use AZ Form 5000 only when purchasing materials for taxable activities.