AZ TPT Commercial Contractor Decision Tree Use this form for contracts bid or entered into on or after January 1, 2015 and prior to December 31, 2018. For newer contracts, please use this version. Arizona law requires contractors to determine whether construction contracts are “Prime/Modification” contracts or “Maintenance, Repair, Replacement or Alteration”(MRRA) contracts. The type of contract determines who is responsible for reporting Transaction Privilege Tax (TPT) and at what rate. Our Transaction Privilege Tax (TPT) test will help guide you through the process of determining the tax treatment of your contract. It can also be used as further documentation to support your tax treatment decision. Step 1 of 2 50% Any accounting, business or tax advice contained in this communication, including attachments and enclosures, is not intended as a thorough, in-depth analysis of specific issues, nor a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, BeachFleischman PC would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. Agree to Terms* I agree Name*Email* Planning to print this for your records? Feel free to add any extra information to fit your purpose.Contract ID(Optional)Assessment Date Date Format: MM slash DD slash YYYY (Optional)Description(Optional)Q&A Q1: Was the contract bid/signed prior to 5/1/2015? q1-radio*YesNo Q2: Is the contract for Roadway and surface/subsurface work through Arizona Department of Transportation (ADOT), Counties and Cities? q2-radioYesNo Q3: Is the contract for ModificationModification is Ground up, new construction of real property. of real property? q3-radioYesNo Contract is then for MaintenanceMaintenance is the upkeep of property or equipment., RepairRepair is an activity that returns real property to a usable state from a partial or total state of inoperability or nonfunctionality., ReplacementReplacement is the removal of one component or system of existing property or tangible personal property installed in existing property, ..., or AlterationAlteration is an activity or action that causes a direct physical change to existing property.. Q4: Does the contract contain ModificationModification is Ground up, new construction of real property. work that has a revenue value of 15% or more of the contract value? q4-radioYesNo Q5: Is the contract for MaintenanceMaintenance is the upkeep of property or equipment., RepairRepair is an activity that returns real property to a usable state from a partial or total state of inoperability or nonfunctionality., or ReplacementReplacement is the removal of one component or system of existing property or tangible personal property installed in existing property, ...? q5-radioYesNo Contract is considered AlterationAlteration is an activity or action that causes a direct physical change to existing property. of real property. Q6: Is the initial contract: Greater than $750,000? or Scope of work greater than 40% of existing square footage? or Scope of work includes expansion of greater than 10% of existing square footage? q6-radioYesNo Contract is considered exempt for AZ TPT purposes. TPT paid at material level to vendor or self reported by purchaser on TPT-1 business code 315. Extra Step: Perform retrospective look at contract for additional 25%. Q7: At the end of the contract, is: The contract value greater than $937,500? or Scope of work is greater than 50% of existing square footage? or Scope of work includes expansion of greater than 12.5% of existing square footage? q7-radioYesNo Prime contract treatment permitted. MRRA treatment permitted with a good faith decision. Entire Contract Considered Prime - General pays TPT on all contract gross receipts utilizing applicable deductions. No change in treatment. NameThis field is for validation purposes and should be left unchanged. Share this:Click to share on LinkedIn (Opens in new window)Click to share on Facebook (Opens in new window)Click to share on Twitter (Opens in new window)
