Glossary · Forms & Certificates
Form 5022 — Speculative Builder Resale Certificate
In short
The certificate by which one Speculative Builder buys partially improved property from another and takes on the tax the seller would otherwise owe. What the code requires and what the form collects are not the same thing.
In full
Form 5022 is the Speculative Builder Resale Certificate. It documents the sale of partially improved real property from one Speculative Builder to another, and it is the only contracting certificate the purchaser issues to the seller.
The purchaser completes it and furnishes it to the seller at the time of the sale, and the purchaser is the only signatory. By signing, the purchaser assumes liability for and undertakes to pay all taxes that would otherwise be due the City or Town at the time of the sale, declares being licensed with the Arizona Department of Revenue to conduct business as a Speculative Builder, and certifies that the purchase is for resale to another Speculative Builder.
The exclusion the certificate supports comes from Model City Tax Code § 416(b)(4), and that provision imposes three conditions together. The purchaser must hold a valid municipal privilege tax license for construction contracting as a Speculative Builder. The purchaser must provide the seller a properly completed written declaration assuming liability at the time of the transaction. And the seller must also maintain proper records of the transaction, retain a copy of the declaration, and be properly licensed with the City as a Speculative Builder.
Published sources differ on what the certificate records. The code conditions the exclusion on municipal licenses held by both parties; the form declares the purchaser's state license with the Department of Revenue and collects the seller's TPT license number as a field without stating any requirement attached to it. A certificate completed exactly as the form is printed does not on its face document either municipal license the code requires.
The property must be one of four things the form enumerates: a new structure that is partially complete; property improved without a structure, given as paving or landscaping; reconstructed property as provided by Section 416.2; or property that has had water, power or streets constructed to the property line. Those four track the code's definition of improved real property at § 416(a)(2); partially improved means such property being developed for sale where the improvement is not substantially complete at the time of the sale.
Incomplete certificates are not considered to be accepted in good faith. The form advises that seller and purchaser should each retain a copy; under § 416(b)(4)(C) the seller's retention is a condition of the exclusion rather than advice. It is not sent to the Department.
Arizona Form 5022, Speculative Builder Resale Certificate (ADOR 11387, 5/20); Model City Tax Code § 416(a)(2), (a)(4), (b)(4)