Glossary · Activities & Property
Real property
In short
Land and what is permanently attached to it. Arizona's TPT statutes never define it, and the entire contracting classification depends on it.
In full
Land and everything permanently attached to it. A.R.S. § 42-5075 uses the term throughout — the MRRA exclusion applies to a contract with the owner of real property, and modification means work on structures on it — and never defines it.
The distinction that matters to a contractor is between materials incorporated into real property and tangible personal property installed in existing property. Incorporated materials lose their separate identity and become part of the realty. Installed personal property can still be identified after installation, keeps its character, and can be removed in essentially the same form.
Which side a transaction is on decides the classification. A retailer who sells materials and arranges to install them into real property is a contractor for that transaction. The same retailer installing into tangible personal property — a vehicle, for instance — stays under the retail classification, and separately stated installation labor there is a service in addition to the sale.
The property tax chapters do supply a definition, but of a different term and for a different purpose. A.R.S. § 42-11001(13) defines real estate, and scopes that definition to chapters 11 through 19 of title 42, which are the property tax chapters and not the transaction privilege tax chapter.
One asymmetry is worth carrying. The statutory definition of replacement reaches both a component or system of existing property and tangible personal property installed in existing property, so an item that never became part of the realty can still be the subject of MRRA work.
A.R.S. §§ 42-5075(P), (S)(11), 42-11001(13); ADOR MRRA Contracting page; ADOR Contracting FAQs