Glossary · Activities & Property
Repair
In short
Returning existing property to a usable state from partial or total inoperability. Physically swapping a broken part can be repair rather than replacement.
In full
Returning existing property to a usable state from a partial or total state of inoperability or non-functionality. ADOR's examples are fixing a leaky bathtub or shower, and repairing hail-damaged windows and roof tiles by replacing them.
That last example is worth pausing on. Physically swapping an item out can be repair rather than replacement. What separates the two is the starting condition: repair restores something that had stopped working, while replacement removes a component, system or installed item from service and installs one with the same, similar or upgraded function, working or not.
The distinction rarely changes the tax outcome, because neither carries a threshold at any contract size. It matters when charges are sorted into activity buckets on a mixed contract, where each charge is assigned to the activity it actually belongs to.
There is no statutory definition. A.R.S. § 42-5075(S) defines alteration, modification and replacement, and leaves repair to ADOR's MRRA Contracting page and the Evaluating Mixed Construction Contracts worksheet.
Work is checked against maintenance, repair and replacement first. Only work that none of those covers can be alteration.
A.R.S. § 42-5075(P); ADOR MRRA Contracting page; ADOR Evaluating Mixed Construction Contracts worksheet, step 1a