Invoicing & Pricing
9 entries in this section. Every term is a link — open one for the full definition, its sources, and related entries.
- Gross receipts The total taken in before any deduction. Arizona defines three overlapping terms for it, and the prime contracting classification does not run on the one most people say.
- Indirect cost of doing business How tax paid on materials is treated on an MRRA contract — as an input cost the contractor absorbs and prices for, not as tax charged to the customer.
- Markup The amount a contractor adds to cost to arrive at the price charged. A pricing term, not a tax term — but where it is added changes what is taxed.
- Overhead and profit On a mixed contract, overhead and profit are spread across the activity types pro rata by direct costs before the 15% test is run.
- Separate line item Whether tax is shown as its own line on the customer's invoice. The rule reverses between MRRA and prime contracting, and published sources differ on the prime contracting side.
- Tax base The figure the tax rate is applied to. For prime contracting it is 65% of gross, after the statutory deductions come out.
- Tax factoring Working the tax back out of a price that already includes it, for contractors who quote a flat amount rather than showing tax separately.
- The 35% reduction Thirty-five percent of a prime contracting contract is excluded from tax automatically. The statute states it as a 65% base rather than as a deduction.
- The factor The number a contractor multiplies a tax-inclusive flat price by to arrive at the tax owed. It varies by location and is not one statewide figure.