Special situations
15 entries in this section. Every term is a link — open one for the full definition, its sources, and related entries.
- Automatic warranty A warranty included with the work for no extra charge. It is treated as part of the contract it came with, which decides how warranty-work materials are taxed.
- Construction phase services Work that executes and completes the modification. Never excluded by the design phase provision, and the category most disputed items belong to.
- Design phase services Work that develops the design rather than executing it. Excluded from the tax base only where three contract conditions are met first.
- Development fees Fees a jurisdiction imposes to offset the public cost of a development. Deductible from the contracting tax base, including where they were satisfied by building the infrastructure instead of paying.
- Equipment rental Renting equipment for the contractor's own use is taxable. The lessor owes the tax, and the contractor pays it as part of the price.
- Extended or third-party warranty A warranty sold separately for its own price. The charge for it is not taxable, and ADOR treats the materials used in warranty work as MRRA whatever the original project was.
- Independent functional utility A statutory test for whether equipment is its own thing or part of the building. Equipment that passes it takes its installation contract out of the prime contracting tax base.
- Job Order Contracting A master arrangement under which individual orders define the actual work. Each order is classified on its own, so one arrangement can produce both MRRA and Modification.
- Landfills and solid waste disposal facilities Operating a landfill is outside prime contracting; building roads to one or cells within it may not be. The statute draws the line and then carves two construction activities back in.
- Landscaping and lawn maintenance Two statutory lists with nearly touching entries. Lawn maintenance escapes the tax only if the contract contains no landscaping activity at all.
- Out-of-state project Work performed outside Arizona is not taxed here, but it is reported and then deducted rather than left off the return.
- Professional services Five named licensed professions, and only those five. Excluded on the same contract conditions as design phase services, and not the same deduction as architectural and engineering direct costs.
- Sale-and-installation Selling goods is retail; selling goods and installing them into real property is contracting. Arranging the installation is enough to cross the line.
- Work on an Indian reservation Contracting on a reservation for a tribe or an affiliated Indian is exempt, and the exemption reaches the contract rather than only the materials. Who the work is for decides it.
- Work order The instrument that defines actual work under a master agreement. Under a Job Order Contracting arrangement each one is classified on its own.