Glossary · Activities & Property
Tangible personal property installed in existing property
In short
Something installed into a building that keeps its own identity and could come out in one piece. Swapping it is replacement, even though it never became part of the building.
In full
Property affixed or installed into existing real property that can still be identified after installation, that does not lose its character, and that can be removed in essentially the same form. ADOR's example is machinery and equipment attached to the property.
The contrast is with materials incorporated into real property. Lumber, concrete, wire and pipe stop being separate things once they are in place. A machine bolted to a slab does not.
The distinction earns its place because the statutory definition of replacement reaches this category expressly, alongside a component and a system. Removing an installed machine from service and putting in one with the same, similar or upgraded functionality is replacement, and replacement carries no threshold at any contract size — even though the item was never part of the realty.
The same words mean something different elsewhere in contracting tax. Installing tangible personal property into real property is contracting; installing it into other tangible personal property, a vehicle for instance, is a retail sale with a service attached. The category here is about what an item remains after installation, not about which classification the installer reports under.
A.R.S. § 42-5075(S)(11); ADOR MRRA Contracting page; ADOR Evaluating Mixed Construction Contracts worksheet, step 1a