The place to find business sales tax information

— as well as solutions, services and jobs!

Arizona MAAR Contractors: Simplified Sales Tax Facts

author photo of Gabrielle Luoma

When it comes to Arizona sales tax, contractors have historically faced incredible complexities and challenges. Recently however, the laws changed to simplify these rules by separating contractors into two groups; prime contractors and MAAR (Maintenance, Repair, Replacement and Alteration) contractors.

Now that the law has been around for a couple of years, things have simmered down a bit. The Arizona Department of Revenue has clarified the position AND most of us (tax professionals) seem to understand it now.

Here are some sales tax facts to help you better understand MAAR contractor requirements in Arizona:

1. Definition: If you are doing any of the following tasks on your contract/job (not new construction) you are (most likely) a MAAR:

a) Maintenance - The upkeep of property or equipment such as HVAC systems

b) Repair – Any activity restoring, repairing from inoperable state to a usable state such as recharging your A/C unit, clearing pipes, or making adjustments

c) Replacement – You're just replacing or upgrading the system such as HVAC, bathroom cabinets, carpets

d) Alteration– Activity causing direct physical change to real property such as refinishing hardwood floors, enlarging a patio

2. Collecting and Paying Sales Taxes: As a MAAR contractor, you do NOT collect or pay sales taxes to the AZDOR. However, you DO pay sales taxes on all purchases of supplies and materials.

3. Your Contractor Status Can Vary By Contract/Job: Always, always, always - make sure you understand your position in a contract. There may be times you are working on new construction but you are still considered a MAAR contractor. Your receipts must be 15% or less of the total receipts on a taxable project which falls within the de minimis rules for MAAR compliance.

Basically - if you are a MAAR contractor, your life just became so much easier in Arizona.

For more information on MAAR contractor tax issues, please read ARIZONA TRANSACTION PRIVILEGE TAX NOTICE TPN 14‐1 November 18, 2014.

If you are contracting in other states, remember that each state (and location) has different sales tax rules by which you must abide. If you need some help figuring out what you need to do - please contact us. We work with contractors in Arizona - as well as other states.

Questions or Consultation Requests?

Do you have questions about Arizona transaction privilege tax (and/or multi-state sales tax) - or does your business need assistance with other tax issues? Gabrielle welcomes inquiries from users.

Please use the "Request a Consultation" link on the GMLCPA FIRM PROFILE page to submit your question or consultation request.

Other recent “Arizona (AZ)” posts by Gabrielle Luoma, CPA, CGMA:

NOTE: All blog content, comments, and participation subject to disclaimer at bottom of page.


Submit a comment or question - only your first name will appear


Access to any portion of is contingent upon your acceptance of our Terms of Use. This Web Site and content provided by STS Publishing, LLC and its third party content providers, including, but not limited to information, documents, forms, comments, advice and opinions, is for informational purposes only, and is not a substitute for professional advice, nor does the use of this Web Site constitute a professional-client relationship. The Web-Site also includes advertisements, directory listings, job postings and links to third party web sites, all of which are provided for your convenience only and in no way constitute a referral, endorsement, or warranty by of any product or service provided by such third parties. All content is provided “as is” with no guarantee regarding accuracy, suitability, or timeliness. Your reliance on any content accessed on or through the Web Site, or on any product or service provider is strictly at your own risk.