Ariz. Admin. Code § 15-5-601

Current through Register Vol. 30, No. 24, June 14, 2024

Section R15-5-601 - Taxpayer Bonds for Contractors

A. For the purpose of this rule:

1. The principal place of business shall be Arizona if the licensee has continuously operated a facility with at least one full-time employee in Arizona for 12 consecutive months preceding the determination.

2. A surety bond shall include a bond issued by a company authorized to execute and write bonds in Arizona as a surety or composed of securities or cash which are deposited with the Department of Revenue.

B. The businesses subject to these bonds are grouped in accordance with the standard industry classifications by average business activity. The business classes and bond amounts are as follows:

1. Two thousand dollars for:

a. General contractors of residential buildings other than single family;

b. Operative builders;

c. Plumbing, air conditioning, and heating, except electric;

d. Painting, paper hanging;

e. Decorating;

f. Electrical work;

g. Masonry stonework and other stonework;

h. Plastering, drywall, acoustical and insulation work;

i. Terrazzo, tile, marble and mosaic work;

j. Carpentry;

k. Floor laying and other floor work;

l. Roofing and sheet metal work;

m. Concrete work;

n. Water well drilling;

o. Structural steel erection;

p. Glass and glazing work;

q. Excavating and foundation work;

r. Wrecking and demolition work;

s. Installation and erection of building equipment;

t. Special trade contractors; and

u. Manufacturers of mobile homes.

2. Seven thousand dollars for:

a. General contractors of single family housing;

b. Water, sewer, pipeline, communication and powerline construction.

3. Seventeen thousand dollars for:

a. General contractors of industrial buildings and warehouses;

b. General contractors of nonresidential buildings other than single family;

c. Highways and street construction except elevated highways.

4. Twenty-two thousand dollars for:

a. Heavy construction;

b. Bridge construction;

c. Tunnel construction; and

d. Elevated highway construction.

C. Except as provided in subsection (D) of this rule, any applicant whose principal place of business is outside Arizona or who has conducted business in Arizona for less than one year shall post a bond before the transaction privilege tax license shall be issued.

D. Any taxpayer subject to bonding requirements may submit a written request to the Director of the Department of Revenue for an exemption from the bond. The exemption request shall provide at least one of the following:

1. Any taxpayer who has been actively engaged in business for at least two years immediately preceding the exemption request may submit statements from an authorized state employee from each state in which the business has been licensed in the last two years verifying that the taxpayer has, for at least two years immediately preceding the date of the statement, made timely payment of all sales taxes and other transaction privilege taxes incurred.

2. Two-year reporting history as described above in subsection (D)(1) and an explanation of good cause for late or insufficient payment of the tax;

3. Documentation which verifies that no potential for Arizona tax liability exists;

4. Bond for a previously issued Arizona transaction privilege license that adequately covers the licensee's expected transaction privilege tax liability for Arizona for both the previously issued license and for this license.

E. The bond shall not expire prior to two years after the transaction privilege license is issued. Upon lapse or forfeiture of any bond by any licensee, the licensee shall deposit with the Department another bond within five business days of the licensee's receipt of written notification by the Department.

F. Any licensee, who has had a bond posted for at least two years and fulfills any exception listed in subsection (D), or whose principal place of business becomes Arizona, may request a written waiver and that the bond be returned.

Ariz. Admin. Code § R15-5-601

Former Section R15-5-601 repealed effective August 13, 1987 (Supp. 87-3). New Section R15-5-601 renumbered from R15-10-202 (Supp. 94-1). Amended by final rulemaking at 24 A.A.R. 742, effective 5/13/2018.