Whether the 25% alteration cushion covers overruns no change order caused, and contracts with mixed work
Sent to ADOR Tax Policy on October 7, 2026. A response is outstanding.
The question
A.R.S. § 42-5075(S)(1)(d) keeps work an alteration where it exceeds the threshold by not more than 25% for any reason, if the owner and the contractor reasonably believed at the start that it was an alteration. ADOR's MRRA Contracting page says a project remains an alteration contract as long as it has no maintenance, repair or replacement elements when bid. The question asks whether the cushion covers an overrun no change order caused, and a contract that had such elements at bid.
Glossary entries flagged by this question
When an answer is expected
ADOR Tax Policy states a response time of 25 business days for Transaction Privilege Tax questions, answered in the order received. Follow-ups are sent on business day 25 and every 10 business days after that. The next follow-up is due November 13, 2026.
The answer is recorded on this page when it arrives, with every place it changed something on this site.