Whether a scope-related change order's modification content re-enters the de minimis computation
Sent to ADOR Tax Policy on September 27, 2026. Answered September 30, 2026.
The question
A.R.S. § 42-5075(P)(2) treats a scope-related change order the same as the original contract regardless of the modification activity it contains, which can be read as ruling out a fresh de minimis computation. ADOR's Contracting FAQs send a MRRA project with significant change orders back to the Evaluating Mixed Construction Contracts worksheet, and its MRRA Credit Request Procedure provides a credit when a project changes from MRRA to modification as a result of change orders. The test is all-or-nothing, so one change order can move the whole contract, original MRRA work included.
What ADOR said
A change order that directly relates to the original scope of work is folded into the original contract, and the de minimis computation is redone on the combined total; a reclassification applies from the start of the contract. A.R.S. 42-5075(P)(2) decides only whether a change order is part of the original contract or a separate one. A change order unrelated to the original scope is treated as a new contract from its date.
What changed. The glossary entries Change order, De minimis, Reclassification, and MRRA Credit Request; the Classifier's change-order handling.