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TPT tax

  • 1.  TPT tax

    Posted 05-23-2018 13:04
    Gov. Ducey recently signed SB1409 regarding TPT tax law. The new law is effective December 31, 2018. Any bids submitted or contracts entered into or any other binding obligations executed before December 31, 2018 will use the current tax law.

    Highlight of the Change :
    Prime contracting tax will not apply to contractors who are NOT required to be licensed by the Registrar of Contractors.
    Regarding Subsection O - Maintenance, Repair, Replacement and Alterations. The thresholds for Alterations will change at the effective date. Only the $750,000 threshold remains, the thresholds related to square footage of the property will be eliminated.
    No changes to Residential Alterations.
    No changes to Maintenance, Repair or Replacement.

    By elimination of the commercial square footage thresholds, the inconsistency of application to tenant improvements based on property ownership will be gone, as well as the sales tax risk on those projects that, over the course of the job, may breach these particular thresholds.

    All tax exemptions remain unchanged.

    Many stakeholders were involved in the proposed legislation, which is why only a small change was accomplished and not a sweeping change as was originally hoped for. Senator Fann was the sponsoring Senator of the legislation. She understands the challenges our industry faces and was a thoughtful advocate for our industry as was Mike Gardner of TriAdvocates.

    CFMA, particularly Dave James and Marj Webber, represented and eloquently expressed the concerns of the construction industry during the stakeholder meetings. At the upcoming Southwest Regional CFMA Conference there will be a panel discussion which will discuss "How the sausage gets made" or a behind the scene look at how the legislative process works. It will be a very interesting discussion. I encourage you to attend. September 23 - 25 at Talking Stick resort in Scottsdale, www.southwest.cfmaregional.org

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    David Miller CCIFP, CRIS, CTP
    Cfo / Treasurer
    Jokake Construction Services, Inc.
    Phoenix AZ
    (602) 224-4573
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