AZ SB1446

Removes requirement that cities/towns and counties mandate transaction privilege tax licenses or business licenses as a condition for issuing building permits, though they may require applicants to obtain licenses within 30 days after permit issuance.

Eliminates requirement that contractor license applicants provide current privilege tax license numbers and removes privilege tax license as prerequisite for contractor licensing.

Creates new liability mechanism in section 42-5008.01 for prime contractors and subcontractors who purchase materials exempt from tax but incorporate them into taxable projects, requiring them to report and pay taxes on those materials.

Establishes safe harbor provisions for persons canceling transaction privilege tax licenses: materials on hand valued at $10,000 or less are not taxable; amounts over $10,000 can be paid in a lump sum or 12 monthly installments.

Clarifies treatment of maintenance, repair, replacement, and alteration activities as non-taxable "projects" under section 42-5075, subsection O, with specific thresholds based on contract amount and property type, and provides good faith safe harbor for contracts bid or entered before the effective date.