AZ HB2749

Amends the definition of "alteration" to exclude work that increases the square footage of existing residential structures under the roof, meaning such expansion work would be subject to prime contracting tax rather than treated as a non-taxable alteration.

Clarifies that for residential property, the 15 percent contract amount threshold (previously 25 percent) applies only to work not under the existing roof; work under the roof maintains different treatment.

Establishes that for non-residential property, alterations remain exempt from prime contracting tax if the contract amount does not exceed $750,000.

Adds definition of "residential" property to include class two, three, and four property under Arizona's property tax classification system that is used for residential purposes.

Effective December 31, 2022, applying to contracts, bids, or binding obligations entered into on or after that date.