AZ HB2807

Amends the definition of "alteration" in the prime contracting classification to exclude increases in square footage under the roof of existing residential structures from qualifying as tax-exempt alterations.

Changes the threshold for existing property not under the roof from 25 percent to 15 percent of the most recent full cash value to qualify as an alteration exempt from prime contracting tax.

Adds a new definition of "residential" property to clarify which properties qualify for alteration exemptions, including Class 2, 3, and 4 property used for residential purposes.

Expands the definition of "modification" to include activities that increase the square footage of existing residential structures under the roof, making such work subject to prime contracting tax.

Takes effect December 31, 2023 and applies to all contracts, bids, or binding obligations entered into after that date.