Arizona Taxpayer Bond for Contractors

In the state of Arizona, an Arizona Taxpayer Bond for Contractors is a type of surety bond required by the Arizona Department of Revenue (ADOR) for certain contractors. This bond is designed to guarantee that the contractor will pay all transaction privilege taxes (TPT) and any other obligations due to the state. CLICK HERE if looking for a Contractors License Bond Application. 

Who needs this surety bond?

The ADOR requires contractors to obtain an Arizona Taxpayer Bond for Contractors if they meet any of the following criteria:

• New contractors: This includes any contractor who has been in business for less than one year.
• Out-of-state contractors without a principal business location in Arizona: These contractors are required to obtain a bond regardless of their experience.
• Contractors who have displayed a history of TPT noncompliance: This includes contractors who have failed to pay TPT on time or in full in the past.
• Contractors who have had their TPT license revoked or suspended: These contractors will be required to obtain a bond before they can be reinstated.

How To get an Arizona Taxpayer Bond for Contractors

At Surety1.com we make it easy to obtain this surety bond. Our simple, three step process is:

1. Complete the easy to navigate and secure online application. ¹
2. Review the free, no obligation quote from one of Surety1’s professional surety bond agents, usually within one business day.
3. Sign some paperwork and pay the bond premium

Once these steps have been completed, the Arizona Taxpayer Bond for Contractors will be shipped to the bond applicant.
^{1 -The name of the applicant on the surety bond application must match exactly the full legal business name of applicant for the license.} 

Surety1.com is a service of AssuredPartners one of the largest and fastest growing insurance agencies in the nation. Representing over a dozen surety bond companies, Surety1.com is the premier online provider of surety bonds nationwide since 2003.

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What is the surety bond amount?

Here are the current bond amounts for Arizona Taxpayer Bonds for Contractors:

• $2,000: For general contractors of residential buildings other than single family
• $7,000: For general contractors of single-family residential buildings
• $17,000: For specialty contractors other than plumbing, electrical, or mechanical contractors
• $22,000: For plumbing, electrical, or mechanical specialty contractors

The cost of the surety bond is usually between 1% and 3% of the bond amount, subject to a minimum premium and fees of $150. Surety1 will shop its many markets to procure the right price at the right terms.

What are the differences between a Contractor’s License Bond and an Tax Payers Bond for contractors?

The Residential Contractor’s License Bond and the Arizona Taxpayer Bond for Contractors are both surety bonds required by the state of Arizona, but they serve different purposes. Here is a breakdown of their key differences:

Purpose:

• Residential Contractor’s License Bond:
  • Guarantees the contractor will comply with all applicable laws and regulations governing residential construction.
  • Protects consumers from financial losses due to contractor misconduct, such as failure to complete projects, shoddy workmanship, or violation of building codes.
• Arizona Taxpayer Bond for Contractors:
  • Ensures the contractor will pay all Transaction Privilege Taxes (TPT) and any other obligations due to the state.
  • Protects the state of Arizona from financial losses if the contractor fails to pay their taxes.

Required By:

• Residential Contractor’s License Bond:
  • Required by all contractors who apply for a Residential General Contractor or Residential Specialty Contractor license in Arizona.
• Arizona Taxpayer Bond for Contractors:
  • Required by specific categories of contractors, including:
  • New contractors
  • Out-of-state contractors without a principal business location in Arizona
  • Contractors with a history of TPT noncompliance
  • Contractors who have had their TPT license revoked or suspended

Bond Amount:

• Residential Contractor’s License Bond:
  • Amount depends on the license type and anticipated annual gross volume.
  • Typically ranges from $4,250 to $22,000.
• Arizona Taxpayer Bond for Contractors:
  • Amount varies based on the type of contracting being performed and the contractor’s compliance history.
  • Ranges from $2,000 to $22,000.