Whether a contract at exactly 15% is de minimis
Sent to ADOR Tax Policy on September 26, 2026. Answered September 30, 2026.
The question
The statute excludes a de minimis amount of modification activity and gives no percentage. ADOR's Evaluating Mixed Construction Contracts worksheet treats de minimis as less than 15% of the contract value; its Contracting FAQs treat it as 15% or less. A contract at exactly 15% is MRRA under one and prime contracting under the other, and the test is all-or-nothing.
What ADOR said
A contract whose modification portion is exactly 15 percent of the total contract value remains MRRA: de minimis includes 15 percent. ADOR traces the 15-percent-or-less wording to the former Taxpayer Notice 15-1, carried into its Contracting FAQs, and reads the worksheet's 'less than 15%' as not excluding exactly 15 percent.
What changed. The glossary entries De minimis and Combined modification charges; the Classifier's de minimis branch.