Every contractor I've worked with has taken 50% up front and 50% when the job is finished. This is normal. One thing I would recommend is you vet your contractor thoroughly--check reviews, make sure they have a legitimate website, testimonials etc...
Withholding Percentage Options Keep in mind for tax year 2023 and beyond, the tax rate for Arizona taxable income is 2.5%.
A total Transaction Privilege (Sales) Tax rate of 8.35%, (6.35% State and County, 2.00% Prescott), is imposed on the gross income of any person engaging in Construction Contracting. If tax has been neither separately charged nor separately collected, factoring of tax is allowed in computing taxable income.
How much is property tax in Arizona? Arizona's property tax rate is around 0.51%, well below the national average of 0.99%. Arizona's average combined state and local tax bill is around $1,707 per year, which is $1,088 less than nationwide rates.
Arizona has a flat 2.50 percent individual income tax rate. Arizona has a 4.9 percent corporate income tax rate. Arizona also has a 5.6 percent state sales tax rate and an average combined state and local sales tax rate of 8.38 percent.
The State of Arizona sales tax rate for retail purchases is 5.6%. Maricopa County adds 0.7% sales tax to support roads and jails. In addition, each city may add sales tax.
Protect Yourself when Working with Custom Home Builders Only work with a licensed contractor. Get the contract in writing. Avoid “lump sum” bids. Talk to several contractors. Tie payments to deliverables. Get proof of payment to suppliers.