In Arizona, if you already have a title, they don't look at the bike at all. If you don't have a title and are going to have to go through a bonding process, they are only interested in the engine and frame serial numbers. You just sign a paper saying that your bike is one of four designations : off highway use only (never check this box), primarily off highway with limited on highway use, primarily on highway with limited off highway use, and on highway use only. In Arizona a highway is any improved, public road or street.
If you mark off highway only, you actually limit your use to trails. If you are on a county dirt road, you are potentially busted. You will get a plate, but only an OHV decal.
Here is where the game comes in.
Always do this one!! If you mark primarily off highway limited on highway, you will get a plate and two tags. One will be the OHV tag ($29) and a regular on road tag, but you will pay a modified (lower) fee for your road tax portion. So your bike will be legal anywhere motorized travel is permitted in Arizona on two wheels, and can be ridden anywhere in the country on the road. This is the best option, because, let's say you are the type that needs a big BMW or some such nonsense, or even a brand new bike that is expensive. If you go this route, you get off way cheaper than any of the others because of the reduction in the VLT.
If you mark primarily on highway with limited off highway, they go balls deep on you. You pay the normal road tax (VLT), which is a percentage of the vehicle value, plus you pay the other 29 bucks for the off highway tag.
On highway only is self explanatory.
The DMV does no follow up on usage, you could have a Harley and mark primarily off highway and get a sweet discount on yearly dues, you would have to keep the OHV tag current, though or else it defaults to on highway only and you have a higher VLT.