Extended or third-party warranty
In short
A warranty sold separately for its own price. The charge for it is not taxable, and ADOR treats the materials used in warranty work as MRRA whatever the original project was.
In full
An extended warranty is separately sold and optional, whether the contractor sells it or a third-party home warranty company does. That separateness is what distinguishes it from a warranty automatically included with the work.
The charge is not taxable. ADOR states that extended warranties sold by a contractor or by third-party home warranty companies are not taxable pursuant to A.R.S. § 42-5061(A)(3), whether the warranty covered a Modification project, an MRRA project, or was purchased at any other time.
The materials are the part that surprises people. Materials incorporated into projects in the performance of extended warranties are always considered to be incorporated into an MRRA project, and are therefore taxable at the point of purchase, or if purchased exempt, reported as the retail equivalent under business code 315.
Always means always. An extended warranty sold alongside a Modification project does not carry that project's treatment into the warranty work; the original classification is simply not consulted.
That makes it the one warranty case where the classification of the underlying contract does not decide the answer, and the reason it is worth separating from the automatic warranty rather than treating both as warranties.
ADOR Contracting FAQs; A.R.S. § 42-5061(A)(3)