Specialty contractor
In short
A trade contractor licensed for one specialized craft rather than for whole structures. The label is a licensing scope and decides nothing about tax classification.
In full
A specialty contractor performs construction work requiring special skill and involving specialized construction trades or crafts — electrical, plumbing, HVAC, roofing, drywall, glazing. A.R.S. § 32-1102 sets three specialty license classes, specialty commercial, specialty dual licensed, and specialty residential, alongside four general classes.
For tax the term is used but never defined. A.R.S. § 42-5075 includes specialty contractors within the definition of contractor at (S)(3), and provides that a prime contractor may contract with subcontractors or specialty contractors at (S)(10). It supplies no separate definition and attaches no separate treatment.
That is the point worth carrying. A specialty license limits the scope of work a business may perform. It does not decide the classification of any contract that business signs. A specialty contractor working directly for the property owner on a Modification project is the prime contractor on that contract and liable for the tax. The same business working under a prime on the next project is a subcontractor. Each contract is evaluated separately, and the alteration threshold is applied to the specialty contractor's own contract amount in full rather than to a share of the overall project.
A.R.S. §§ 32-1102(5), (6), (7), 42-5075(S)(3), (S)(10)