Valley of the Sun, Phoenix, AZ

A GC in Arizona has a sub that is also working for another GC on a different job.  Since the sub's license is only for smaller work, that sub wants to borrow and use the original GC's license on the other GC's job that the sub is working on.  A few quick questions...

1) Is it okay for the GC to let his sub borrow his license to work on a different job for a different GC?

2) Is the GC allowed to charge the sub a 10% fee, for example, for letting the sub borrow the license? 

3) If so, what are the taxation requirements of that fee arrangement?  Should the original GC charge the sub sales tax on the fee paid from the sub?  

4) How should the GC report that fee income received in their financial statements and tax return?

The long answer: 

Licenses are held by the business entity to which a license is issued (per R4-9-101 of the Arizona Administrative Code). Any legitimate, W-4 employee of that licensed entity is "covered" to perform work within the scope of that license classification (scopes are defined within the Arizona Administrative Code; R4-9-102 through R4-9-105). 

Contracting beyond the scope of a license is grounds for the Registrar to suspend or revoke a license per A.R.S. § 32-1154(A)(16). Additionally, a GC who knowingly allows someone to "borrow" their license as you've described is in violation of A.R.S. § 32-1154(A)(9), which may result in their license being suspended or revoked. 

A GC in Arizona has a sub that is also working for another GC on a different job.  Since the sub's license is only for smaller work, that sub wants to borrow and use the original GC's license on the other GC's job that the sub is working on.  A few quick questions...

1) Is it okay for the GC to let his sub borrow his license to work on a different job for a different GC?

2) Is the GC allowed to charge the sub a 10% fee, for example, for letting the sub borrow the license? 

3) If so, what are the taxation requirements of that fee arrangement?  Should the original GC charge the sub sales tax on the fee paid from the sub?  

4) How should the GC report that fee income received in their financial statements and tax return?