NOTICE! A Tennessee contractor's license is required BEFORE bidding or offering a price, for projects $25,000 and up (includes materials and labor), as a prime (general) contractor; and also subcontractors performing electrical, mechanical, plumbing, HVAC, roofing and masonry are also required to be licensed as a contractor, when the total portion on the project is $25,000 or more; masonry, when $100,000 or more. In addition, a sub to a sub would need to be licensed whenever there are more than one (1) subcontractors on the project. Reciprocal agreements do NOT allow using another state's license in Tennessee, but provides a trade exam waiver, only. License issuance takes 4 to 6 weeks and must be approved by the Board during regularly scheduled meetings (see Public Meeting Calendar for meeting dates).
A Contractor's license is required prior to contracting (bidding, offering to engage, or negotiating a price) for projects $25,000 or more, when acting as one of the following:
*Masonry subcontractors must be licensed as a contractor when the project is $100,000 or more.
**Roofing subcontractors must be licensed as a contractor, effective January 1, 2014, in addition to performing work currently as a prime, for projects $25,000 or more.
The definition of contractor is found in the statute at T.C.A. § 62-6-102 and covers a very broad area, which includes construction, installation, movement, repair, etc.
All contractors licenses are assigned a monetary limit and also a classification, such as: Building (Residential, Commercial and Industrial); Electrical; Mechanical (Plumbing and HVAC); Heavy Construction; Highway, Railroad & Airport; Masonry; Municipal Utility; Environmental; and Specialties (landscaping, excavation, roofing, cell towers, solar panels, audio visual, etc.,). Contractor's must bid/contract in the exact name as licensed. See more information below in the "Summary of Contractor License Requirements". See the Law and Rules for legislative updates.
The following provides a resource of information for applying for a Tennessee contractor's license. A good start is by reviewing and printing the application package, as listed below:
Click on the following links to review the step-by-step process or you may simply print the application form above:
Hardship (Emergency) License - Request for Eary Review
The Hardship criteria allows a license to be reviewed and approved prior to the Board meeting. However, the hardship must apply to the "owner" of the project; not to the contractor applying for the license. It may also be issued whenever it is in the best interest of the public's safety and welfare. Allow two (2) business days for overnight/express mail to reach our office (delivered to the Cashier's Office first). We recommend to scan and email a copy of the application as indicated in the instructions on the form; then mail the originals with fee. This will help to expedite hardship requests needing immediate attention. All instructions are outlined in the Hardship application request form. Hardships approved prior to the Board meeting are posted on our website.
Note: If there is a law violation or history of complaints, or convictions, the hardship is denied and the applicant will be scheduled for an interview with the Board.
Business Information in Tennessee:
Smart Guide for Starting a Business: http://www.state.tn.us/ecd/pdf/Older_PDFs/SGB_smart_guide_2010.pdf
Workers' Compensation Requirements:
Workers’ Compensation Exemption for Owner(s) of Business (Employer):
(Exemption registration information as a “Construction Services Provider”)
Internal Revenue Service: https://sa1.www4.irs.gov/modiein/individual/index.jsp
(Federal Employee ID Number / EIN / FEIN)
Employee vs Independent Contractor - Definition:
Other State Agencies
Other License Requirements from Tennessee State Agencies
Our Board also regulates other licenses for projects less than $25,000 (Home Improvement; Limited Licensed Electricians; and Limited Licensed Plumbers). This information is also provided on our website.
Our Department of Commerce and Insurance regulates other licensing, such as: Alarm Systems Contractors; Fire Sprinkler Contractors; Home Inspectors; Architects; etc., and their contact information is available at: http://www.tn.gov/regboards/
Local Government Licenses, Permits and Inspections
Always contact the local county/city permit offices for their license and permit for inspection requirements. Contact information for all municipalities is available at: Local Government City and County Information The Division of Fire Prevention inspects many areas and their information is at: http://www.tn.gov/fire/index.shtml The law requires the contractor performing the work to obtain the permit
Classification - Types of Contractors
A contractor must contract for projects in which they are properly classified. Their classification must cover 60% of the total project in order to bid, unless they have a commercial classification, and then they may bid, but would be required to subcontract to a properly licensed contractor for the portions over $25,000. See TCA 62-6-111. The license process entails all contractor applications to pass the Tennessee "Business and Law" exam; and also a trade exam may be required for some classifications (see "Contractor Classifications Outline") A complete list of the exams, registration information and study materials are available by reviewing the “Candidate Information Bulletin” of the exam vendor, PSI).
Every contractor's license is assigned a monetary limit for the amount in which a contractor may bid or contract (total cost of the project, including materials, labor, profit, etc.). This amount is approved by the Board based upon the financial statement of a contractor, as well as their experience. Projects cannot be split into phases to circumvent the monetary limit law by having multiple contracts. A tolerance of 10% is allowed pursuant Rule 0680-1-.13 and anything more is considered a violation of the law. In addition, pursuant Public Chapter 469, a contractor exceeding the monetary limit on their license does not have the right to secure a lien. All contractors bidding to any contractor as a subcontractor, if they are performing electrical, mechanical, plumbing, HVAC, roofing or masonry, they are required to be licensed and must have a monetary limit to cover the entire portion of their work, including the cost of labor and equipment; as the prime contractor cannot delete the cost of materials, labor and equipment for these portions of the work which may be considered circumventing the license law. See Rule 0680-01--13.
Owner/Name on the License
The license is obtained in the name of the entity providing the financial statement as the owner. Therefore, it may be a sole proprietor, corporation, partnership, or LLC. In many cases, the license does not necessarily belong to the qualifying agent (person taking the exam) unless they are also the owner providing the financial statement, insurance, etc. The contractor must bid and contract in the exact name as well as in the mode of operation as licensed (see Rule 0681-01-25). For example, if the license is issued to "John A. Doe" licensed as a sole proprietorship, they cannot contract as "Doe's Contracting, Inc." which is registered as a corporation. Contractors registering with an assumed name with the Tennessee Secretary of State will need to include this name to be on the license in order to operate in the name, such as "Doing Business As" (DBA). See Rule 0680-01-.25 which requires operating in the exact name as licensed.
The definition of contracting in T.C.A. 62-6-102(2), states in part:
Prime Contractors - Prime contractors are those contracting directly with the owner and not to a contractor. Types of prime contractors include the following: Building (Residential, Commercial, Industrial); Electrical (including Low Voltage, Computer Cabling, Audio Visual; Alarm (see also "Alarm Systems Board"); Mechanical - Plumbing, HVAC (including geothermal well drillers who must also be licensed by TDEC); Fire Sprinklers; Heavy Construction (including Storm Damage Cleanup; Landfills; Clearing; Demolition; Crane Rigging, etc.) *Highway, Railroad & Airport (Base and Paving; Bridges; Grading, Drainage, Clearing Right of Way; Painting; etc., also see TDOT); Municipal Utility (including underground Piping; Water Lines; Gas Lines, etc.) Environmental (Asbestos; Lead; Underground Storage Tanks; etc.); Masonry (includes Bricks, Stone, Blocks bound by mortar, etc.); Specialties (Equipment Installation; Cell Towers; Playground Equipment Installation; Solar Panel Installations; etc.); and over 34 Building Subcategories: Landscaping; Roofing; Excavation; Painting; Demolition; Masonry; Flooring; Institutional Equipment, etc. See compiled list of license classifications for more types of contractors. Rules for classifications are published under Rule 0680-01-.16. For those acting as "Design/Build" contractors, make sure you also comply with the license laws of the Architects and Engineers.
Subcontractors - Contractors bidding to another contractor (not to the owner) are considered subcontractors. The law requires only the following types of subcontractors to be licensed as a contractor: Electrical, Plumbing, Mechanical, HVAC and *Roofing whenever the total cost of the project for each of these portions is $25,000 or more; Masonry subcontractors when the total portion is $100,000 or more. The total cost of each portion includes materials and labor which cannot be provided by another contractor to circumvent the law (see Rule 0680-01-.13). In addition, a sub to a sub, etc., all subcontractors for these portions are required to be licensed as a contractor.
*NEW! Effective January 1, 2014, Roofing Subcontractors must be licensed as a contractor, whenever the roofing portion is $25,000 or more, with a BC-21 (roofing) classification. In addition, contractors licensed with the following classifications would be acceptable to perform roofing: BC (residential commercial and industrial); BC-A (residential roofing); or BC-B (commercial roofing); or BC-C (industrial roofing). Roofing subs are not required to be listed on the outside of the bid envelope, however, all roofing subcontractors must be licensed as a contractor.
Construction Managers of any kind must be licensed as a contractor if the total project exceeds $25,000.
Joint Ventures: All contractors must be licensed to contract as a joint venture and may combine their monetary limit to bid a project. However, they must both have the classification on their license which is incidental and an essential part of the total project. It is advised to always include the license information of all parties on a joint venture; must be in the exact names as licensed. Joint Venture rule is 0680-1-.11 and may be reviewed from the Laws, Rules and Regulations section of the website.
Violations: A contractor who contracts, offers to engage or obtains a permit without a license or proper classification and monetary limit is in violation of T.C.A. §62-6-120. Therefore, would be ineligible to be awarded the project, may not receive a license for six months, cannot participate in any re-bidding of the project, and subject to civil penalties. Bidding requirements entail listing the license name, number, expiration date and the classification pertaining to bid, on the outside of the bid envelope for the prime and specified subcontractors. (Refer to T.C.A. §62-6-119.)
Public Information - Files with the Board are considered public information, with the exception of the "Financial Statement" and it is considered confidential by law T.C.A. 62-6-124. "Social Security" numbers are redacted and not released. License applicants are required to provide their Social Security Number (SSN) to be used for identification purposes, only, and will not be a part of public record. This is under the authority of 42 U.S.C. 666.
Bidding: See bidding information at "Other Valuable Resources"
Unlicensed Activity: Unlicensed contractors do not have lien rights and limited to recovery of documented expenses in court.
Criminal Prosecution: Contractors who take money and do not complete the project may be arrested and convicted for felony theft. See "Consumer Resources" for more information.
Exam Prepartion Schools: A school providing exam prep courses must be licensed with our Board as a Pre-Licensing Contractor Exam Provider before offering prep courses online or workshops.
Limited Restricted Residential ("BC-A/r" Contractor License Classification)
Contractors may apply for a Limited License with a BC-A/r classification, which restricts residential contractors to building in the amount of *$70,000 or less. In lieu of the exams, they may attend a course at a community college. All other application requirements must be fulfilled, including a personal board interview. *See proposed rules of July 31, 2013 for increasing this limit up to $125,000. Check the website or sign-up for email notifications for effective date of new rules. More information is also available at "BC-A/r" on the Forms and Applications section of the web.
LICENSEE - GENERAL INFORMATION
Once a contractor has been granted a license, it is issued for two (2) years and they are required to renew 30 days prior to the expiration date. In additon, they may need changes or license revisions. There are law requirements they must follow when operating in Tennessee.
Contractor's who currently hold a Tennessee contractor's license and need another license, due to having one of the following: Having an additional business/subsidiary; change in ownership; merger; or reorganization, they would need to complete the new license application and follow all steps (the exams would not need to be retaken If the Qualifying Agent (QA) is a majority owner of the new entity or remains a full time employee with only one licensed entity).
The law requires a contractor's license application to be completed for the following pursuant TCA 62-6-111:
(1) Contractor applying for new license;
(2) When obtaining a second or additional license (when having more than one business entity);
(3) Reinstatement of an expired license (over 12 months, cannot renew);
(4) Change in ownership (partnership dissolved, new in-coming stockholders, etc.); and
(5) Reorganization of the licensed entity
If there has been no change in ownership and requesting only a name change or mode of operation change, see the "Revision" section of the "Forms and Downloads" for instructions on obtaining an amended license.
Contractor's failing to complete the license renewal within 12 months of the expiration date, would need to complete the new license application. All steps must be followed with the exception of the exams; not required to be retaken if remained active in the industry for the past two (2) years.
Summary of Reinstatement Instructions
To reinstate a contractor’s license expired more than 12 months, a contractor must: complete the “Contractor’s License Application”; select “Reinstatement” on page one (1); and list the license ID# of the expired license. When reinstating a contractor’s license, you may apply for this new reinstated license with a name change, change in mode of operation, license limit or classification. All the steps to reinstating a contractor’s license are the same as obtaining a new license, with the exception of the exams. The license does not have to be reinstated the same as it was prior to expiring. May apply in a new name, mode of operation, different monetary limit or classifications. However, the license ID number will remain the same as the expired license. Do not use the license until approved. May check status of pending application from the “License Search” at our website: http://verify.tn.gov/ after the Board meeting.
Note: It is up to the Board to determine whether the exam would need to be retaken on waiver requests and they would make this decision upon reviewing the complete application at the Board meeting; staff cannot make this determination. If there is a history of complaints, judgments, convictions, etc., you may be required to appear for an interview.
Licenses are issued for two (2) years and renewals are mailed out 90 days prior to expiration date; renewal is due 30 days prior to expiration to prevent contracting unlicensed which is a violation; there is not a grace period. Contractors working on an expired license may not be entitled to recover monies owed on a project or have lien rights. If you do not receive a renewal in the mail, you may download from our website. Online renewal is now available, however, contractors are required to submit proof of insurance (general liability and workers' compensation), and a financial statement to support their current monetary limit. These documents must be sent separately to the Board whenever renewing online. The financial statement may be prepared by the contractor, and does not have to be prepared by a CPA as long as their limit is $1,500,000 or less. For those with a limit in excess of $1,500,000, a "Reviewed" CPA financial statement is acceptable for renewal in lieu of an "Audit" for any limit, including Unlimited. To check the status of your renewed license, you may login at the "Verify a License". The Board's renewal section may be contacted by email at: Contractor.Renewal@tn.gov
Renewal Resource for Contractors
Most Common Reasons for Delay of Renewal
RETIREMENT (Temporary Inactive Status)
Contractors who are not currently working, may place the license in "Retirement" in lieu of renewing, to retain renewal rights (renewal rights expire after 12 months). Retirement may be on an annual basis; biennial basis; retired with a maxium of seven (7) consecutive years; or as long as the license has an active status, it may be retired anytime by providing the $25.00 retirement fee for each year.
Contractors may take the license out of retirement any time by completing the renewal. If bringing a contractor's license out of retirement during the second year of the renewal cycle, the law does not provide a means to waive one year of the renewal fee. For example, a license with an expiration date of 3/31/2012 (2012 Renewal) was retired on March 1, 2012 for two years with a retired expiration date of 3/31/2014, then if the license is reactivated on June 1, 2013, the contractor would be required to pay the 2012 renewal fees ($200) when bringing out of retirement and the license expiration date would remain the same as 3/31/2014 (after renewing the 2012 renewal).
Revisions to change the name on the license, mode of operation, increase the monetary limit or add a classification may be requested by completing revision forms from the "Forms and Download " of the website, which includes all instructions. Out of state contractors should make sure their workers' compensation insurance is covered in Tennessee. To verify, check with the Department of Labor at: https://www.ewccv.com/cvs/
**Note: Do not contract until the license "Revision" or new license has been approved**
The following are other licenses issued by our office and most do not require Board approval. Issuance takes usually less than a few weeks.
Home Improvement- This license is required in the following counties: Bradley, Davidson, Hamilton, Haywood, Knox, Marion, Robertson, Rutherford and Shelby, for remodeling projects from $3,000 to less than $25,000. For more information, contact the Home Improvement section at (615) 532-3994 or 1-800-544-7693, or review information on Remodeling. (Note: An entity with a "Contractor's" license with a residential classification (BC-A) or commercial (BC or BC-B) is exempt from obtaining an additional license as a Home Improvement contractor.)
Limited Licensed Electrician (LLE) license is required in counties who do not perform their own inspections and licensing for electrical wiring projects less than $25,000. Contact our LLE licensing section at 1-800-544-7693 or (615) 253-2144, or download application. (Note: An entity with a "Contractor's" license, with an electrical classification (CE or E) is exempt from obtaining an additional license as a LLE.)
Limited Licensed Plumber (LLP) license is required for projects less than $25,000 (as of January 1, 2006). Must also obtain local permits and adhere to their licensing requirements, such as exams and fees. Contact our LLP licensing section at 1-800-544-7693. (Note: An entity with a "Contractor's" license, with a plumbing classification (CMC or CMC-A) is exempt from obtaining an additional license as a LLP.)
HVAC - Check with your local codes office. There is not a specific license for HVAC projects, less than $25,000, with our Board. Projects $25,000 or more must obtain a contractor's license with the CMC or CMC-C classification, as a prime or subcontractor. If operating in a county requiring a Home Improvement license, check to see if a trade specific license is also required or HVAC less than $25,000.
Schools as a Pre-Licensing Contractor Exam Provider must be licensed as an approved provider by the Contractors Board, before offering prep courses online or workshops.
Applicants are not required to take an exam prep class. The contractor exams are only offered by PSI.
FEIN (Federal Employement Identification Number)
FAQs - Frequently Asked Questions [pdf]
Hardship Requests [pdf]
>>See also "Workers' Compensation" Resource
Reciprocation (Trade Exam Waiver Agreement with States) [pdf]
Revenue (Business Tax License)
Secretary of State (Corporation, LLC, Partnership Registration)
Valuable Resources (Industry Links, Laws, and General Information)
Workers' Compensation Insurance (See also "Insurance" Resource)
Exemptions from the contractor's license requirement is outlined in the laws, rules and regulations, and applies to individual use, non-profit organizations, Department of Transportation's special let highway projects and federal projects. For example:
To review all exemptions, see T.C.A. § 62-6-102, 103 and Rule 0680-1-.22.
Contractor's - Main website
Notice: The Tennessee Department of Commerce and Insurance is committed to principles of equal access and affirmation action. Contact the EEO or ADA Coordinator at (615) 741-8307.