Full Guide to Getting Your Tennessee Contractors License
To become a contractor in Tennessee you may need to become licensed as one. The state Department of Commerce and Insurance requires contractors to obtain a Tennessee contractors license before they can perform work on contracts that are over $25,000. This includes general contractors and subcontractors, electrical, mechanical, roofing, plumbing contractors and others.
And in some instances, contractors may also be required to obtain a Tennessee contractors license bond.
Do you want to apply for a contractors license? Read on for an overview of the different types of licenses, the licensing requirements and more!
Tennessee contractors license types
General contractors and subcontractors
The Tennessee Code Annotated §62-6 states that contractors of all kinds, excluding home improvement contractors, in Tennessee can work on projects of up to $25,000 without having to obtain a license. Yet, working on projects that are equal to or greater than $25,000 in their value requires that contractors get licensed. Broadly speaking, both general contractors (prime) that contract directly with the owner of a project as well as subcontractors must become licensed on such projects.
For subcontractors this includes:
- Masonry (only need to get licensed on projects that are $100,000 or more)
Subcontractors to subcontractors (so-called 2nd tier contractors) are also required to become bonded on projects over $25,000 when there is more than one subcontractor (1st tier) working on the project.
In addition, the list of Tennessee contractors license classifications determines the kinds of exams applicants must pass to obtain a license. More on the licensing requirements and steps below!
Home improvement contractors
According to the TCA §62-6-516 a Tennessee home improvement contractor license must be obtained by contractors in several counties performing work on residential remodeling projects. This applies to projects that have a cost between $3,000 and $24,999.
The counties that ask for this type of license are:
Under Tennessee law, a home improvement license does not cover plumbing, electrical or HVAC work. The license is required to perform “repair, replace, remodel, alter, conversion, modernization, improvement, or addition to any land or building, such as, driveways, swimming pools, porches, garages, landscaping, fences, fall-out shelters, roofing, painting and other improvements adjacent to the dwelling.”
Tennessee contractors license requirements
Once you’ve identified the license type (within the classification list) that you want to obtain, you are ready to take the steps required to obtain a license. For details concerning the application for a home improvement contractor license and the relevant surety bond, see further below!
There are a total of 8 stages of the licensing process. These are as follows:
- Pass your exam(s)
To be eligible to obtain a license, applicants must pass one or two exams, depending on the type of license they are applying for. All applicants are required to pass the Business and Law exam, while some must also pass a Trade exam. The cost of taking either of these exams is $55.
Information regarding the exams can be obtained through the Candidate Information Bulletin which specifies how applicants can prepare for the exams, how to register, when and how to take them, and more.
You may be able to get a Trade exam waiver (if that exam is required by your license type) if you have a contractor license in:
- North Carolina
- South Carolina
- NASCLA (National Commercial Exam)
- Prepare a financial statement
A monetary limit is assigned to all licenses that are issued. This monetary limit is based on the financial statement that the applicant submits with their application.
This financial statement must be prepared by a certified public accountant (CPA) or a licensed public accountant (LPA), and must be a reviewed or audited statement. No other types of statements are accepted.
A reviewed financial statements is required for license types which have a monetary limit of $1,500,000 or less. An audited financial statements is required for license types which have a monetary limit over $1,500,000.
While most contractors in Tennessee are not required to obtain a surety bond when applying for their license, if a deficiency is present in a contractor’s financial statement, they may be required to obtain a $500,000 or $1,000,000 bond or some other form of indemnity.
- Reference letter and insurance
When applying you need to submit a letter of reference completed by a past client of yours that comments on the quality of your work and experience. You must also submit a general liability insurance based on the monetary limit of your license as well as worker’s compensation insurance.
- Register your corporation, LLC, LP
You must register your corporation, limited liability company or limited partnership with the Tennessee Secretary of State’s Office. Upon applying for your license you must also submit your Charter, Articles of organization or other relevant documents concerning your business.
- Complete your Tennessee contractors license application
Once you’ve fulfilled the above requirements, you will need to complete your license application, including the affidavit which you must sign and notarize.
- Submit your application
You can then proceed with submitting your application to the Tennessee contractors licensing board. Upon submission you will be required to pay a $250 application fee.
To have your application checked and approved as soon as possible, you must submit it before the meeting of the Board which takes place on the 20th of every second month, starting January.
Processing times for applications take about 3 weeks and the whole process of license issuance is between 4-6 weeks.
- Board review and interview
Upon submission and processing of your application a Board interview with a Board member may be required, if the Board has questions regarding your experience or other areas of your application. If your application is complete and includes all required information and documentation, your interview may be waved.
- License issuance
Once your application is approved by the Board your license will be issued and you will be permitted to perform work under it.
Tennessee home improvement contractor license application
The steps to obtaining a home improvement contractor license are fewer and easier to complete than those for the regular contractor license. The application form includes extensive instructions about the steps you need to take when applying for such a license. Remember that the license is required only in a number of counties.
Notably, applicants for a home improvement contractor license are required to submit a $10,000 surety bond along with their application to serve as a financial guarantee.
To those new to surety bonds – the bond amount is not the same as its cost. To find out more about bond cost, visit our surety bond cost page which offers extensive information on the subject!
Get your Tennessee contractors license bond!
Do you need to obtain a contractor license bond for your Tennessee contractor license or home improvement license? Complete your online application and we will soon contact you with a free quote on your bond!
For any questions regarding the bonding process or anything else concerning surety bonds, give us a call at (877)-514-5146! We will be happy to provide you with advice and assistance!