To become a general contractor in Arizona, multiple licensing and education requirements must be fulfilled, and a completed application (with fees included) must be sent to the Arizona Registrar of Contractors (ROC). These requirements are not optional, and those who engage in contractor work without fulfilling them will be prosecuted to the full extent of Arizona law.
Besides passing the applicable PSI examination by at least 70 percent, and submitting a completed Arizona contractor License Application form to the ROC with a nominal fee, other important requirements must be met. Applicants must name Qualifying Parties and both must submit to a background check. Licenses are only issued to entities legally recognized by the Arizona Corporation Commission, such as sole proprietorships, partnerships, LLCs, etc. Make sure that you check out all of the information below and that you’ve met all of the requirements to become a general contractor in Arizona.
Arizona Contractor License Requirements
It’s important that those wishing to become a general contractor in Arizona understand all of that is required of them. This includes understanding exactly who needs a contractor’s license, minimum exam and experience requirements, and more. See below for these details and more.
Additionally, although surety bonds are required, it is important to note that Arizona law renders many forms of insurance elective; however, there is a strong case for choosing to acquire things like liability insurance. A certificate of insurance can protect you from many forms of risk on a project and may be necessary to secure competitive contracts.
Who Needs a Contractors License?
According to the official Arizona ROC website, “any business which contracts or offers to contract to build, alter, repair, add to, subtract from, improve, move, wreck or demolish any building, highway, road, railroad, excavation or other structure, development or improvement, or to do any part of the work must be a licensed contractor.”
That means that basically, any construction project done in Arizona is going to require a licensed contractor. This includes such activities as erecting scaffolding, connecting utility services lines, or any other mechanical or structural service or improvement.
The ROC makes clear that the term “contractor” also includes subcontractors, floor covering contractors, landscape contractors, and any consultants who claim the ability to supervise or manage a construction project. The state also provides separate licensing for the electrical and plumbing trades.
What Do You Need To Become a Contractor in Arizona?
Getting a contractor’s license in Arizona is a fairly straightforward process. The Arizona ROC has a complete list on their website of the nine things you’ll need to obtain a license:
- Identify a Qualifying Party: A “Qualifying Party” is somebody, regularly employed, with the necessary experience, knowledge, and skills as defined under A.R.S. § 32-1122(E). A Qualifying Party can be a sole proprietorship, one of the partners of a partnership, one of the members of a limited liability company, one of the officers of a corporation or an employee of the contracting business.
- Minimum Exam & Experience: The Arizona ROC License Classification Requirements lists out the minimum experience and types of examinations necessary for specific license classifications. Unless otherwise specified on their website, the Qualifying Party must have four or more years of experience to be eligible for a license, and must pass the Business Management Exam (BME) as well as the Trade Exam (unless eligible for a waiver).
- Acquisition of a Surety Bond: The amount of the bond will depend on your license classification and approximated annual gross volume. It will be your responsibility to seek out an appropriate bonding company.
- Passing the PSI Exams: As stated above, the Qualifying Party must pass the BME as well as the Trade Exam with a score of 70 percent of higher. The Qualifying Party can register at any time to take these exams through PSI’s online portal. More information on the BME and Trade Exam below.
- Background Check: Both the Applicant and the Qualifying Party must complete a criminal background check via the ROC’s online Licensing Background Check page.
- Form a Legal Business Entity: Licenses at the state level are only issued to legal entities recognized by the Arizona Corporation Commission. This includes registered sole proprietorships, partnerships, limited liability companies, and corporations. The AZCC provides resources for those starting a business, which can be found here.
- Proof of License Bond: The applicant must file a Contractor’s Bond in the appropriate amount. This amount varies depending on license type and completed gross volume. This can be a surety bond or a cash bond, and you may also provide a bond in the form of cash or a certificate of deposit from any bank which operates in Arizona. More bond information can be found here.
- Pay Applicable Fees: License fees cover a two year time period. The amount is dependent on the license classification and can cost anywhere between $580.00 and $1,050.00. More information on license fees can be found here.
- Government-Issued ID: Both the Applicant and the Qualifying Party both will need to submit a copy of their government-issued ID. The ROC website states that acceptable forms of ID include a valid driver’s license or passport.
- Completed License Application: The License Application Form can be found here. Send completed applications by mail to:Registrar of Contractors
P.O. Box 6748
Phoenix, AZ 85005-6748Or deliver completed applications to:1700 W. Washington Street
Phoenix, AZ 85007-2812
On top of these listed requirements, in the State of Arizona, you are also required by the Arizona Industrial Commission to obtain workers’ compensation insurance for employees, assuming that you have any. Per Arizona law, workers’ compensation must cover at least two-thirds of the employee’s average monthly salary.
Licensing and Registration Fees
The following fees are required to be submitted with the license application, based on the classification of the license sought. Refer to the license fees table below:
|NEW LICENSE APPLICATION|
|CLASSIFICATION||APPLICATION FEE||LICENSE FEE||RECOVERY FUND ASSESSMENT*||TOTAL**|
|General Commercial (A,B)||$200||$580||$0||$780|
|Specialty Commercial (C)||$100||$480||$0||$580|
|General Residential (B)||$180||$320||$370||$870|
|Specialty Residential (R)||$80||$270||$370||$720|
|General Dual (KA,KB,KE,KO)||$200||$480||$370||$1,050|
|Specialty Dual (CR)||$100||$380||$370||$850|
Most general contractors will fall under “General Commercial (A,B)”, however, all license classifications can be found on the license classification requirements page.
Arizona Contractors Exam
PSI Exams will administer both the business management exam and the specific trade exam to the Qualifying Party in question, unless the Qualifying P
arty is eligible for a waiver (in the case of the trade specific exam). Most general contractors will either be completing the trade-specific:
alongside the mandatory:
- AZ BME Business Management exam.
In either case:
- The trade-specific exam will take up to 240 minutes
- While the BME will take 180 minutes
- These exams must be passed with a score of 70 percent or higher
- You can take these exams via computer
- These exams are open-book
- If you must reschedule, do so 2 days in advance before 5:00 PM Pacific Standard Time
- If you must cancel, do 2 days in advance before 5:00 PM Pacific Standard Time.
- Schedule 1 day in advance before 4:00 PM Pacific Standard Time.
You can register to take these courses via the online portal provided by PSI. Test locations are as follows:
Northern Arizona University
Du Bois Building 64, Room 140
306 E. Pine Knoll Drive
Flagstaff, AZ 86011
Glendale-Arizona Flight Training Center – Glendale Airport
6799 N Glen Harbor Blvd
Glendale, AZ 85307
PHOENIX – MIDTOWN
5727 N. 7th Street, Suite 301
Phoenix, AZ 85014
Discovery Detective Academy
15230 N 75th St. Suite 1005
Scottsdale, AZ 85260
Mill Avenue Business Center
40 W. Baseline Road, Suite 221
Tempe, AZ 85283
2601 N. Campbell Avenue, Suite 201-3
Tucson, AZ 85719
Yuma – Arizona Western College
2020 SE Avenue 8E
Yuma, AZ 85365
You are also able to take this exam from another location by filling out and faxing the Out-of-State Test Request Form. This form, along with more information on the ROC-required exams, plus links to trade-specific content outlines, can be found on the AZ ROC/PSI Candidate Information Bulletin.
Contractors Exam Fees
Exam fees are as follows:
- $56.00 — one portion (Either trade-specific exam, or BME)
- $106.00 — two portions
In the event that you must retake either or both of these exams, the fees remain the same.
Arizona Contractors License Application
The License Application can be found on the Arizona ROC License Application & Candidate Information Bulletin page. The essential parts of the Arizona License Application Packet are as follows:
- PSI Examination Results/Waiver: You must provide the Qualifying Party’s original exam results, or a completed waiver if applicable.
- Background Checks: Every person named on the License Application Form must undergo a background check. Provide proof of such by including copies of the payment transaction receipt from each background check performed. Learn more about AZ background checks here.
- Papers Proving Legal Entity: Provide proof of legal entity from the Arizona Corporation Commission.
- Completed Bond Verification Form: More information on bond amounts and requirements can be found on the AZ ROC’s Bond Information Page.
- Fees: Submit the correct fees based on your license classification.
- Government-Issued ID: Every individual named in Part 3 of the License Application must submit a legible copy of either their driver’s license or passport.
- Signatures: Last, you’ll make sure that the Complete Signatures section of the application is satisfied appropriately.
Other supporting documentation might include:
- Prior License Disclosure Forms: These are used if anybody named on the License Application Form was named on a prior license. Include documentation of any disciplinary resolution, if applicable.
- License Cancellation Forms: Used to cancel a license upon issuance of a new license.
- Felony Disclosure Forms: These are used if anybody named on the License Application Form has ever been charged with or convicted of a felony.
- Unlicensed Activity Disclosure Forms: These are used if anybody named on the License Application Form has been convicted of unlicensed activity. Include documentation of any remedial measures taken.
Either send you completed applications by mail to:
Registrar of Contractors
P.O. Box 6748
Phoenix, AZ 85005-6748
or deliver completed applications to:
1700 W. Washington Street
Phoenix, AZ 85007-2812
Once you have completed and sent in your application, you’ll receive a receipt with a pending number on it, which is used to keep track of your application. Invoke that number when you call the ROC if you have any questions on the status of your application.
Arizona Contractor Registration and Permitting Requirements
On top of the Arizona State license registration and other state-specific requirements, local city and county governments may require additional, specific permits or licenses as well. While you’ll want to check with your local municipality, SBA.gov mentions that the most common licenses and permits you might need include:
- Alarm Permit
- Building Permit
- Business License and/or Tax Permit
- Health Permit
- Occupational Permit
- Signage Permit
- Zoning Permit
It’s your responsibility to check with local city and county governments for additional registration and permitting requirements.
Arizona State Business Licenses and Registration
To be eligible to do business in the State of Arizona, you’ll need to register your business with the State, as well as obtain a federal and State Tax ID number.
Arizona Business Registration
To learn more about registering a sole proprietorship, partnerships, limited liability company, or corporations, visit the Arizona Corporation Commission eCorp website. The AZCC also provides resources for those starting their own business in Arizona, which can be found here.
Arizona Tax Identification Numbers and Registration
In order to do business in the State of Arizona, you’ll need to obtain a Federal Employer ID Number (EIN) / Tax ID Number (TIN) from the IRS. Read their directions carefully and fill out the online application to receive your EIN.
After that, you’ll want to apply for the Arizona Transaction Privilege Tax (TPT), which is commonly referred to as a sales tax. You can apply for a TPT License via the Arizona Department of Revenue’s website.
Arizona Workers’ Compensation Insurance Requirements and Forms
Under Arizona law, it is mandatory for employers to secure workers’ compensation insurance for their employees. More information can be found via The Industrial Commission of Arizona Workers’ Compensation FAQ.
More information on obtaining workers’ compensation coverage can be found here.
Arizona Contractor License Lookup and Verification
Using the AZ ROC Contractor Search, you can find out if a contractor’s ROC license is current, as well as see other information related to the license. You can search by entering their 6-digit license number, full name, city, classification, status, and more.