All Tennessee contractors license applications will be approved and administered by the Tennessee Department of Commerce and Insurance Board for Licensing Contractors. However, just because all licenses are handled through the same board, that does not mean that all licenses are the same — or have the same application process. Determining which general contractors license to apply for in Tennessee involves monetary limits on projects, license definitions and categories, Tennessee contractors exams, state requirements, and fees. In some cases, being a resident of a particular county in Tennessee may determine which contractor license you’ll need to obtain.
Another consideration you will have to regard when getting your Tennessee general contractors license is establishing and registering a business structure for your general contracting company, and whether you need to register with the Tennessee Secretary of State. Subsequently, you will have to operate in accordance with all Tennessee business requirements. Tennessee offers many different types of contractors licenses, and you will have to do your research on which one is right for you and your business.
Tennessee General Contractor License Requirements
The Tennessee Department of Commerce and Insurance Board for Licensing Contractors requires an individual to obtain a contractors license before negotiating or bidding on a project that is $25,000 or more. Additionally, there are circumstances where you need to be licensed for projects under $25,000. No matter what contractor license you are applying for in Tennessee, you will need to:
- Disclose your business structure — Corporations, LLCs, and Limited/General Partnerships must register with the Tennessee Secretary of State.
- Pass the Tennessee Business and Law exam. A trade exam may also be necessary, depending on the classification of license you are applying for.
- Appoint a qualifying agent. The QA must pass the exam(s) and may be the owner or full-time employee.
- Specify the classification of the license you are applying for.
- Provide a financial statement.
- Verify proof of general liability and workers’ compensation insurance.
- Pay all licensing and application fees.
- Submit before deadline (the 20th of each month).
These requirements set forth by the Tennessee contractors licensing board relate to almost any other state’s requirements. The difference between Tennessee and other states is how they divide up and classify different types of contractor work and the licenses required to perform that work.
Who Needs a Contractors License in Tennessee?
Naturally, the full span of general contracting work may fall under several categories defined by some states. Your Tennessee contractors license application package will also ask you to indicate what category of license(s) you are applying for. It may even be the case that nothing more than where you live plus the cost of your project will determine what type of general contractor license you will need to apply for in Tennessee.
For instance, a general contractor looking to get a contractors license in Nashville/Davidson County, TN will need a Home Improvement license for any projects under $25,000. However, if the project is over $25,000, a contractor may have to apply for and acquire an alternative license. Below are some definitions of licenses that a general contractor might need to obtain in Tennessee:
For projects under $25,000:
Home Improvement Contractor: For performing repairs, improvements, or additions during residential and remodeling projects between $3,000 and $24,999. This license does not allow you to perform plumbing, electrical, or HVAC work. Contractors in the following cities and counties may be required to obtain a home improvement license within the above monetary limits:
- Nashville/Davidson County
- Knoxville/Knox County
- Memphis/Shelby County
- Chattanooga/Hamilton County
- Cleveland/Bradley County
- Brownsville/Haywood County
- Murfreesboro/Rutherford County
- Jasper/Marion County
- Springfield/Robertson County
Limited Licensed Electrical (LLE): For projects under $25,000 in certain counties that do not perform electrical inspections.
Limited Licensed Plumber (LLP): For projects under $25,000 in certain counties that do not perform plumbing inspections.
For projects over $25,000:
To bid on or perform any contracting work over $25,000, you will have to apply for the following licensure levels — no matter where you live in Tennessee:
Prime (General) Contractor: For bidding or contracting directly with the “owner” of a project that falls within the Tennessee definition of contracting.
Subcontractor: For contractors working directly with the prime or general contractor — who is also not the owner — while performing specialty trade work such as electrical, mechanical, plumbing, HVAC, roofing, and masonry projects.
Construction Management: A construction management license is needed when the total value of a project is $25,000 or more.
Whether you are a prime/general contractor, subcontractor, or a construction management contractor, you will still need to specify the type of work you will be doing. According to the state of Tennessee, you will apply for a license under the following categories:
Tennessee Building Construction Classifications
Within these classifications are even more detailed definitions of contracting work that will determine which license you will apply for:
- (BC) – This is the all-encompassing category for Tennessee contractors. This classification is going to cover all of the 34 building categories such as masonry, landscaping, drywall, carpentry, etc. This classification allows you to bid on any project.
- Residential (BC-A) – This classification is for the building, repairing, remodeling, or improvements of residential properties. Tennessee only considers anything 3 stories or less to be residential.
- Limited Residential (BC-A/r) – This classification, just like the normal Residential, allows you to bid and work on the construction, repairing, remodeling, and improvement on residential property. The difference is, you can only work on one single family home & the project monetary limit cannot exceed $125,000.
- Commercial (BC-B) – The main purpose of this classification is for repair, construction, alteration, or demolition of buildings that are in use by the general public, or will be. This classification allows you to perform any of the 34 subcategories for commercial, as well.
- Small Commercial (BC-b(sm) – This is the same as the one above, except for one difference. With this license classification, you cannot work on a project that costs you more than $750,000.
- Industrial (BC-C) – This License classification is going to allow for repair, construction, remodel, etc. of Industrial type buildings. A power plant for example, would be something that someone with this classification could build or work on.
For a comprehensive understanding of all categories and the licenses that fall under them, as well as the associated exams required, visit the Tennessee Board for Licensing Contractors Classification Outline with Trade Exam Requirements index.
Licensing and Registration Fee Summary
A two-year contractors license in Tennessee will cost a nonrefundable $250 fee, with a $200 renewal license. Payment can be made by personal or cashier’s check, but not cash or credit cards. Your fee will be attached to your application and submitted to:
Tennessee Board for Licensing Contractors
500 James Robertson Parkway
Nashville, TN 37243
Tennessee Contractors License Exam
All applicants are required to take the Tennessee Business and Law exam. Additionally, and depending on the license you are applying for, you likely will have to take a trade exam as well. Exams will be administered through PSI Testing and exam information such as registration and scheduling, testing site locations, topics covered, and accepted materials can be found at the Tennessee Contractors Candidate Information Bulletin. Generally, your exams will cost:
- Tennessee Business and Law Exam – $55
- Trade Exam – $55
- Total Cost – $110
Tennessee State Business Licenses and Registration
Registering your business entity will be done through the Tennessee Secretary of State. As stated above, any corporation, LLC, or Limited/General Partnership must register. However, any business that operates in Tennessee will need to register for tax identification numbers.
Tennessee Tax Identification Numbers and Registration
Businesses that operate within Tennessee are required to register for one or more tax-specific identification numbers, licenses or permits, including income tax withholding, sales and use tax (seller’s permit), and unemployment insurance tax. Contact the Tennessee Department of Revenue for more information about business registration and your tax obligations.
Tennessee Workers’ Compensation Insurance Requirements and Forms
Businesses with employees are required to carry Workers’ Compensation Insurance coverage through a commercial carrier, on a self-insured basis, or through the Tennessee Bureau of Workers’ Compensation, operating under the Tennessee Department of Labor and Workforce Development.
Tennessee Contractor License Search and Verification
To look up and verify a contractor by company or personal name, license number, or city, refer to the Tennessee Department of Commerce and Insurance license search and verification database.