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Most states require contractors to be licensed, but regulations vary widely across the U.S. This guide covers the basics for Tennessee contractors.
Who needs a Tennessee contractor license?
In Tennessee, contractors are licensing by the state’s Board for Licensing Contractors. Contractors need a license if they are working on a project costing $25,000 or more and if they are acting as:
- Prime contractor
- Subcontractors performing electrical, plumbing, roofing, and HVAC if that portion of the project totals $25,000 or more
- Masonry subcontractors only if�that portion of the project�totals $100,000 or more
- Construction management
Prime contractors contract directly with the project owner, while subcontractors contract with contractors to perform their work. Tennessee licenses contractors by class and gives them a project monetary limit, meaning they cannot bid on a project or projects over their limit. The classifications correspond to the type of work the contractor will be doing and include residential, industrial, and commercial building, demolition, carpentry, mechanical, HVAC, plumbing, etc. The monetary limit is determined on a case-by-case basis based on the Tennessee contractor applicant’s financial statement and experience. Contractors who bid outside their license limit or without proper licensure may have their license held by the Board for up to six months.
How Tennessee Contractors Can Get Licensed Effectively
Tennessee’s Board for Licensing Contractors is a division of the state Department of Commerce & Insurance. They can apply online or the completed application package can be mailed to the Board:
Tennessee Board for Licensing Contractors 500 James Robertson Parkway Nashville, TN 37243-1150
All contractors must pass the Tennessee Business and Law exam and may also be required to pass a Trade exam. They must submit a financial statement with their application, either a review�if applying for a monetary limit of $1,500,000 or less�or an audit�if applying for a monetary limit of more than $1,500,000. The Tennessee contractor application is detailed, and applicants will need to meet varying qualifications and provide different information depending on the type of license they are seeking.
Tennessee contractors’ license applications are reviewed and approved by the Board at their meetings in the months of January, March, May, July, September, and November. Contractors�should be sure to turn in their applications by the 20th of the month prior to the Board meeting. In some instances, the applicant might be required to meet with the Board, and will be informed if the meeting is waived or not.
Contractor licensing in Tennessee is complicated, so communicate with the Board and any lo cal government agencies to ensure you apply for the correct licenses and permits.
Surety bonds for Tennessee contractors
Tennessee contractors’ surety bonds vary depending on their financial statement submitted with their license application, on the type of work they’re doing and where the work is done.
A home improvement contractor�needs a license and a�$10,000 surety bond in the following Tennessee counties:
- Bradley
- Davidson
- Hamilton
- Haywood
- Knox
- Marion
- Robertson
- Rutherford
- Shelby
Shelby County requires various other surety bonds of contractors, including a performance bond. The city of Knoxville requires $10,000 surety bonds of electrical contractors, gas installation and servicemen, and mechanical contractors. Johnson City requires many types of Tennessee contractors to obtain permits and surety bonds.
Due to Tennessee’s complicated licensing procedures, it’s important to contact both the state Board for Licensing Contractors and the appropriate agencies in the cities and counties in which you plan to do business.