When do I need a contractor’s license?

The Tennessee economy still bustles with growth. New communities crop up, the gentrification of large cities such as Nashville continue and businesses need work. Whatever work your business does, you may need a contractor’s license before placing that bid. 

The Department of Commerce and Insurance for the state lists who must have a license. All general contractors working on projects starting at $25,000 must have a license. The same price threshold applies to all subcontractors from roofing to electrical. While the subcontractor’s project part may not meet the $25,000, the licensing requirements stand if the entire project meets or exceeds that amount. 

Masons must have a license when the project is $100,000 or more. When you bid a project that meets or exceeds these limits, you must have a license in place prior to offering a price. These projects include both labor and materials. 

Keep in mind that the state of Tennessee does not allow you to use a license from another state in lieu of the state licensing requirements. You can have a trade exam waiver if you have a reciprocal agreement but may still need a license. All new license applicants must pass the Tennessee Business and Law exam. 

Expect to wait four to six weeks to have the license issued. The Board meets regularly and must approve the license before issuance. Be sure to include this time frame when seeking projects for your business. 

Each issued license comes with its own classification. When bidding, ensure the classification covers the total project at least 60%. This information is intended only to educate and should not be interpreted as legal advice. 

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