How to Get a Contractor License in Arizona

Arizona sorts licenses first by where you work and then by trade. Section 32-1102 lists seven families: general commercial building, general dual licensed, general engineering, general residential, specialty commercial, specialty dual licensed, and specialty residential. Residential work is anything within residential property lines, including swimming pools, while commercial licenses cover work other than residential contracting. A dual license lets one business do both.

Within each family are individual classifications. PSI's outline list for the ROC includes A General Engineering, B General Residential, B-1 General Commercial, B-2 General Small Commercial, B-3 remodeling and repair, dual building licenses such as KB-1 and KB-2, and dozens of specialty codes such as CR-11 Electrical, CR-37 Plumbing (Commercial) and CR-42 Roofing. The ROC's License Classification Requirements form, RC-L-206B, tells you which exams each classification needs.

Every license has a qualifying party, the person who passes the exams and answers to the ROC for the licensee's compliance. Under section 32-1122(E), before a license issues the qualifying party must have at least four years of practical or management trade experience in the type of work applied for, with at least two of those years within the last ten. Accredited college, university or manufacturer training can replace up to two years. The registrar may lower the four-year figure where industry custom shows it is excessive, and skips experience verification for someone who has already qualified a license in the same classification.

A qualifying party may not take other work that conflicts with supervising the licensee. Section 32-1127 allows serving one additional licensee only where the two share at least 25 percent common ownership or one is a 25-percent-owned subsidiary of the other. Licenses cannot go to minors, and anyone named on an application must not have contracted without a license or been on a license suspended or revoked in any state.

Arizona's business-law requirement is the Statutes and Rules Exam (SRE), a computer-based course the ROC builds and maintains, in which you study Arizona contracting statutes and rules and are tested as you go. PSI's bulletin lists its cost as $61, sold online only. It is required of new applicants whose qualifying party has not been the qualifying party on an Arizona license in the last five years.

Most classifications also require a trade exam delivered by PSI, and solar classifications add a separate solar portion. Section 32-1122(F) directs the registrar to waive the exam for a qualifying party who has qualified a license in the same classification within the preceding five years. Exams must be passed not more than two years before you apply, and PSI's bulletin says the application and original score report must reach the ROC within two years of passing.

ContractorPrepHQ offers practice for the PSI trade exams and for Arizona statutes and rules: original questions written from the published outlines and references, a diagnostic, topic drills with explanations, and timed exams with a readiness score. It does not provide the ROC's SRE course itself, which you must still buy and complete through the ROC.

Section 32-1122(B) lists the contents of the verified application: the classification sought; the owner, partners, managers or members, officers and directors, and anyone owning 25 percent or more; the qualifying party; the business and mailing addresses; and, for an LLC or corporation, an attestation that it is in good standing with the Arizona Corporation Commission. You also attest to compliance with workers' compensation law, giving the policy number if you must carry coverage.

The registrar may require fingerprints for a state and FBI background check. After licensure, any change to the application information must be reported to the ROC within 30 days. A person whose license was denied or revoked within the past year, or who was convicted of contracting without a license in the past year, is generally not eligible.

No original license issues without a surety bond or cash deposit under section 32-1152, and the amount depends on license type and expected annual volume. Examples from the statute:

Section 32-1126 caps the combined application and license fee for an original two-year license, and the ROC sets the actual amount at or below the cap. The caps are $500 for general residential, $1,500 for general commercial, $2,000 for general dual, $350 for specialty residential, $1,000 for specialty commercial and $1,350 for specialty dual. Two-year renewal fees are capped between $270 and $1,320 depending on type, and an annual renewal option costs half the biennial fee.

A license not renewed is suspended by operation of law the next business day after its renewal date. You can reactivate within one year by filing the renewal and paying a $50 penalty; after a year you must apply for a new license. A licensee that has held an active license for five straight years, without a transfer of 50 percent or more of ownership and without unremedied violations, may ask the registrar for an exemption from keeping a qualifying party. The renewal statute ties renewal to the application, the fee and a valid bond, so ask the ROC whether anything else applies to your classification.

Section 32-1121(A)(14) exempts casual or minor work on a single project when the total price is under $1,000, labor and materials included. The exemption disappears if the work needs a building permit, if it is part of a larger job or split to stay under $1,000, or if the person advertises without the words "not a licensed contractor." Contracting without a license is a class 1 misdemeanor under section 32-1164, with a minimum fine of $1,000 for a first offense and $2,000 after that.