How to Get a Contractor License in Tennessee

A license is required before contracting, and that includes bidding, offering to engage or negotiating a price, on projects of $25,000 or more when you act as a prime contractor, as certain subcontractors or as a construction manager or consultant. A prime contractor is anyone who bids or contracts directly with the owner.

Subcontractors working for a contractor rather than the owner need a license for electrical, mechanical, plumbing, HVAC or roofing work when their portion is $25,000 or more, counting materials, equipment and labor. Masonry subcontractors are licensed when the masonry portion reaches $100,000. Construction managers and consultants need a license when the total project is $25,000 or more.

Residential remodeling from $3,000 to $24,999 needs a home improvement license, but only in counties that adopted the law. The board lists Bradley, Davidson, Hamilton, Haywood, Knox, Marion, Robertson, Rutherford and Shelby. The license needs a $10,000 surety bond or other financial security, general liability and workers' compensation coverage, corporate registration if applicable, remodeling experience and a $250 application fee. It involves no exam.

Every contractor applicant takes the Tennessee Business and Law exam, and certain classifications also need a trade exam. The trade exams the board lists include Residential (BC-A), Commercial (BC-B), Industrial (BC-C), the combined BC, Residential/Small Commercial (BC-A,b(sm)) for projects under $750,000, Electrical (CE), HVAC (CMC-C), Fire Sprinkler (CMC-D) and Masonry (LMC). Full Mechanical (CMC) and Plumbing (CMC-A) require board pre-approval, requested by form with a $50 fee.

The exams are taken by the Qualifying Agent, an owner, full-time employee or officer designated to test for the entity; a qualifying agent without ownership needs a power of attorney. The same person does not have to take both exams, and up to two people may take each exam for a company. The board says exam results are typically valid for two years.

Residential contractors working under $125,000, based on a financial statement, can take a shortcut: the Restricted Residential Limited License (BC-A/r). Completing a limited license course at a Tennessee community college or vocational school takes the place of both the BC-A and Business and Law exams, though every other application requirement still applies and the limit carries no 10 percent tolerance.

The law calls for a reviewed or audited financial statement prepared under GAAP by a licensed, independent CPA or LPA, less than 12 months old, in the exact name and mode of operation being licensed. A reviewed statement covers limits of $3,000,000 or less; limits above that need an audit.

Your monetary limit is ten times the lesser of working capital or net worth, plus required experience. The board's example: a $150,000 limit takes $15,000 in both working capital and net worth, and a firm with $10,000 working capital and $200,000 net worth gets $100,000. An unlimited license takes $300,000 in both. The limit applies per project, with a 10 percent tolerance except on BC-A/r.

A line of credit can raise working capital, and a guaranty agreement from an owner or parent company can cover a deficient statement. Since July 1, 2026, a contractors' surety bond equal to at least 50 percent of the requested limit may be filed instead of a CPA statement.

Attach a letter of reference from a past client or employer who can speak to your construction experience, or from a code official who inspected your work; it cannot come from a family member. General liability insurance is required in an amount based on your monetary limit, and workers' compensation is required unless you prove an exemption. The Contractor's Affidavit must be notarized by the qualifying agent, owners, partners, members, main officers and major stockholders, and applicants with complaints, convictions or past unlicensed bids must interview with the board.

Corporations and LLCs submit their charter or articles and proof of Secretary of State registration. You also need a business tax license, through the Department of Revenue, for each city or county where you operate. File the Initial New Contractor Application at core.tn.gov with the $250 fee.

A license from another state does not let you work in Tennessee, but the board has trade exam waiver agreements. It lists Alabama, Arkansas, Louisiana, Mississippi, North Carolina, Ohio, South Carolina and West Virginia, each for specific license types, and it accepts the NASCLA National Commercial exam. A waiver covers only the trade exam, applies only to full contractor licenses, and requires the other state to complete the board's verification form.

Renewal opens in your CORE account within 90 days of expiration, and the board asks for filing at least 30 days before. Contractors get a 12-month grace period with a $20 monthly late fee; after 12 months you reapply as a new applicant. The renewal fee is $200. Renewals over $1.5 million need a CPA-compiled statement, while smaller ones can upload a self-prepared balance sheet, along with a liability insurance certificate and workers' compensation proof.

Under Tenn. Code Ann. 62-6-112(g), residential classifications (BC-A, BC-A/r and BC-A,b(sm)) licensed after January 1, 2009 must show 8 hours of residential continuing education from a board-approved provider at renewal. The board also licenses exam preparation course providers and says applicants who want a prep course must use one of the providers it lists, so check that list before paying for a course.