Tennessee contractor license requirements

Licenses and registrations

Contractor license (Residential BC-A, and other building classifications)

Prime contractors who bid, offer or negotiate a price on a project, and construction managers on projects of that size. Residential builders and remodelers use the Residential (BC-A) classification.

• When it applies: Total project cost of $25,000 or more.
• Good to know: A license is needed before bidding or negotiating a price. Each license has a monetary limit set from the financial statement. Other classifications include BC-B (commercial), BC-C (industrial), CE (electrical), CMC (mechanical), CMC-A (plumbing), CMC-C (HVAC) and LMC (masonry).

Restricted Residential Limited License (BC-A/r)

Residential contractors working on smaller projects who take a community college or vocational school limited license course instead of the trade and Business & Law exams.

• When it applies: Residential work costing less than $125,000.
• Good to know: No 10% tolerance on the limit. Joint ventures are not allowed. Going above $125,000 requires the exams and a reviewed financial statement.

Subcontractor license (electrical, mechanical, plumbing, HVAC, roofing, masonry)

Subcontractors who contract with another contractor rather than the owner.

• When it applies: Electrical, mechanical, plumbing, HVAC or roofing work of $25,000 or more (materials, equipment and labor). Masonry when the masonry portion is $100,000 or more.

Home Improvement (HI) license

Residential remodeling contractors in counties that have adopted the home improvement law: Bradley, Davidson, Hamilton, Haywood, Knox, Marion, Robertson, Rutherford and Shelby.

• When it applies: Residential remodeling projects from $3,000 to less than $25,000 (total cost including materials and labor).
• Good to know: Requires a $10,000 surety bond (or cash/property bond or irrevocable letter of credit), general liability and workers' compensation insurance. Applications are approved by the Board.

What you need to qualify

• Exams: All contractor applicants must pass the open-book Tennessee Business and Law exam (except BC-A/r). Some classifications also need a trade exam. Since July 1, 2026, exams are given by Prov. A qualifying agent takes the exam for the company.
• Experience: Monetary limit depends on financial strength plus required experience. Home improvement applicants must show experience doing remodeling work.
• Insurance: Proof of general liability insurance (amount based on the monetary limit) and workers' compensation insurance unless exempt. Home improvement licensees also need general liability and workers' compensation.
• Bond: Home improvement license: $10,000 surety bond, or cash/property bond or irrevocable letter of credit. Contractor license: starting July 1, 2026, a contractors' surety bond of at least 50% of the requested monetary limit can replace the CPA financial statement.
• Financial: Contractor license applicants submit a CPA- or LPA-prepared financial statement less than 12 months old: reviewed for limits of $3,000,000 or less, audited for limits over $3,000,000. The monetary limit is 10 times the lesser of working capital or net worth. An unlimited limit requires $300,000 in both working capital and net worth.
• Business registration: Corporations, LLCs and limited partnerships must register with the Tennessee Secretary of State. A business tax license from the Department of Revenue is needed for each city or county where you operate.
• Also required: A letter of reference (not from family) and a notarized Contractor's Affidavit are required. Board meets every other month, so plan ahead.

Fees, renewal and continuing education

• Fees: Contractor license initial application $250. Home improvement license initial application $250. CMC/CMC-A pre-approval request $50. An older Board page lists exam fees of $55 each. Limited Licensed Electrician application $50.
• Renewal: Contractor licenses are issued for two years.

Contracts and homeowner protections

Home improvement licenses apply only in the nine adopting counties. For roofing work paid by insurance, contracts must include a 3-day right to cancel, the contractor's address, phone number, license number and email, and a detailed description of repairs (Public Chapter 821, effective July 1, 2012).

Electrical, plumbing and HVAC work

The Board for Licensing Contractors licenses electrical (CE), mechanical (CMC), plumbing (CMC-A) and HVAC (CMC-C) contractors on projects of $25,000 or more. For jobs under $25,000, the Board issues Limited Licensed Electrician (LLE) and Limited Licensed Plumber (LLP) licenses; the LLE applies where the state Division of Fire Prevention handles permits or inspections. Some cities have their own electrical and plumbing licensing.

City and county rules

A business tax license is required in each city or county where you operate. The home improvement license is county-based. Some cities and counties have their own trade licensing, so check locally.

Working without a license

Contracting without a required license is a Class A misdemeanor and is also subject to civil penalties. An unlicensed contractor may only recover actual documented expenses, can be removed from or barred from the project, and can be denied a license for six months. Unlicensed home improvement work is also a Class A misdemeanor, with each violation a separate offense.

What to confirm with the state

We couldn't confirm these on an official page when we checked. Ask the licensing office before you rely on them:

• Continuing education requirements (none found on Board pages).
• Home improvement license exam requirement and renewal period.
• General liability insurance minimum amounts.
• Dollar amounts of civil penalties (Rule 0680-1-.19).
• Written contract requirements for home improvement work in general (beyond insurance-paid roofing).
• Current exam fee under the new exam vendor (Prov).

Sources

1. Contractors & Home Improvement (Board for Licensing Contractors)
2. Get a Contractor License
3. How to Become a Licensed Contractor
4. Home Improvement (regboards/hi)
5. Get a Home Improvement License
6. Types of Licenses
7. Limited Licensed Electrician (LLE)
8. Violation of Law Penalties
9. T.C.A. 62-6-512 Criminal penalty (home improvement)