Tennessee contractor license, limits and fees

Tennessee licenses by the size of the job. The Board for Licensing Contractors requires a contractor’s license before you bid, offer, or negotiate a price on a project of $25,000 or more as a prime contractor (anyone contracting directly with the owner), or as a construction manager or consultant on a project of that total value.

Subcontractors are caught by the size of their own portion. Electrical, mechanical, plumbing, HVAC and roofing subs need the license when their part reaches $25,000, materials, equipment and labour included. Masonry subs need it at $100,000. Under the board’s classification outline, subs in the other building sub-categories (framing, drywall, painting and the like) do not need their own license.

For how Tennessee’s line compares with other states, see the requirements by state table, and what happens to a contractor who crosses it unlicensed in unlicensed contractor penalties.

Every Tennessee contractor license carries two things: a classification, which says what kind of work you can bid, and a monetary limit, which says how big one project can be. The limit applies per project or contract. There is no cap on how many projects you run at once, but a job split into phases to slip under the limit still counts as one job.

The board’s own worked example: a $150,000 limit needs $15,000 of both working capital and net worth. A company with $10,000 of working capital and $200,000 of net worth gets a $100,000 limit, because only the smaller number counts. Receivables more than 3 months overdue are taken out of working capital first. To be considered for an unlimited license you show $300,000 of both, plus the required experience.

The limit comes from a financial statement prepared by a licensed, independent CPA or licensed public accountant, in the exact name and form of the business being licensed. Rule 0680-01-.32, in force since November 18, 2025, sets the bar: GAAP basis, on the accountant’s letterhead with their license number, dated no more than 12 months before the application. An out-of-state accountant’s license is filed with it.

• Reviewed statement: limits of $3,000,000 or less.
• Audited statement: limits above $3,000,000.
• Surety bond instead of either, from July 1, 2026: at least 50% of the limit you ask for, on the board’s own bond form.

A thin statement can be topped up. A line of credit on the board’s form adds to working capital, and a guaranty agreement from an owner or parent company backs the statement. The board asks for one when a statement is mostly cash with little equipment, or when receivables make up most of working capital. A bond in the board’s format can replace the guaranty: $500,000, or $1,000,000 for an unlimited limit. Every indemnity expires at renewal.

The classification decides what you may bid. Tennessee draws it from T.C.A. § 62-6-112 and Board Rule 0680-01-.12, and the board publishes the whole tree as a classification outline. The building family is the one most general contractors need:

Any BC classification already covers all 34 building sub-categories. A company that only wants a handful of them, up to five, can hold those without a trade exam, though the business and law exam and experience still apply. The rest of the tree:

Medical gas piping is a specialty that needs board certification rather than an exam. For how classification schemes differ from state to state, see contractor license classifications, explained, and for the choice between a broad and a narrow license, general versus specialty.

Every new contractor applicant passes the Tennessee Business and Law exam. A trade exam is added for the classifications marked above. Since July 1, 2026 the board’s exams are run by Prov; PSI kept administering exams already booked with it through September. Both exams are open-book, and the board treats a pass as typically valid for two years.

The exams are sat by the company’s qualifying agent: an owner, officer or full-time employee (a non-owner signs a power of attorney). One person need not sit both exams, and up to two people may sit each one for the same company. If the qualifying agent leaves, the law gives three months to name a replacement before that classification lapses.

Instead of the exams: a residential builder who will stay under $125,000 can take an approved limited license course at a Tennessee community college or vocational school and hold the BC-A/r license. Every other requirement still applies, and lifting that ceiling means sitting the exams and filing a reviewed statement.

Trade exam waivers: Tennessee does not honour other states’ licenses, but an active license in one of these states can earn a waiver of the trade exam. The other state completes the board’s license verification form. Waivers apply to contractor licenses only, not to home improvement, LLE or LLP. Tennessee also accepts the NASCLA National Commercial exam.

More on how the two halves are built and how people prepare in our contractor license exam guide, and on what reciprocity does and does not waive in the reciprocity guide.

Below the $25,000 line there is a second, local license. A home improvement license is required for residential remodelling jobs from $3,000 to $24,999, but only in the counties that have adopted the law. The board lists 9:

• Bradley
• Davidson
• Hamilton
• Haywood
• Knox
• Marion
• Robertson
• Rutherford
• Shelby

“Home improvement” (T.C.A. § 62-6-501) reaches well past kitchens: repair, replacement, remodelling, alterations and additions to residential land or buildings, including driveways, pools, porches, garages, landscaping, fences, roofing and painting. There is no exam. You file a $10,000 surety bond (or a cash or property bond, or an irrevocable letter of credit), proof of general liability and workers’ compensation, photo ID, Secretary of State registration for an entity, and evidence of remodelling experience.

Unsure whether your small jobs need this or nothing at all? Our handyman versus contractor license comparison walks the line.

The LLE and LLP are licenses for individuals, not companies, issued to people who pass the LLE or LLP trade exam (through Prov). Each covers work under $25,000 per project, and each is required only in a municipality that uses the state Division of Fire Prevention for its permits or inspections. Where the city or county runs its own licensing, its rules govern; check with the local office first. General plumbing maintenance under $500 is exempt from the LLP.

The board cites T.C.A. §§ 62-6-102(d) and 68-102-150 for the LLE and § 62-6-403 for the LLP. Above $25,000, electrical and plumbing work needs a contractor license in the CE or CMC family; see the electrical contractor license guide.

The board’s fee schedule. All fees are non-refundable.

Contractor licenses renew every two years; the board ties continuing education to each “bi-annual renewal”. The renewal opens in your CORE account 90 days before expiry, and the board asks for it at least 30 days ahead. BC-A and BC-A/r holders upload 8 hours of continuing education with each renewal. A contractor license has a 12-month grace period; after that you apply again from scratch. Home improvement, LLE and LLP licenses have 3 months.

Renewal also needs a fresh financial picture: a CPA-compiled statement for a limit above $1,500,000, a self-prepared balance sheet at or below it. Add a certificate of general liability insurance, workers’ compensation or an exemption, and proof of active Secretary of State status for an entity. The general liability minimum rises with the limit (Rule 0680-06-.02):

Price the whole first year, from application to insurance, with the license cost calculator; set your renewal date in the renewal tracker; and see what a policy at each minimum costs in the general liability guide.

The Department of Commerce and Insurance runs one license search for every board it regulates, contractors included. Read the classification and the monetary limit on the record: a licensed contractor bidding a job above their limit plus the 10% tolerance is outside their license. The board also publishes a qualifying agent dashboard that shows which licenses each qualifying agent stands behind.

Every state’s search page is in our license lookup directory, and what a clean record does not tell you is in how to check a contractor license.