Tennessee Contractor License Requirements
Tennessee doesn’t license contractors into a fixed set of dollar tiers the way many states do — your license’s “monetary limit” is calculated directly from your own financial statement, and it can be whatever your working capital and net worth support. A license is required once a project hits $25,000 (just $100,000 for masonry subcontractors), and the Board for Licensing Contractors is in the middle of two real changes for 2026: a new trade-exam provider and a new bond option that can replace the financial-statement requirement entirely.
- Quick facts
- How the monetary-limit system works
- Steps to get licensed
- Renewal & continuing education
- FAQ
- Penalty for unlicensed contracting
- Reciprocity with other states
Quick facts
| Regulator | Tennessee Board for Licensing Contractors (Dept. of Commerce & Insurance), under Tennessee Code Annotated Title 62, Chapter 6 |
|---|---|
| License threshold | $25,000 or more for a prime contractor, construction manager, or a subcontractor in electrical, mechanical, plumbing, HVAC, or roofing work; $100,000 or more for masonry subcontractors specifically |
| Main classifications | BC-A (residential, 1–4 family units up to 3 stories); BC-A/r (limited residential, capped at $125,000, community-college course can replace the trade exam); BC-b(sm) (small commercial, capped at $1,500,000); BC-B (commercial/public buildings, no stated cap) |
| Monetary limit | Set by your financial statement: 10× the lesser of working capital or net worth, plus required experience (e.g. a $150,000 limit needs $15,000 in both). An unlimited limit needs $300,000 in both, plus required experience. |
| Financial proof | CPA-reviewed statement for limits up to $3,000,000, CPA-audited above that — or, starting July 1, 2026, a surety bond of at least 50% of the requested limit instead of a CPA statement |
| Exam | Tennessee’s open-book “Business and Law” exam (everyone), plus a trade exam for certain classifications; generally valid 2 years. PSI is the provider through September 2026; Prov takes over as the new provider starting July 1, 2026. |
| Fees | $250 initial/reinstatement/ownership-change; $200 renewal; $20/month late-renewal penalty, up to 12 months |
| Renewal | Every 2 years (the Board’s own renewal page calls this a “bi-annual” renewal, which in context means every two years, not twice a year). BC-A and BC-A/r contractors need 8 hours of continuing education per renewal; no CE requirement is listed for other classifications. |
How the monetary-limit system works
Most states this site covers set a flat bond or fee ladder per license tier. Tennessee does something different: your classification (BC-A, BC-B, and so on) sets what kind of work you can take, but how much work you can take on any single project is a separate number — your “monetary limit” — calculated straight from your own finances. The Board takes the lesser of your working capital or net worth and multiplies it by 10, then adds a further amount based on your required experience, to produce your limit. Want a $150,000 limit? You need at least $15,000 in both working capital and net worth. Want no cap at all? You need $300,000 in both. That financial picture normally has to come from a CPA-reviewed statement (or a CPA-audited one, for limits above $3,000,000) that’s less than 12 months old. Starting July 1, 2026, the Board is adding an alternative: instead of a CPA statement, you can post a surety bond worth at least half of the limit you’re requesting.
Steps to get licensed
- Identify your Qualifying Agent — an owner, full-time employee, or officer of the business who will sit for the required exam(s) on the company’s behalf.
- Pass the required exams: the open-book Business and Law exam for everyone, plus a trade exam for classifications that require one (BC-A/r applicants can substitute an approved community-college course for the trade exam instead). Exams are generally valid for 2 years.
- Put together your financial proof: a CPA-reviewed or audited financial statement sized to the monetary limit you want, or (from July 1, 2026) a surety bond worth at least 50% of that limit.
- Gather supporting documents: a Letter of Reference from a past client, employer, or code official (not a family member) speaking to your construction experience; proof of general liability insurance sized to your monetary limit; workers’ compensation coverage or an exemption; and a notarized Contractor’s Affidavit from the Qualifying Agent and the business’s owners/officers.
- Register your entity with the Tennessee Secretary of State and obtain a local business tax license from the Department of Revenue for each city/county where you’ll operate.
- Submit the Initial New Contractor Application online through the Board’s CORE portal with the $250 fee. An in-person Board interview may be required if your application is incomplete or you have prior complaints, convictions, or unlicensed bids on record.
Renewal & continuing education
Contractor licenses renew every 2 years for a $200 fee; a 12-month grace period applies after expiration, at $20/month late, before you have to reapply from scratch. Renewal requires a fresh financial statement (a CPA-compiled statement if your limit is over $1,500,000, a self-prepared balance sheet if under), an updated general liability certificate, and current workers’ compensation proof or exemption registration. BC-A and BC-A/r license holders specifically need 8 hours of continuing education at each renewal, uploaded with the renewal application; the Board’s published materials don’t list a CE requirement for the other classifications.
Does Tennessee require a surety bond for a contractor license?
Not by default — most applicants prove their financial standing with a CPA-reviewed or audited statement instead. Starting July 1, 2026, the Board is adding a bond option (at least 50% of your requested monetary limit) as an alternative to the CPA statement, but it’s optional, not required.
What’s the difference between BC-A, BC-A/r, BC-b(sm), and BC-B?
BC-A covers general residential work on 1–4 family homes up to 3 stories. BC-A/r is a limited residential license capped at a $125,000 monetary limit, where a community-college course can substitute for the trade exam. BC-b(sm) is a small-commercial license capped at $1,500,000. BC-B covers commercial and public buildings with no stated monetary cap, but requires the full exam and a larger financial statement to back it.
How much experience do I need to get a Tennessee contractor license?
The Board’s own published materials describe “required experience” as a component added into your monetary-limit calculation and ask for a Letter of Reference from a past client, employer, or code official, but they don’t state a specific minimum number of years anywhere this site could directly confirm — confirm your own situation directly with the Board before assuming a particular year count applies.
Penalty for unlicensed contracting
Contracting without a required license is a Class A misdemeanor under TCA § 62-6-120, with one notable exemption: the penalty doesn’t apply to someone who hires an unlicensed contractor to build a residence for their own use. Separately, the Board can impose its own civil penalty of up to $5,000 per offense under the same statute. The specific fine/jail-time figures attached to a general Class A misdemeanor in Tennessee, and the Board’s own citation-penalty range, are cross-referenced from multiple independent legal and exam-prep sources only — the Board’s dedicated penalty page returned a 404 this run, so these weren’t confirmed against tn.gov directly; reconfirm before relying on a specific dollar figure. One figure that is confirmed from the statute’s own purpose, independent of the exact fine: under TCA § 62-6-103(b), a contractor who was required to be licensed and wasn’t can’t recover damages in court beyond their actual documented expenses, proven by clear and convincing evidence — a real financial consequence on top of any fine.
Reciprocity with other states
Tennessee doesn’t publish a simple state-by-state reciprocity list. Instead, the Board’s own exam-information page confirms two separate paths that can reduce duplicate testing: trade-exam waivers “may be available for applicants licensed in participating states” (confirm your specific state with the Board before assuming this applies), and participation in the NASCLA Accredited Examination Program, which covers Commercial General Building Contractors and Electrical classifications specifically and is designed to let a contractor who passes it avoid retaking a duplicate trade exam in other NASCLA member states. Neither path waives Tennessee’s own Business and Law exam, financial-statement, or entity-registration requirements.