What Are Tennessee's Contractor Licensing Rules?

Is a contractor license required in Tennessee?

Yes, for most construction work. A full contractor's license is required once a project — residential, commercial, or industrial — reaches $25,000, including labor, materials, and equipment. Electrical, mechanical, plumbing, HVAC, and roofing subcontractors hit this same $25,000 threshold on their own portion of a job; masonry subcontractors trigger it at $100,000. Below $25,000, a separate Home Improvement Contractor license covers residential remodeling work between $3,000 and $24,999 — but only in nine counties that have adopted it: Bradley, Davidson, Hamilton, Haywood, Knox, Marion, Robertson, Rutherford, and Shelby. Outside those counties, there's no state license required below $25,000. Smaller electrical and plumbing work has its own separate Limited Licensed Electrician and Limited Licensed Plumber credentials.

Which agency regulates it?

The Tennessee Board for Licensing Contractors, under the Department of Commerce and Insurance — and one system covering everything, not split boards. General building, residential building, commercial building, electrical, mechanical, plumbing, HVAC, and home improvement are all classifications within the same Board, alongside the separate limited electrician and plumber credentials for smaller jobs.

Where can you find the actual laws?

Contractor licensing is Tennessee Code Annotated Title 62, Chapter 6. The licensing requirement and restrictions sit in §§ 62-6-102 and 62-6-103, qualifying agent authority is § 62-6-115, and violations and penalties are § 62-6-120. Home improvement contracting is separately defined in § 62-6-501. Board regulations sit in Tennessee Rules and Regulations Chapter 0680-01, with qualifying agent requirements specifically in Rule 0680-01-.02 and qualifying agent changes in Rule 0680-01-.23. The Tennessee Board for Licensing Contractors publishes its own application instructions and classification outline directly.

What does it take to get licensed?

The qualifying agent (QA) can be an owner, officer, or a full-time employee — ownership isn't required. A full-time employee QA with less than 20% ownership needs a notarized power of attorney signed by the actual owner, which ties their authority directly back to someone with real ownership stake. Applicants generally need to pass Tennessee's Business and Law exam plus a classification-specific trade exam, though a few specialty classifications skip the trade exam. Financial qualification works on a formula: the monetary limit a contractor can take on is roughly 10 times whichever is lower, working capital or net worth, backed by a CPA-reviewed statement (or audited, above $3 million). Starting July 1, 2026, Tennessee also accepts a surety bond as an alternative to that financial statement, set at 50% of the requested monetary limit. General liability insurance minimums scale with that same limit — $100,000 below $500,000, up to $1 million above $1.5 million — and workers' compensation is required unless the business qualifies for an exemption. The Home Improvement license has its own, separate set of requirements: a $10,000 surety bond or equivalent financial security, general liability insurance, and evidence of residential remodeling experience, with a $250 application fee for either license.

What are the penalties for operating without a license?

Real on both the criminal and civil side. Operating as a contractor without the required license is a Class A misdemeanor, carrying up to 11 months and 29 days in jail. Separately, the Board can impose a civil penalty of up to $5,000 per offense, and its own rules count each day a violation continues as a separate offense, so the exposure compounds the longer the work goes unlicensed. An unlicensed contractor required to hold a license also can't recover ordinary contract damages if a dispute goes to court — recovery is limited to actual, documented expenses proven by clear and convincing evidence — and mechanic's lien rights are restricted for work performed in violation of the licensing law, even if the job was substantially finished.

Does Tennessee have reciprocity with other states?

Yes, but only as a trade-exam waiver, not an automatic license transfer. Tennessee currently waives its trade exam for applicants holding a qualifying license from Alabama, Arkansas, Louisiana, Mississippi, North Carolina, Ohio, South Carolina, or West Virginia, plus Georgia specifically for electrical licensing — the recognized classification varies by state rather than being a blanket waiver. Every applicant, reciprocal or not, still has to pass Tennessee's own Business and Law exam, and a clean disciplinary record is a hard requirement — any open complaint or felony conviction disqualifies an applicant from the waiver entirely. These agreements apply to the full contractor license only; the Home Improvement license and the limited electrician and plumber credentials aren't covered by reciprocity at all.

Is it legal to rent or lease a license in Tennessee?

No. "Qualifying Agent" is Tennessee's actual statutory term, and the law is explicit that a qualifying agent doesn't need to own the business — but whoever holds the role has to occupy a position of real, responsible supervision over its management and construction work. A non-owner serving as QA has to be a genuine full-time employee, not simply listed on an application, and their authority has to be backed by a notarized power of attorney from someone who actually owns the business. One QA generally can't be added to multiple unrelated contractor licenses — qualifying more than one business requires an ownership stake in at least one of them, and Board review applies when a QA is newly hired or already tied to another license. If a QA leaves, the business has 10 days to notify the Board and three months to name a replacement who meets the same requirements — missing that window invalidates the affected license classification, or the entire license if it only covers one. Paying a qualifying agent is perfectly legal; what isn't legal is attaching someone's credentials to a business without the real employment and supervision the role actually requires.

How do you find a qualifier or a business in Tennessee?

findQualifier.com is a public, searchable board of licensed professionals advertising their availability to work as a qualifier, by state and trade. Browse available qualifiers in Tennessee, browse Tennessee businesses looking to hire, or post a listing.