Know the Class, Exam and Dollar Limit Before You Bid
Tennessee contractor licensing is not just a pass-the-test issue. The Board assigns each contractor license a classification and a monetary limit, and both control what a contractor may bid, negotiate or perform.
This guide is written for Tennessee applicants, out-of-state contractors planning work in Tennessee, and homeowners who want to know whether the contractor’s license fits the project.
Quick Answer: Tennessee Uses Classification Plus Monetary Limit
A Tennessee contractor’s license is generally required before bidding, offering a price or contracting for projects of $25,000 or more when acting as a prime contractor, certain subcontractor, or construction manager/consultant. The license must include the right classification and a monetary limit large enough for the total project or contract amount.
Official Tennessee Links for the Actual Filing or Lookup
Use these state sources after reading the requirements. The official Tennessee systems control license applications, renewals, public lookup records, qualifying agent checks and complaints.
Applicant and licensee actions
Use CORE for contractor application and renewal work. Use the Board’s license pages for classification, exam, fee and renewal rules before submitting.
Consumer and verification actions
Homeowners should verify the license, classification, status, expiration and qualifying agent before signing or paying.
Who Needs a Tennessee Contractor License?
Tennessee requires a contractor’s license before contracting when the project reaches the licensing threshold. “Contracting” is broader than physically doing the work; it can include bidding, offering to engage, negotiating a price, supervising, managing, scheduling or assuming charge of the work.
Directly with the owner
A prime contractor generally needs a Tennessee contractor license for projects of $25,000 or more, including materials, labor, equipment and profit.
Certain trades are pulled in
Electrical, mechanical, plumbing, HVAC and roofing subcontractors generally need a contractor license when that portion is $25,000 or more.
Different subcontractor number
Masonry subcontractors are treated separately and generally need the licensed masonry contractor path when the masonry portion is $100,000 or more.
| Situation | Common Tennessee answer | What to check next |
|---|---|---|
| Residential remodel directly for homeowner, $25,000+ | Contractor license usually required. | BC-A, BC-A/r, BC or applicable specialty, plus permit and local rules. |
| Commercial build-out, $25,000+ | Contractor license usually required. | BC-B, BC-b(sm), BC, specialty, monetary limit and local permit. |
| Electrical, plumbing, HVAC, mechanical or roofing subcontract, $25,000+ | Contractor license can be required for that subcontractor’s portion. | CE, CMC, CMC-A, CMC-C, BC-21 or accepted broader class. |
| Masonry subcontract, $100,000+ | Licensed Masonry Contractor classification is commonly required. | LMC classification and correct monetary limit. |
| Construction management or consultant role, $25,000+ | Contractor license requirement may apply. | Board classification, contract scope and total project value. |
Tennessee Contractor License Classes and What They Mean
Every Tennessee contractor license is assigned a classification and a monetary limit. The classification controls the kind of work the contractor may bid or perform. The monetary limit controls the maximum dollar amount for each project or contract.
| Class | Plain-English use | Exam note | Limit note |
|---|---|---|---|
| BC | Full building construction covering residential, commercial and industrial building work, including BC-A, BC-B, BC-C and building subcategories. | Trade exam required, plus Business and Law. | Must have a monetary limit high enough for the project. |
| BC-A | Residential construction for one-, two-, three- and four-family residences not exceeding three stories, plus accessory structures. | Residential trade exam required, unless using the BC-A/r restricted course route. | Board-approved monetary limit still applies. |
| BC-A/r | Restricted residential license for single-family work with a limit not exceeding $125,000. | Approved course may be used in place of the residential trade exam and Business and Law exam. | No 10% tolerance, no joint venture stacking and no exceeding the assigned limit. |
| BC-B | Commercial building work, including public-use buildings and residential construction with more than four units or over three stories. | Commercial trade exam required, unless an accepted waiver applies. | Must match project value and financial statement support. |
| BC-b(sm) | Small commercial building work. | Small commercial route applies; full BC-B exam needed to move beyond the cap. | Small commercial limit cannot exceed $1,500,000. |
| BC-C | Industrial buildings and structures used for industrial production or service. | Industrial trade exam required. | Monetary limit is still project-specific. |
| CE | Electrical contracting. | Trade exam required, plus Business and Law. | Check both state license and permit inspection rules. |
| CMC / CMC-A / CMC-C / CMC-D | Mechanical, plumbing, HVAC and fire-sprinkler related classifications. | Trade exam required; plumbing CMC-A and full mechanical CMC require Board pre-approval before testing. | License limit must cover the work portion. |
| HC / HRA / MU | Heavy construction, highway/railroad/airport work and municipal utility construction. | Business and Law is required; some classification routes do not use the same trade-exam pattern as building classes. | Public-work and agency requirements may add extra conditions. |
| LMC | Licensed Masonry Contractor classification for masonry work at the Tennessee threshold. | Trade exam required. | Especially important for masonry portions of $100,000 or more. |
Tennessee Contractor Exams: Business and Law, Trade Exams and NASCLA
New Tennessee contractor license applicants must pass the Tennessee Business and Law exam. Many classifications also require a trade exam. The same person does not have to take both exams for the company, and up to two people may take each exam for the entity.
Business and Law exam
This is the base Tennessee contractor exam requirement for new contractor license applicants. It covers business, law and licensing topics rather than trade-only field knowledge.
Trade exam
Trade exams depend on the requested classification. Building, electrical, mechanical, plumbing, HVAC, fire sprinkler and masonry routes may require a trade exam or pre-approval step.
Prov exam transition
Beginning July 1, 2026, Prov serves as the Tennessee Board’s exam provider for new scheduling. Candidates already scheduled with PSI after July 1 may keep that PSI appointment or schedule through Prov instead.
Exam validity
Contractor exam scores are typically valid for two years by the Board. Do not take the exam and then let the application window drift without checking the current filing timeline.
| Exam or waiver item | Tennessee meaning | Common mistake |
|---|---|---|
| Business and Law | Required for new contractor license applicants. | Thinking a trade exam alone completes Tennessee licensing. |
| Trade exam | Required for certain classifications. | Taking the wrong trade exam for the classification requested. |
| CMC-A or full CMC pre-approval | Board pre-approval is required before taking plumbing CMC-A or full mechanical CMC exams. | Scheduling before submitting the required pre-approval request. |
| Reciprocal trade exam waiver | May waive a trade exam for active licensees from listed states and classifications. | Assuming another state’s license lets you work in Tennessee without a Tennessee license. |
| BC-A/r course route | Approved course route for restricted residential work below the $125,000 cap. | Using BC-A/r like a full residential license. |
Tennessee Monetary Limits: The Number That Controls the Size of the Job
A Tennessee contractor license is issued with a monetary limit. This is the total dollar amount for each individual project or contract. It includes the full project amount, not just labor or the contractor’s fee.
Limit formula
The Board calculates monetary limits using 10 times the lesser of working capital or net worth, plus required experience.
Unlimited limit
To qualify for an unlimited monetary limit, the applicant must show at least $300,000 in both working capital and net worth, plus required experience.
10% tolerance
Tennessee recognizes a 10% monetary-limit tolerance in many contractor situations, but not for the restricted residential BC-A/r license.
| Limit issue | What Tennessee looks at | Why it matters before bidding |
|---|---|---|
| Working capital | Current financial ability shown in the required financial statement. | The lower of working capital or net worth drives the limit calculation. |
| Net worth | Entity financial condition in the exact license name and mode of operation. | A high net worth cannot rescue a low working capital number for the formula. |
| Reviewed financial statement | Required for requested limits of $3,000,000 or less. | The statement must be prepared by a properly licensed independent CPA or PA. |
| Audited financial statement | Required for limits exceeding $3,000,000. | Higher limits require stronger financial support. |
| Surety bond option | Beginning July 1, 2026, a Board-approved contractor surety bond may be used as an alternative to a reviewed or audited financial statement. | The bond must be at least 50% of the requested monetary limit. |
Tennessee Contractor License Application Checklist
Most delays come from small mismatches: the business name on CORE does not match the Secretary of State record, the financial statement uses the wrong entity name, the insurance certificate is missing the Board as certificate holder, or the qualifying agent paperwork is incomplete.
Choose the license classification first
Pick the class that matches the work you will bid and perform. Do not choose a class only because the exam looks easier.
Pass the required exam path
Complete Business and Law and the applicable trade exam, waiver, pre-approval or BC-A/r course route before filing the application.
Prepare the financial support
Use the exact legal entity and mode of operation that will hold the license. Reviewed, audited, surety bond, line of credit or guaranty options must match Board rules.
Attach reference and insurance documents
The reference should come from a past client, employer or code official who can speak to construction experience. General liability and workers’ compensation documents must be current and Tennessee-ready.
Complete the affidavit and entity paperwork
The Contractor’s Affidavit must be signed and notarized by the required people. Corporations, LLCs and partnerships must show active registration with the Tennessee Secretary of State.
Submit the application and fee
The initial contractor application fee is $250. Online filing through CORE is the normal path for current applications.
Insurance, Workers’ Compensation and Business Name Matching
Tennessee contractor applicants must provide proof of general liability insurance, and workers’ compensation coverage is required unless a proper exemption applies. Insurance paperwork should match the legal license name and show coverage that includes Tennessee.
| License limit range | Board-listed general liability minimum | Practical filing note |
|---|---|---|
| $0 to $500,000 | $100,000 | Many insurers may offer higher minimums, but the Board minimum starts here. |
| $500,001 to $1,500,000 | $500,000 | Certificate must identify policy number, effective date and expiration date. |
| More than $1,500,001 to unlimited | $1,000,000 | Higher license limits require higher general liability coverage. |
Workers’ compensation
Workers’ compensation is separate from general liability. If a contractor claims an exemption, the paperwork must fit Tennessee’s exemption process rather than simply saying “no employees.”
Exact-name problem
The contractor must bid and contract in the exact name and mode of operation as licensed. A sole proprietor license, LLC, corporation and DBA are not automatically interchangeable.
Tennessee Contractor License Renewal, Late Renewal and CE
Tennessee contractor licenses renew through CORE. The renewal option appears within 90 days of expiration, and the Board recommends submitting renewal at least 30 days before expiration to avoid working on an expired license.
Renewal fee
The contractor renewal fee is $200 for the two-year renewal period.
Late renewal
Contractor licenses have a 12-month renewal grace period, with a $20 per month late fee during the grace period.
Residential CE
BC-A and BC-A/r contractors must complete eight hours of continuing education with each biennial renewal.
| Renewal document | Who should expect it | Why the Board checks it |
|---|---|---|
| Financial statement or balance sheet | Contractors renewing with a monetary limit. | To confirm the financial support still matches the limit. |
| General liability certificate | Contractors and home improvement licensees. | To confirm current coverage and Tennessee applicability. |
| Workers’ compensation or exemption | Contractors with employees, or those claiming an exemption. | To verify the proper workers’ compensation status. |
| Secretary of State active status | Corporations, LLCs and partnerships. | To confirm the licensed business entity remains active. |
| CE certificate | BC-A and BC-A/r contractors. | Residential contractors in those classes have an eight-hour CE renewal requirement. |
Local Business Licenses, Permits and County Checks
A Tennessee contractor license does not replace every local requirement. Contractors may also need business tax registration, a county or municipal business license, and project permits from the local building department.
Business tax and local business license
Tennessee business tax rules are separate from contractor licensing. In-state businesses with more than $3,000 but less than $100,000 in gross receipts generally need a minimal activity license from the county or city clerk. Businesses with $100,000 or more generally need a standard business license and business tax registration.
Building permits and inspections
Permits are project-specific. A contractor may hold the right state license and still need electrical, plumbing, mechanical, building, zoning, stormwater or local inspection approvals before work begins.
Homeowner Check: How to Verify a Tennessee Contractor Before Paying
For a homeowner in Nashville, Memphis, Knoxville, Chattanooga, Clarksville or a smaller Tennessee town, the safest check is boring and documented. Match the license record to the actual business asking for payment.
Search the official license record
Use Tennessee’s public license search. Search by license number first, then business name if needed.
Open the exact license
Check status, expiration, classification, monetary limit and business name. Do not rely on a screenshot or a contractor’s website badge.
Match the written contract
The proposal, contract, invoice and payment name should match the licensed entity or be clearly explained in writing.
Check the limit and scope
A license with a low monetary limit or wrong classification may not cover your project, even if the license is active.
Ask for insurance and permit proof
Verify general liability, workers’ compensation where applicable, and the building permit path before work starts.
Tennessee Complaints and Discipline: What the Board Can Do
The Tennessee Board for Licensing Contractors accepts complaints involving unfair or deceptive business practices, unlicensed activity, suspected misconduct and violations of contractor laws or rules. A complaint is a regulatory path, not an automatic refund.
| Problem | Useful evidence | Likely official path |
|---|---|---|
| Unlicensed bidding or contracting | Estimate, text messages, bid amount, work scope, payment request and license lookup screenshot. | Tennessee Board contractor complaint. |
| Wrong license name on contract | License record, contract, invoice, payment receipt and Secretary of State record. | Board complaint or consumer protection review. |
| Permit problem | Permit record, inspection notices, stop-work notice, photos and contract language. | Local building department plus Board complaint if license law is involved. |
| Poor workmanship only | Contract, photos, expert report, inspection report, invoices and repair estimates. | May require civil advice; Board discipline does not automatically collect damages. |
Tennessee Board for Licensing Contractors Contact
Use the Board for contractor licensing questions, application issues, renewal problems, classification questions and complaint routing. Use local building departments for project permits.
Board office
Email paths commonly used by the Board
Tennessee Contractor License Requirements FAQs
When is a Tennessee contractor license required?
A Tennessee contractor license is generally required before bidding, offering a price or contracting for projects of $25,000 or more as a prime contractor, certain subcontractor, or construction manager/consultant.
Does the $25,000 threshold include materials?
Yes. Tennessee looks at the total project or contract amount, including materials, labor, equipment, profit and related project costs.
Do Tennessee subcontractors need a contractor license?
Some do. Electrical, mechanical, plumbing, HVAC and roofing subcontractors generally need a contractor license when that portion is $25,000 or more. Masonry subcontractors generally use the $100,000 threshold.
What is a Tennessee monetary limit?
The monetary limit is the maximum project or contract amount assigned to the contractor’s license. It is based on financial support and experience, and it must be high enough for the job.
How is a Tennessee contractor monetary limit calculated?
The Board generally calculates the monetary limit as 10 times the lesser of working capital or net worth, plus required experience. Unlimited limits require at least $300,000 in both working capital and net worth.
Is the Tennessee Business and Law exam required?
Yes. New Tennessee contractor license applicants must take the Business and Law exam unless they are using a specific Board-recognized route such as the BC-A/r approved course path.
Does Tennessee require trade exams?
Many classifications require a trade exam. Building, electrical, mechanical, plumbing, HVAC, fire sprinkler and masonry routes should be checked against the official Tennessee classification outline.
Can I use NASCLA as a Tennessee contractor license?
No. NASCLA is not a Tennessee license. Tennessee may accept the NASCLA National Commercial exam for a trade-exam purpose, but the contractor must still apply and be licensed in Tennessee.
What is the BC-A/r restricted residential license?
BC-A/r is a restricted single-family residential route with a monetary limit not exceeding $125,000. It uses an approved course path and has no 10% monetary-limit tolerance.
How much is the Tennessee contractor license application fee?
The current initial contractor license application fee is $250. The contractor renewal fee is $200.
Do Tennessee contractors need general liability insurance?
Yes. General liability insurance is required and the minimum amount depends on the contractor’s monetary limit. Workers’ compensation coverage is also required unless a proper exemption applies.
Does a Tennessee contractor license replace a local permit?
No. A contractor license and a permit are different. A licensed contractor may still need a building, electrical, plumbing, mechanical, zoning or other local permit for the specific job.
Final Tennessee License Check
Before a Tennessee contractor bids or signs, the classification, monetary limit, exam path, financial support, insurance and business name should line up. Before a homeowner pays, the official license lookup, contract name, permit path and insurance proof should line up.
The cleanest Tennessee contractor check is simple: right class, active license, enough limit, correct name, current insurance and local permit approval where required.