Tennessee Contractor Licensing Law and Board Rules
Who must be licensed
The Tennessee Board for Licensing Contractors licenses contractors, and the threshold that candidates most often miss is $25,000. A general contractor may not bid on, offer to engage in, or perform a single project of $25,000 or more without a license. Projects between roughly $3,000 and $24,999 fall under the separate home improvement license. Subcontractors performing electrical, mechanical, plumbing, or other separately classified work must hold the corresponding license regardless of who holds the prime contract.
Classifications and monetary limits
Licenses carry classifications - building construction (BC and its subgrades), commercial/industrial/institutional, highway/railroad, municipal utility, and the specialty trades - plus a monetary limit set from reviewed financial statements. The limit caps the size of a single project, not annual volume. Bidding or contracting beyond the limit is unlicensed activity even if the license itself is current.
Consequences of unlicensed activity
- The contractor may not bring an action to enforce the contract or to collect compensation for work requiring a license, and may not file a valid lien.
- Civil penalties and criminal exposure apply, and the Board may deny or revoke a license.
Compliance details the Board watches
Bids, contracts, and advertising in the exact licensed name; display of the license number; notification of changes in ownership, officers, name, or address; a qualifying agent who actually manages the work; renewal on the Board's cycle; continuing education as required by rule.
Trap
Questions describe a licensed company bidding a project slightly above its monetary limit or performing specialty work through an unlicensed affiliate. Both are violations.
Rule of thumb
Ask two questions of every scenario: is the dollar figure at or above $25,000, and is the work inside both the classification and the monetary limit?