“How long does it take to get a contractor’s license?” That’s a question we get from time to time. Hopefully, this post can help guide you through the process.
In Tennessee, every contractor working on projects greater than $25,000 is required to have a valid license. Failing to follow the law when you build here can lead to pretty stiff penalties and a lot of headaches.
There are several steps to getting a Tennessee contractor’s license. How long it ultimately takes is really up to you and how prepared you are. (Hint: partnering with a good CPA firm from the beginning makes it go a lot faster!)
How Long Does It Take to Get a Contractor’s License?
According to the Tennessee Contractor Board, once you have submitted your application, it takes “approximately 4-6 weeks” to receive your license. (As a reminder, do not contract, bid, or make any offers to clients before receiving your license!)
However, that time frame doesn’t take into consideration how long it may take you to complete your application and assemble all of the necessary information. Depending on how smoothly it goes, that could take you another 2-3 weeks.
It’s safe to assume that you may be waiting 2-3 months from when you first begin the process of applying for your Tennessee contractor’s license. Since you won’t be able to generate revenue as a contractor during that time, you’ll want to be sure that you either have adequate savings to carry you through or another source of income.
How Long Is a Contractor’s License Good For?
Once you receive your TN contractor’s license, it is good for 2 years. At that point, you’ll either need to renew it or “retire” it.
Most contractors who intend to keep operating their business will simply choose to renew it (more on that process in a minute). However, if there is a reason you need to take a break from working as a contractor but you still would like to have your license available, you can “retire” it anywhere between 1-7 years. The fee for that is $25 per year.
For example, a full-time licensed contractor who also serves in the National Guard may get called into duty and deployed overseas for an extended period. In that situation, it may be advantageous to simply park that license until they can start building again.
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How to Get a Contractor’s License in TN
We detailed the steps involved in how to get a contractor’s license in TN in our last post, TN Contractor’s License Renewal Made Easy (And 5 Mistakes to Avoid). For review, though, here they are again:
- Take and pass the contractor’s exam
- Prepare an approved financial statement
- Submit letters of recommendation
- Provide proof of insurance
- Register your LLC, Corporation, or Partnership with the state
- Complete your application
- Pay the fee
- Wait for it to be reviewed and (hopefully) approved
The Tennessee Board for Contractors meets every other month to examine and approve/deny license applications. (Here is a link to a calendar showing upcoming meetings.)
After the Board looks over your application, they may want to interview you in person. If your license request is for a specialized category within the industry, you aren’t able to list at least 3 years of experience on your application, or you have a felony conviction on your record you can expect to be scheduled for an interview.
These are informal meetings that typically only last half an hour or so. It is simply a time for them to ask you questions about your experience and determine firsthand whether or not you seem qualified to do the work you are wanting to do. It’s also a good opportunity for you to get advice from them since they represent many years of experience in their fields.
Many times, interviews are waived. However, you are not legally able to perform any work under that license until the Board formally meets and issues you a license number.
How to Renew a TN Contractor’s License Online
Renewing your contractor’s license at the end of 2 years is slightly easier than the initial process of applying for it. However, there are a few important things to keep in mind:
- Once your license expires, you have 12 months to renew it. Make sure to get it done before then or you will have to start the entire process from scratch.
- If you have been actively working in the industry during the previous 2 years, you do not need to retake the contractor’s exam. However, if there has been a gap, you may need to take a new one.
- Renewal forms are not automatically sent when your license is about to expire. Instead, you will receive a notice that it is time to renew. It is then up to you to go online–here is a link to the PDF–and complete the renewal application at least 30 days before your current license expires.
- The fee to renew your TN contractor’s license is $200.
- There is a grace period of 7 days after your license expires to have your renewal application postmarked. However, there is not a grace period under which you may perform any work as a contractor without a license. You are breaking the law if you do.
Tennessee Contractors Count on CRS CPA
Our team of business advisers and contract accountants has been helping TN contractors stay licensed and legal for over 40 years. We know how important it is to your business to get these applications done right, and we have what it takes to get it done quickly.