Quick facts: Tennessee requirements
- Contractor license
- Required at $25,000+ as prime contractor ($100,000+ for masonry subs)
- Home Improvement license
- Covers $3,000-$24,999 jobs, only in 9 adopting counties
Fees, insurance minimums, and rules change. Verify every item with the responsible agency before you rely on it.
Tennessee sorts contractors by project size, and which credential you need depends on exactly where your job value falls.
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What starting a Tennessee contracting business actually involves
The contractor license threshold is $25,000 - with a lower bar for masonry subs. A license is required for projects of $25,000 or more when you're acting as the prime contractor. Certain subcontractors need one too - masonry subcontractors specifically are required to be licensed at $100,000 or more.
Two exams, and the exam provider just changed. Everyone applying needs to pass the Business and Law exam. Most classifications also require a trade exam, though there are limited exceptions. As of July 1, 2026, the exam provider transitioned from PSI to Prov - a change that's already in effect. Exams are open-book and typically remain valid for two years.
Your financial statement requirement scales with the license limit you're requesting. The statement has to be current (less than 12 months old) and follow GAAP. For a limit up to $3,000,000, you need a "reviewed" statement; above that, you need a full "audited" statement. For an unlimited license, you instead have to demonstrate $300,000 in both working capital and net worth. Beyond the financial statement, you also need general liability insurance, a reference letter from a past client or code official, and a notarized Contractor's Affidavit.
Below the $25,000 threshold, a separate Home Improvement license may apply - but only in certain counties. This license covers residential remodeling projects valued between $3,000 and $24,999, including repair, replacement, remodeling, alterations, additions, driveways, pools, roofing, and landscaping. It's only required in nine counties that have adopted it: Bradley, Davidson, Hamilton, Haywood, Knox, Marion, Robertson, Rutherford, and Shelby. It requires a $10,000 surety bond, general liability and workers' compensation insurance, corporate registration where applicable, proof of remodeling experience, and a $250 application fee.
Where people get stuck
The mistake is assuming one license covers your entire project range. A contractor doing both $15,000 remodels and $50,000 additions in one of the nine adopting counties may genuinely need both credentials - check where each individual project falls before assuming your existing license covers it.
Not sure whether you need the contractor license, the Home Improvement license, or both? Contractor Lane walks through it with you.
Where Contractor Lane comes in
Contractor Lane helps you match your project sizes to the right license, and gets your financial statement tier and exam prep lined up before you apply.
Build your free roadmap to get the sequence for your specific trade and target project size.
General educational information for people starting a business in Tennessee. Requirements and fees change. Contractor Lane is not a law firm or tax advisor.
Common questions
When does Tennessee require a contractor license?
A contractor license is required for projects of $25,000 or more when acting as a prime contractor, or for certain subcontractors - masonry subcontractors need one at $100,000 or more. Below the $25,000 threshold, a separate Home Improvement license may apply instead in nine counties: Bradley, Davidson, Hamilton, Haywood, Knox, Marion, Robertson, Rutherford, and Shelby. Source: Tennessee Board for Licensing Contractors.
What does it take to get a Tennessee contractor license?
You must pass a Business and Law exam (required for everyone) and a trade exam for your specific classification, with limited exceptions. You also need a current financial statement, less than 12 months old and GAAP-compliant: a reviewed statement for limits up to $3,000,000, an audited statement above that, or proof of $300,000 in both working capital and net worth for an unlimited license. General liability insurance, a reference letter, and a notarized Contractor's Affidavit are also required. Source: Tennessee Board for Licensing Contractors.