2.1 Licensing Thresholds, Classifications, and Prov Exam Logistics

The Tennessee Contractors Licensing Act of 1994 and the Licensing Board

Construction contracting in Tennessee is governed by the Tennessee Contractors Licensing Act of 1994 (T.C.A. §§ 62-6-101 et seq.) and the administrative rules codified in Tennessee Compiled Rules and Regulations (Tenn. Comp. R. & Regs.) Chapter 0680-01. The statute is administered and enforced by the Tennessee Board for Licensing Contractors, which operates within the Division of Regulatory Boards of the Tennessee Department of Commerce and Insurance (TDCI).

Under T.C.A. § 62-6-104, the Board consists of nine (9) members appointed by the Governor. To ensure balanced industry and consumer representation, the statutory membership includes licensed contractors experienced in residential construction (BC-A), commercial construction (BC-B), mechanical/electrical/plumbing (MEP) construction (CMC/CE), and highway/municipal/utility construction (HRA/MU), together with at least one public member who has no financial or professional tie to the construction industry. The Board sets examination standards, establishes monetary limits and license classifications, adopts administrative rules, and adjudicates disciplinary complaints.

---

Statutory Dollar Thresholds: Prime Contractors, Subcontractors, and Exemptions

The $25,000 General Threshold for Prime Contractors and Construction Managers

Under T.C.A. § 62-6-102(4)(A), "contracting" encompasses any person, firm, or corporation that performs or oversees construction, erection, alteration, repair, remodeling, or demolition when the total cost of the completed project is $25,000 or more. Two fundamental rules govern how the $25,000 threshold is measured on the examination:

1. Total Cost Includes Materials, Labor, Equipment, Overhead, and Profit: A contractor cannot drop a project below $25,000 by having the property owner purchase materials directly or furnish owner-supplied fixtures. For example, if a homeowner purchases $16,000 of roofing materials directly from a supplier and hires a roofer for $11,000 of labor, the total cost of the roofing scope is $27,000, and an active Tennessee contractor's license is legally required before bidding or contracting.
2. Prime Contractors and Construction Managers: Anyone contracting directly with the property owner (or the owner's agent/lessee) is a Prime Contractor and must hold a state contractor's license whenever the contract or project is $25,000 or more. Likewise, any Construction Manager or Construction Consultant who oversees, coordinates, or manages a construction project where the total completed project cost is $25,000 or more must hold an active Tennessee contractor's license, even if trade subcontractors perform 100% of the physical field labor.

Subcontractor Licensing Thresholds

When a properly licensed Prime Contractor oversees a project, most trade subcontractors working under contract with that Prime Contractor—such as framing, drywall, painting, flooring, cabinetry, siding, or concrete flatwork subcontractors—are not required to hold their own state contractor's license, even when their subcontract price exceeds $25,000.

However, T.C.A. § 62-6-102(4)(A) and T.C.A. § 62-6-119 establish strict statutory exceptions for regulated trades. A subcontractor working under a licensed Prime Contractor must hold its own active Tennessee contractor's license before bidding or contracting when its trade scope (including all materials and labor) reaches:

• Electrical (CE): $25,000 or more
• Plumbing (CMC-A or CMC): $25,000 or more
• Heating, Ventilation, and Air Conditioning — HVAC (CMC-C or CMC): $25,000 or more
• Mechanical (CMC): $25,000 or more
• Roofing (BC or S-Roofing): $25,000 or more
• Masonry (LMC — Licensed Masonry Contractor): $100,000 or more

Worked Multi-Party Project Example: Suppose a licensed BC-B Prime Contractor bids on a $2,400,000 retail center and receives subcontract quotes for $140,000 in structural steel erection, $88,000 in brick masonry, $65,000 in drywall, $32,000 in roofing, and $28,000 in plumbing. Under Tennessee law, only the $32,000 roofing subcontractor and the $28,000 plumbing subcontractor must hold their own state contractor's licenses before bidding. The $88,000 masonry subcontractor is below the $100,000 masonry (LMC) threshold, and the steel erection and drywall subcontractors are covered under the licensed BC-B Prime Contractor.

Under-$25,000 Credentials: Home Improvement, LLE, and LLP

For smaller projects below the $25,000 contractor threshold, Tennessee regulates specific scopes through separate credentials:

• Home Improvement License (T.C.A. §§ 62-6-501 et seq.): Required for residential remodeling, alteration, repair, replacement, or improvement to an existing residence or driveway when the total contract price is from $3,000 to $24,999 in the nine (9) participating counties that have adopted the Home Improvement Act: Bradley, Davidson, Hamilton, Haywood, Knox, Marion, Robertson, Rutherford, and Shelby. Applicants must post a $10,000 surety bond (or cash bond, certificate of deposit, or irrevocable letter of credit) and proof of insurance, though no trade examination is required. Once a residential remodel reaches $25,000 or more, or involves constructing a brand-new dwelling, a full BC-A contractor's license is required statewide.
• Limited Licensed Electrician (LLE) and Limited Licensed Plumber (LLP): State credentials covering electrical or plumbing installations valued at less than $25,000 in counties or municipalities that do not operate an approved local code inspection and licensing program. Neither an LLE nor an LLP is valid for any electrical or plumbing scope of $25,000 or more, nor can an LLE or LLP credential be listed on a bid envelope for a $25,000+ subcontract.

The Owner Property Exemption (T.C.A. § 62-6-103(a)(2)(A))

A property owner may construct or improve a building on their own real property without a contractor's license only if the structure is intended for the owner's own occupancy or use and is not built for sale, lease, or rent to the general public. To prevent unlicensed speculative building, the statute restricts a property owner to claiming only one (1) owner-builder exemption every 24 months (2 years). Even when an owner qualifies for this exemption, any Electrical, Plumbing, HVAC, Mechanical, or Roofing contractor hired for $25,000 or more (or Masonry contractor hired for $100,000 or more) must still hold an active Tennessee contractor's license.

---

Major License Classifications and the 20% Incidental Rule

Under Tenn. Comp. R. & Regs. 0680-01-.12 and 0680-01-.16, the Board issues licenses in major prime classifications and specialty sub-classifications:

• BC (Building Construction): The comprehensive master building classification combining Residential (BC-A), Commercial (BC-B), and Industrial (BC-C) construction across 34 building sub-classifications.
• BC-A (Residential Building): Covers construction, remodeling, and repair of single-family and multi-family residential buildings up to three (3) stories in height and containing no more than four (4) separate living units, plus accessory structures.
• BC-B (Commercial Building): Covers commercial, institutional, and multi-family structures of any height or unit count (including residential structures exceeding 3 stories or 4 units).
• BC-b(sm) (Small Commercial): Commercial construction classification capped at a maximum monetary limit of $1,500,000.
• BC-A,b(sm) (Combined Residential and Small Commercial): Combined classification permitting both residential and small commercial work for contractors whose monetary limit is less than $750,000.
• BC-A/r (Restricted Residential Limited License): Restricted residential classification capped strictly at a monetary limit of less than $125,000 (including the cost of land, materials, labor, and profit), with 0% monetary limit tolerance. Applicants may complete a Board-approved 14-day community college course in lieu of the BC-A trade exam (the approved restricted residential course substitutes for both the Business and Law and residential trade examinations). Holders of a BC-A/r license are prohibited from forming a joint venture to increase their monetary limit.
• BC-C (Industrial Building): Heavy industrial, manufacturing, and processing plant construction.
• CE (Electrical Contracting): All electrical construction and high-voltage distribution.
• CMC (Full Mechanical Contracting): Encompasses Plumbing (CMC-A), Process Piping (CMC-B), HVAC and Refrigeration (CMC-C), Fire Protection Sprinklers (CMC-D), and Gas Piping.
• CMC-A (Plumbing) & CMC-C (HVAC/Refrigeration): Standalone mechanical sub-classifications.
• LMC (Licensed Masonry Contractor): Required for masonry contracts and subcontracts of $100,000 or more.
• MU (Municipal and Utility), HRA (Highway, Railroad, and Airport), and S (Specialty Classifications).

The 20% Incidental Rule (Rule 0680-01-.16): A contractor holding a major building classification (such as BC-B) may perform work in other building sub-classifications not specifically listed on its license if that work is incidental to the overall contract and represents less than 20% of the total contract amount—provided the work does not require a separate statutorily mandated license (such as Electrical, Plumbing, HVAC, or Mechanical $\ge \text{\textdollar}25,000$, Masonry $\ge \text{\textdollar}100,000$, or environmental abatement).

---

Board Pre-Approval and Prov Examination Logistics

Trade Exam Pre-Approval (CMC and CMC-A Only)

Candidates do not need prior Board approval to register for the Tennessee Business and Law exam or most trade exams (such as BC, BC-A, BC-B, CE, or CMC-C). Only two trade exams require prior Board pre-approval before scheduling with Prov:

1. Full Mechanical (CMC)
2. Plumbing (CMC-A) (which requires demonstrating at least 3 years of documented plumbing experience or holding an accredited engineering degree, plus submitting a $50 pre-approval fee to the Board).

Prov Examination Rules (TNCONT_CIB current portal checked October 13, 2026)

Effective July 1, 2026, Prov, Inc. serves as the official testing vendor for the Tennessee Board for Licensing Contractors:

• Exam Fee and Current Format: Prov’s current Tennessee portal publishes 50 questions, 150 minutes, a 73% passing score, and a $53 fee for Business and Law. It identifies the NASCLA Tennessee fourth edition (2024) as the reference. Do not convert the published percentage into a guaranteed raw passing count without the testing agency’s scoring rules.
• Scheduling and Retesting: Check the bulletin and appointment confirmation applicable to the test date for cancellation, rescheduling, retest waiting periods, remote equipment, and review procedures. The newly posted bulletin marked October 14, 2026 is future dated relative to this October 13 source check; its policies should not be represented as already effective today. It specifies three days’ cancellation notice and a 30-day wait after a failed attempt for tests governed by that edition.
• Open-Book Preparation: Use the listed title and permitted edition. Permanent tabs and pretest highlighting are allowed; removable notes, added sheets, handwritten notes, and marking the reference during testing are prohibited under Prov’s book instructions. Keep calculations on supplied scratch materials.
• Breaks: Follow the proctor’s break instructions. The October 14 bulletin warns that the timer keeps running and previously viewed questions become locked after a restroom break.
• Source Conflicts: Applicable statutes and rules govern legal practice. For test logistics, use Prov’s current exam-specific listing and effective bulletin rather than an older general announcement.

Source check (October 13, 2026): Prov Tennessee exam portal.