Do Subcontractors Need a License in Tennessee
Yes — depending on the trade and the subcontract value. Tennessee does not give subcontractors a blanket pass because they work under a general contractor. The Board for Licensing Contractors holds subcontractors to the same threshold system that applies to prime contractors, with the dollar line varying by trade.
The Thresholds by Trade
| Trade | State License Required At |
|---|---|
| Electrical | $25,000 |
| Mechanical | $25,000 |
| Plumbing | $25,000 |
| HVAC | $25,000 |
| Roofing | $25,000 |
| Masonry | $100,000 |
These thresholds apply to the value of the subcontract itself — not the overall project value. An electrician performing $30,000 of work on a $2 million commercial project needs their own state license, even though they are working under a licensed general contractor.
Below these thresholds, subcontractors may still need local credentials depending on the municipality and the type of work. In the nine counties that adopted the Home Improvement License law, residential remodeling subcontractors may need that credential for work between $3,000 and $24,999.
What General Contractors Must Do
General contractors need the current license details for each qualifying subcontractor on their project. The bid rules require the subcontractor's company name, license number, classification, and expiration date when the work value meets the threshold.
On public bids, general contractors must list the names, license numbers, classifications, and expiration dates of their plumbing, HVAC, mechanical, electrical, masonry, and roofing subcontractors on the outside of the bid envelope or in the digital bid portal. An expired or missing license can create a bid-compliance problem.
On active job sites, general contractors must maintain physical copies of the Certificates of Insurance for all subcontractors.
What Happens When Subcontractors Skip Licensing
An unlicensed subcontractor working above their trade's threshold faces the same penalties as an unlicensed prime contractor:
- Uncollectible contracts — they cannot enforce the subcontract in Tennessee courts to recover unpaid balances
- Lost mechanics' lien rights — they cannot file a lien on the property
- Criminal liability — unlicensed contracting above the threshold is a Class A misdemeanor
The general contractor also faces risk. Using an unlicensed subcontractor can trigger Board scrutiny, consumer complaints, and complications with the general contractor's own license standing.
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The Bidding Tolerance Question
Licensed subcontractors receive the same 10% bidding tolerance that licensed general contractors get — they can bid up to 10% above their monetary limit. But this tolerance only applies to subcontractors who hold their own active state license. An unlicensed subcontractor gets zero tolerance; bidding $25,001 without a license is a violation regardless of the general contractor's credentials.
Transitioning From Subcontractor to Independent Contractor
Many subcontractors reach a point where property owners or project developers offer them direct contracts — bypassing the general contractor entirely. That moment triggers the full state licensing requirement: entity formation, exams, financial documentation, insurance, and the CORE portal application.
The Tennessee General Contractor License Guide walks through the complete transition from subcontractor to independent licensed contractor, including the experience documentation and reference letter requirements the Board evaluates during the application review.
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