Tennessee Contractor License Cost
The state application fee for a Tennessee contractor license is $250. But the real cost of getting licensed — once you add entity formation, exams, insurance, and financial documentation — typically runs between $1,500 and $5,000 depending on the path you take.
Fixed Government Fees
| Item | Cost |
|---|---|
| State contractor application (CORE portal) | $250 |
| Domestic LLC filing (Form SS-4270) | $300 minimum |
| Domestic corporation charter (Form SS-4417) | $100 |
| DBA/assumed name registration (Form SS-4402) | $20 |
| Federal EIN (IRS) | Free |
| Workers' comp exemption registration (licensed) | $50 |
| Workers' comp exemption registration (unlicensed) | $100 |
| Biennial license renewal | $200 |
| Late renewal penalty | $20/month |
| License transfer/mode of operation change | $100 |
Exam Costs
Prov, Inc. administers the Tennessee Business and Law exam and trade-specific exams as of July 1, 2026. Exam fees vary by classification; check Prov's current fee schedule. The plumbing (CMC-A) and mechanical (CMC) exams also require a $50 Board pre-approval fee before you can schedule.
If you hold a license in one of the eight reciprocity states (Alabama, Arkansas, Louisiana, Mississippi, North Carolina, Ohio, South Carolina, or West Virginia), the trade exam is waived — you submit a License Verification form instead.
The Biggest Variable: Financial Documentation
This is where costs diverge the most.
CPA-reviewed financial statement: $1,000 to $3,000, depending on the complexity of your financials and your CPA's rates. A reviewed statement covers monetary limits up to $3 million. For limits above $3 million, you need a full CPA audit, which can run $5,000 or more.
Contractors' Surety Bond (new for 2026): Under Public Chapter 1039, effective July 1, 2026, you can skip the CPA statement entirely by posting a surety bond equal to at least 50% of your requested monetary limit. Bond premiums typically run 1% to 2% of the bond amount for applicants with strong credit. A contractor seeking a $500,000 monetary limit would need a $250,000 bond — premium of roughly $2,500 to $5,000 annually.
For smaller operations targeting a $100,000 monetary limit, the surety bond path (50% = $50,000 bond) might cost $500 to $1,000 in annual premium for strong credit; weaker credit can cost more.
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Insurance Costs
General liability premiums depend on your classification, monetary limit, and claims history. Rough ranges for new contractors:
- GL coverage at $100,000 (for monetary limits up to $500,000): $500 to $1,500/year
- GL coverage at $500,000 (for limits up to $1.5M): $1,200 to $3,500/year
- GL coverage at $1,000,000 (for limits above $1.5M): $2,500 to $7,000/year
Workers' compensation premiums are based on your payroll and trade classification. Sole proprietors and LLC members with 20% or more ownership can exempt themselves ($50 filing fee with an active license), which eliminates this cost until you hire employees.
Local Registration Fees
These vary by municipality. Nashville charges a $40,000 Metropolitan Permit Bond and requires $300,000 in general liability. Memphis local business licenses run $15 to $30. Your domicile county's business license costs depend on your gross receipts tier.
Total First-Year Estimate
| Scenario | Estimated Total |
|---|---|
| LLC + surety bond path + reciprocity (no trade exam) | $1,500–$3,000 |
| LLC + CPA reviewed statement + both exams | $2,500–$5,000 |
| Corporation + CPA audit (high monetary limit) | $6,000–$12,000 |
The Tennessee General Contractor License Guide includes a financial pathway worksheet that helps you model both the CPA and surety bond routes against your specific working capital and net worth figures, so you can pick the cheaper path before committing.
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