Contractor License Requirements: What Every State Requires

There's no federal contractor license

Contractor licensing is the most inconsistent regulatory area I've come across in researching permits across all 50 states. California has a strict state board with exams and bonding. Texas doesn't have a state-level general contractor license at all. The rules vary enormously, and getting it wrong means fines, voided contracts, or criminal charges.

If you're starting a contracting business or expanding into a new state, the first question is simple: does your state even have a state-level license?

States with mandatory state-level contractor licenses

These states require general contractors and most specialty contractors to hold a state-issued license:

California

The Contractors State License Board (CSLB) is one of the strictest in the country. Requirements:

4 years of journeyman-level experience
Pass a written trade exam and a law/business exam
Contractor's bond: $25,000
License fee: $450 (initial), $450 (biennial renewal)

Operating without a license in California is a misdemeanor with fines up to $15,000 per violation.

Florida

The Construction Industry Licensing Board issues state-certified licenses. Requirements:

4 years of experience (or a combination of education and experience)
Pass a business and finance exam plus a trade exam
Proof of workers compensation and general liability insurance
License fee: approximately $249 to $399

North Carolina

The NC Licensing Board for General Contractors requires a license for any project over $30,000:

Pass a written exam
Demonstrate financial responsibility
License fee: $125 to $275

Michigan

Residential builders and maintenance/alteration contractors must be licensed by the state. Requires an exam, $185 license fee, and ongoing continuing education.

States with no state-level general contractor license

These states don't issue a state contractor license. Instead, licensing is handled at the city or county level:

Texas: No state general contractor license. But specific trades (plumbing, electrical, HVAC) do require state licenses. General contractors are licensed by individual cities. Houston, Dallas, and San Antonio each have their own requirements.
New York: No state general contractor license. New York City requires a license for general contractors, home improvement contractors, and specific trades. Outside NYC, requirements vary by municipality.
Pennsylvania: No state contractor license. The Home Improvement Contractor Registration Act requires registration ($50) for residential work, but it isn't a full license with exams.
Ohio: No state general contractor license. Columbus, Cleveland, and Cincinnati each have their own licensing requirements.

Other permits contractors need

Beyond the contractor license itself, most contractors need:

General business license: From your city or county. $50 to $500.
Trade-specific licenses: Electrical, plumbing, and HVAC work almost always requires a separate trade license, even in states without a general contractor license.
Bonding: Many states and municipalities require a surety bond. Amounts range from $5,000 to $25,000 for general contractors.
General liability insurance: Required by law in many states. Even where it isn't legally required, most commercial and government clients won't hire you without it. Minimum coverage: typically $500,000 to $1,000,000.
Workers compensation insurance: Required in every state if you have employees (with very few exceptions).
Building permits: You pull these per project, not per year. Fees are typically 1% to 2% of the project cost.

What happens if you work without a license?

Penalties for unlicensed contracting vary by state but can be severe:

California: Misdemeanor. Up to $15,000 fine per violation. Customer can recover all money paid to you.
Florida: First offense is a first-degree misdemeanor (up to $1,000 fine, 1 year in jail). Repeat offenses are felonies.
Georgia: Misdemeanor. $1,000 fine and up to 12 months in jail.

Beyond criminal penalties, unlicensed contractors can't enforce contracts in court in many states. If a customer refuses to pay, you may have no legal recourse.

Check before you start

Contractor licensing is a mess of overlapping rules. What applies in one state, or even one city, doesn't apply in the next. And letting a license expire is worse than you think — read about the hidden costs of an expired license.

For the full picture on what permits a contracting business needs beyond the license itself, see our permits vs licenses explainer. And use a permit tracker to stay on top of renewals.

Use the free permit checker to see what licenses and permits your contracting business needs in your state and city.