Getting a general contractor license in Texas isn’t a straightforward process. While licensure for some specialty contractors is handled at the state level, general contractor licenses don’t have a statewide requirement. Instead, licenses are issued at the local level — and you might not need one at all.
Figuring out if you need a license and navigating the red tape can be confusing. Here is a guide to help you get your Texas general contractor business going.
In this article, we’ll cover:
- Who needs a Texas contractor license?
- What cities require general contractor licenses
- Getting your contractor’s license in Texas
- Renewing your contractor’s license
- General contractor license reciprocity in Texas
- General contractor insurance requirements in Texas
Who needs a Texas contractor license?
Texas general contractors have various licensing requirements based on the type of work that they do. Your first step is to determine which category you will be working in and how you will get a contractor’s license if one is required.
Handypersons, builders and home improvement specialists
If you want to take the handyman, builder, or home improvement route, you’re in luck. State regulators in Texas do not require you to have a general contractor license. However, that’s just at the state level — you will need to check handyperson and contractor license requirements in your city to know if one is required.
Also, be prepared to apply for your Texas Business License. In Texas, business licenses are required for general contractors before they can do anything else. Depending on your business structure, you may need to file on a state or county level.
Electricians, plumbers and HVAC technicians
You must apply for a specialized contractor license if you plan to work in any of these trades as a secondary service. Each type of license has different requirements, which are determined by the Texas Department of Licensing and Regulations.
For electricians in Texas, there are many different types of individual electrical contractor licenses. These range from Electrical Apprentice to Master Electrician to Residential Appliance Installer.
Regardless of the type of service, you will need to register with the Texas Licensing and Regulations board. Each license has minimum requirements for the number of hours of on-the-job training, as well as a passing score on the electrician exam.
Once you submit proof of your experience (if required) and your application to the licensing board, you will be sent information on how to take the exam.
Plumbing contractor licenses in Texas fall into four categories:
- Tradesman plumber-limited
- Plumbing inspector
To obtain your license in this trade, you must meet the requirements of the Texas State Board of Plumbing Examiners, including a minimum number of hours of experience, educational courses, and a passing score on the required examination. After passing the exam, you can apply online for your license.
Texas has two types of HVAC contractor licenses: Class A and Class B. With a Class A license, you can work on any size HVAC unit. If you hold a Class B license, you’re limited to cooling systems of 25 tons and under and heating systems of 1.5 million BTUs/hour and under.
To qualify for either license, you must have a minimum of 48 months of work or educational experience or pass the Air Condition and Refrigeration exam after working under a licensed contractor’s supervision for 24 months.
Some Texas cities require general contractor licenses
Even though a state license is not required for all general contractors, you might need to apply for a license through your local municipality. Go to your local city and search for “general contractors licenses” to determine the general contractor license requirement in your city.
The requirements vary by city. Here is what that might look like in bigger metropolitan areas:
If you are doing contracting work in Austin, you must apply for a general contractor permit before doing work. You may also need to obtain a project-based permit, though not all projects require a permit in Austin. Your general contractor permit application from the City of Austin Development Service Department can ask for information such as:
- The scope of work
- The project address
- Your building permit numbers
- A detailed description of the project
The City of Dallas requires you to file an application for contractor registration based on the license type you need. General contractor work includes residential and commercial general contracting, roofing, fencing, foundation, demolition, and pool contracting.
Houston doesn’t have a general contractor license, so you don’t need to worry about licensure requirements. However, you will need permits on a job-by-job basis. The Houston Permitting Center has a project planner to help you figure out which permit you will need.
For general contract work in San Antonio, you’ll need to register with Development Services to obtain an initial license or renew an existing one before obtaining any permits.
Different types of work can require different registration application forms and license fees. For example, the home improvement contractor form (for limited repair work) is separate from the residential building contractor application (for more extensive construction work).
If you are applying as a residential building contractor, you will also need a certificate of liability insurance.
Getting your contractor’s license in Texas
Even though there isn’t a one-size-fits-all Texas general contractor license, a few similarities exist between different jurisdictions. Your first step is to determine what type of work you’ll do. If your work will include electrical, HVAC, or plumbing, you’ll need to obtain a license from the state.
You may also need to register as a business entity. Plumbing contractors are usually exempt from this requirement, but all other contractors can use the SOSDirect Business Services Portal to register their business.
Government-issued identification and a criminal background check may also be required. Because regulations can vary by location, check with your local licensing authorities to ensure you meet the requirements in your area.
Renewing your contractor license
The state of Texas doesn’t require general contractor licenses, so there’s no need for renewal at the state level. If your local municipality requires you to become licensed, you’ll need to follow their renewal guidelines to keep your license up to date.
General contractor license reciprocity in Texas
Many states recognize general contractor licenses issued by other states. This type of reciprocity means that you can obtain a contractor's license in a different state without taking another examination. However, it isn’t available in Texas — Texas doesn't have a reciprocity agreement with any other state.
General contractor insurance requirements in Texas
Before starting your general contracting business in Texas, you will want to make sure you have met the general contractor insurance requirements.
General Liability insurance
In most cases, Texas general liability insurance is recommended to protect against bodily injury, property damage and defamation. Some government agencies and clients will require coverage before you start a job.
Workers’ Compensation insurance
Workers’ compensation insurance can help cover lost wages and medical bills when an employee gets hurt on the job. Unlike other states, Texas doesn’t require workers' comp insurance in most cases. Some contractors can require their subcontractors and independent contractors to have coverage, and you’ll likely need it if you contract with a government entity.
Tools and Equipment insurance
Contractor jobs require expensive tools and equipment. If your gear is damaged or stolen, tools and equipment insurance can help pay for repairs and replacements.
Commercial Auto insurance
If you have a business-owned vehicle, Texas requires you to have commercial auto insurance. Personal auto insurance policies don’t cover damages that happen when using a personal vehicle for business purposes.
Texas vehicles are required to have a minimum amount of auto liability coverage. These liability limits are $30,000 in bodily injury liability per person, $60,000 in bodily injury liability to more than one person and $25,000 in property damage per accident. (Also called 30/60/25 coverage.)
Commercial Property insurance
Texas doesn’t require you to carry commercial property insurance, but it’s crucial coverage for most businesses. It covers damage or theft of property and can cover lost income if you can’t operate your business because of a disaster.
How to NEXT protects general contractors
NEXT offers business insurance in Texas tailored to meet your needs. It typically takes less than 10 minutes to purchase a policy online, and you’ll be able to share your digital certificate of insurance instantly from your mobile device or computer.
Do you have projects in a different U.S. state? Visit our summary of general contractor license requirements in every state.