Understanding Multi-State Licensing for Contractors

Published on August 12, 2021 by Betty White

BLD – 8.12.2021 Blog

If you want to work in the construction industry, you have to obtain a license to do so legally in most states. So, once you get licensed in your home state, you may think that you can also work in other states. Unfortunately, this is not the case because the license doesn’t transfer from state to state. In fact, most states will require you to get a permit again, even if you have one in your home state. That is multi-state licensing for contractors.

However, things don’t get much simpler once you realize that your license will likely be invalid in a different state. And if you want to remain within legal boundaries, you will soon realize that every state has a different set of education and experience requirements. You will have to meet those conditions if you want to obtain a license there. Still, multi-state licensing for contractors is possible, which is good news. But you will have to do some digging. 

While some states will require you to take an exam, others will offer a license through something called reciprocity. If you hold a license in one state, reciprocity may allow you to avoid taking an exam in another state. But, you still have to meet specific requirements. Also, you have to know that not all states will allow obtaining a license through reciprocity. 

The great news is that Builders License Training Institute can help you get the necessary training and obtain the license you need.  

What is Reciprocity?

Reciprocity is used to refer to a reciprocal license agreement between two states. If two states have such an agreement, their respective licensing boards agree to recognize the license issued by the other state. However, it is crucial to note that even if there is a reciprocity agreement between two states, it doesn’t mean that all contractors will be recognized. That is because there are different license types.

For example, Arizona and California have a reciprocal license agreement. Suppose you have a license code A-21 issued in Arizona, a license for Landscaping and Irrigation Systems. In that case, California will accept it and perceive it as equal to its Landscaping license code C-27. So, if you get contracted to perform any type of work that doesn’t fall within the C-27 code, you will not be legally allowed to do it.

What is multi-state licensing for contractors?

Here is a good example of what could be a multi-state license for contractors. Besides Arizona, California has a reciprocity agreement with Nevada, Utah, and Louisiana. So, if you obtained a license in California, you would actually have a multi-state license for contractors. Of course, it will not happen automatically, as there are no guarantees. Again, it depends on the type of license you have.

So, the licensing board may decide that you have to take a complete exam before they grant you a license. What is more, even if you meet the necessary standard, the board may still require you to take the exam.

How do you qualify for reciprocity?

As you may have already guessed, there are no guarantees for anything. A reciprocity agreement between your home state and the state you want to work in makes your chances only so much better. 

Firstly, you have to understand that such an agreement doesn’t allow you to move to a new state and simply start working. The only thing reciprocity does for you is creating a shortcut to getting licensed in another state. Each state has its own set of requirements, and you have to do your due diligence and research what they are.

Let’s stay with California as a good example. If you decide to move there from Arizona, given the reciprocal agreement between them, you will have to prove you have had your license for a minimum of five years. Also, you will have to provide proof that your home state confirms that status. And that is not it. While you won’t have to take the full exam, you will have to take the business management part of it. 

On the other hand, if you decide to move from Illinois, the requirements will be entirely different. So, put a break on contacting golansmoving.com and scheduling your move for a bit. Make sure you have all the information first. Also, don’t think that once you gain reciprocity in one state, you can use it to get it in a third one. 

Well, actually, you can do that. But only in Mississippi. 

Always do your research

Once you know which state you want to work in, the best thing to do is go to the website of its licensing board. There, you will see if there is a reciprocal agreement between your home state and the one you have in mind. Also, that will be the best source of information for your options. 

It’s essential to be well-informed about these things. For example, if you are a general contractor and you have your heart set on Maine, you are in luck. General contractors don’t need a license to work there. However, if you are a plumber or an electrician, you will need to obtain adequate permits before you can work in Maine. 

In general, it is wise to get a license wherever you are, not only for legal reasons. Homeowners are often advised to choose licensed contractors instead of unlicensed ones. Moreover, having a license means that you have passed all the necessary exams and obtained the required certifications. That further suggests that you are a competent professional. Ultimately, a license boosts your credibility, especially at times when there is a shortage of skilled labor.

The bottom line

As you can see, there are no guarantees or one-size-fits-all answers to the question on multi-state licensing for contractors. Having a license in your home state proves your professional competence. Then, that license may earn your reciprocity if your state and the one you want to go to have such an agreement. Still, reciprocity also has limitations, and different states require different standards to be met. Your safest bet is to do thorough research on what the state you plan to go to demands. Only then will you know how to proceed.