There are multiple requirements and regulations for obtaining an Arizona contractor license. It is a requirement to have a Arizona contractor license if the cost of labor and materials exceeds $1,000 or there is a requirement for a permit. With a limit this low, there is a good chance that you need a license if you are planning to perform contracting work for others. Knowing how to better navigate the application and becoming familiar with the Arizona Registrar of Contractors is helpful.
It is important to know what the application requirements are before you start studying for the exams. This will make the application process much less stressful and allow you to focus on your exam studying. The below list outlines a checklist for getting your commercial Arizona contractor license:
- Designate your Qualifying Party
- Pass the NASCLA Exam – submit NASCLA Exam transcript with application
- Take the AZ Statutes and Rules Training Course and Exam (SRE)
- File a Bond
- Form your entity that you will be performing work under
- Complete a background check
- Provide government issued identification
- Submit proper insurance
- Have four years minimum of experience
- Pay the license fee
What is the NASCLA Exam
The NASCLA exam consists of 23 books and is a 5 ½ hour exam. There are 125 questions on this exam, however only 115 questions count. The remaining 10 questions are potential future test questions. This means that you must get 81 of the 115 counted questions correct to pass with a score of 70%. The exam is open book, so being able to navigate the books is the most important piece to this exam. Having a quality study course is our recommendation, as studying 23 books on your own will not be efficient.
In Arizona, the NASCLA exam can serve as the trades exam to become a commercial B-1 or B-2 licensed general contractor.
The application fee for the NASCLA exam is $35.00. The fee to sit for the exam is $130.00.
Benefits of the NASCLA Exam
The NASCLA exam creates a more universal exam to allow contractors to become licensed in multiple states. Currently, the NASCLA exam is accepted as the trades exam in 16 different states and the U.S. Virgin Islands. If you are planning to get your commercial Arizona contractor license, NASCLA is a fantastic testing option. You must apply for the NASCLA exam, which takes about 7 business days to return. Once receiving your application back, you can schedule your exam through PSI Exams.
The AZ Statutes and Rules Training Course and Exam (SRE)
After passing the NASCLA Exam, you will take the Arizona Statutes and Rules Training Course and Exam (SRE). The SRE course is provided and maintained by AZ ROC. This course is a requirement for new applicants who are not serving as a qualifying party on any other license in Arizona. The SRE is a computer-based training. Applicants will learn applicable statutes and rules and will test on what they learned throughout the training. The AZ Statues and Rules Training Course and Exam (SRE) has a fee of $54.
File a Bond
If you are planning to get your Arizona contractor license you will need to meet the bond requirements. According to the Arizona Registrar of Contractors, the following bonding requirements should be met for a Commercial General Contractor’s License:
- If gross volume is $150,000 or less, a $5,000 bond requirement
- If gross volume is $150,000 to $500,000, a $15,000 bond requirement
- If gross volume is $500,000 to $1,000,000, a $25,000 bond requirement
- If gross volume is $1,000,000 to $5,000,000, a $50,000 bond requirement
- If gross volume is $5,000,000 to $10,000,000, a $75,000 bond requirement
- If gross volume is over $10,000,000 a $100,000 bond requirement
Understand your expected bond limits when you start your company. Having this prepared on the front end will make the application process go more smoothly.
Should I Form an Entity for My Contractor License?
If you are planning to perform your contracting work under an entity, file that before completing the application. You will complete the application as the entity, which will become the Arizona contractor license holder. You will be the qualifier, and your entity will be the Arizona contractor license holder.
The qualifier is the individual that takes and passes the exam and is a member or employee at the entity. Some applicants think that the application can be completed as an individual and then transferred into an entity at a later date. While that can perhaps be the case, re-applying for the license would have to occur and you would have to complete the application all over again as the entity and pay the fees again.
Contractor Background Check
Anyone listed on the license application must complete criminal background check. This is can be done online through AccusourceHR.
Submit Proper Identification
Both the applicant and the qualifying party in the license application will submit a copy of their government issued identification with the application. The Arizona Registrar of Contractors has a helpful list of acceptable forms of identification.
Submit Proper Insurance
To obtain an Arizona contractor license it is a requirement for applicants to be in compliance with the statutes and rules governing workers’ compensation coverage. If you have employees, you must have workers’ compensation insurance. If your entity is a single member or 50/50 with no employees, your entity may be eligible to be exempt from workers’ compensation according to the Arizona Registrar of Contractors License Application.
Pay the Licensing Fee
In Arizona, the application fee for a General Commercial license (B-1 or B-2) is $200.00. The license fee for a General Commercial license (B-1 or B-2)is $580.00. These costs do not include the SRE costs previously mentioned.
Conclusion
Obtaining an Arizona contractor license has great benefits. Whether you are trying to improve your resume or start your own business, getting your contractor’s license in Arizona is a great achievement. If you want to have the ability to perform contracting work for others, pull your own permits, and launch a commercial contracting business having a license is a requirement. Knowing the application requirements and being ready on the front end can really help you when you go to apply. We hope that you found this article helpful as you begin your journey to get your Arizona commercial contractor license. Good luck!