How to Start an HVAC Business in Michigan (2026)

Last updated: February 25, 2026

Michigan requires a state-level Mechanical Contractor license to perform HVAC work, issued through LARA’s Bureau of Construction Codes. With harsh winters driving year-round demand for heating services and growing AC demand in summer, Michigan is a strong market for HVAC businesses – but the licensing path requires at least 3 years of experience and a state exam.

This guide covers every requirement, from the mechanical contractor license to EPA certification, insurance, and the costs to get your Michigan HVAC business up and running.

HVAC Business Requirements in Michigan at a Glance

Requirement	Agency	Cost	Timeline
LLC Formation	LARA Corporations Division	$50	5-10 business days
Federal EIN	IRS	Free	Immediate (online)
Mechanical Contractor License	LARA Bureau of Construction Codes	$300	Varies (after exam)
EPA 608 Certification	EPA-approved testing center	$150-$200	1 day
Workers’ Compensation	Private insurer	Varies by payroll	Same day
General Liability Insurance	Private insurer	$1,500-$3,000/year	Same day
Commercial Auto Insurance	Private insurer	$2,000-$4,000/year	Same day

How to Start an HVAC Business in Michigan (Step by Step)

Step 1: Get Your Experience

Michigan requires a minimum of 3 years of work experience under a licensed Mechanical Contractor before you can apply for your own license:

Full path: 3 years working under a licensed Mechanical Contractor in Michigan
Trade school credit: A formal HVAC diploma, certificate program, or 2-year degree from a community college, vocational/trade school, or university can count toward 1 of the 3 required years
Minimum age: 18 years old
Education: High school diploma or GED required

Step 2: Pass the State Exam

After meeting experience requirements, you must pass a state exam:

Exam administrator: PSI (Psychological Services Inc.)
Passing score: 75% or higher
Exam content: Covers the Michigan Mechanical Code, HVAC system design, installation practices, safety, and applicable regulations
Classification: You must pass an exam for each classification you seek (heating, cooling, refrigeration, process piping, etc.)
Exam fee: Included in the application process

Step 3: Get Your Mechanical Contractor License

Apply through LARA Bureau of Construction Codes:

Application fee: $300
License type: Mechanical Contractor License
Renewal: Every 3 years
Continuing education: Required for license renewal
The license authorizes you to pull mechanical permits and perform HVAC work throughout Michigan

Step 4: Get EPA 608 Certification

Federal law requires EPA Section 608 certification to purchase or handle refrigerants:

Type I: Small appliances (under 5 lbs of refrigerant)
Type II: High-pressure appliances (most residential AC and heat pumps)
Type III: Low-pressure appliances (large commercial chillers)
Universal: All types – recommended for HVAC business owners
Cost: $150-$200 for the exam
Valid: Does not expire (one-time certification)

Step 5: Form Your Business Entity

Step 6: Get Insurance

General Liability Insurance

Cost: $1,500-$3,000/year for HVAC contractors
Typical limits: $1M per occurrence / $2M aggregate
Covers: Property damage, bodily injury, completed operations

Workers’ Compensation

Required if meeting Michigan’s employee thresholds. HVAC work carries higher workers’ comp rates due to physical risks (working at heights, electrical exposure, heavy equipment).

Commercial Auto Insurance

Cost: $2,000-$4,000/year for service vehicles
Michigan’s no-fault system results in higher auto insurance rates than most states
Commercial vehicle coverage is required for any trucks used in your business

Tools and Equipment Insurance (Inland Marine)

Covers your tools, gauges, recovery machines, and other equipment if stolen or damaged. Typically $300-$600/year.

Step 7: Register for Taxes and Start Operating

Sales tax: HVAC repair services are generally exempt from Michigan sales tax, but sales of tangible parts and equipment are taxable at 6%. Register through Michigan Treasury Online
Mechanical permits: You must pull a mechanical permit for each installation or major repair job from the local building department
Local permits: Check with your city for any local contractor registration requirements

Cost to Start an HVAC Business in Michigan

Item	Cost	Notes
Michigan LLC formation	$50	Annual statement $25/year
Federal EIN	Free	Apply online at IRS.gov
Mechanical Contractor license	$300	Renewal every 3 years
EPA 608 certification	$150-$200	One-time (does not expire)
General liability insurance	$1,500-$3,000/year	Higher for HVAC contractors
Workers’ compensation	Varies	Based on payroll and classification
Commercial auto insurance	$2,000-$4,000/year	Michigan no-fault system
Tools and equipment insurance	$300-$600/year	Inland marine policy
Service vehicle	$25,000-$50,000	Used cargo van or truck
Tools and equipment	$5,000-$15,000	Gauges, recovery machine, hand tools
Initial inventory (parts)	$2,000-$5,000	Common replacement parts

Estimated total startup cost: $15,000-$30,000 (solo operator with existing vehicle) to $50,000-$80,000+ (with new vehicle, full inventory, employees)

Related Michigan Business Guides

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Frequently Asked Questions

Do I need a license to start an HVAC business in Michigan?

Yes. Michigan requires a Mechanical Contractor License from LARA’s Bureau of Construction Codes. You need at least 3 years of experience under a licensed contractor, must pass a state exam (75% to pass), and pay a $300 application fee. You also need EPA 608 certification to handle refrigerants.

How much experience do I need for a Michigan HVAC license?

You need a minimum of 3 years of full-time work experience under a licensed Mechanical Contractor. A formal HVAC diploma or certificate program can count toward 1 of the 3 required years. You must also be at least 18 and have a high school diploma or GED.

Is HVAC work taxable in Michigan?

HVAC repair labor is generally exempt from Michigan’s 6% sales tax. However, the sale of tangible parts, equipment, and materials is taxable. New installation work may also be treated differently. Consult the Michigan Department of Treasury for specific scenarios.

How much does HVAC insurance cost in Michigan?

General liability runs $1,500-$3,000/year for HVAC contractors. Commercial auto insurance is $2,000-$4,000/year (higher in Michigan due to no-fault system). Tools/equipment insurance (inland marine) adds $300-$600/year. Workers’ comp varies based on payroll.

Do I need a mechanical permit for every HVAC job in Michigan?

You need a mechanical permit from the local building department for installations and major repairs. Minor service work and maintenance typically don’t require a permit. Only licensed Mechanical Contractors can pull mechanical permits in Michigan.

What EPA certification do I need for HVAC in Michigan?

You need EPA Section 608 certification to purchase and handle refrigerants. Type II covers most residential systems, but Universal certification (all types) is recommended for HVAC business owners. The certification costs $150-$200 and does not expire.

More Michigan Business Guides

About the Author

Robert Smith has run a licensed private investigation firm for 8 years from the Florida-Georgia state line - where he learned firsthand how wildly business licensing rules differ between states just miles apart. He personally researched requirements across all 50 states and D.C., reviewing hundreds of government sources over hundreds of hours to build guides he wished existed when he started. Not a lawyer or accountant - just a business owner who has done the research so you don't have to.

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