How to Start an HVAC Business in Tennessee (2026)

Last updated: February 25, 2026

Starting an HVAC business in Tennessee requires a contractor license from the Tennessee Board for Licensing Contractors if you take on projects valued at $25,000 or more. The CMC-C (HVAC/Refrigeration) classification covers heating, ventilation, air conditioning, and refrigeration work. You’ll also need EPA Section 608 certification for handling refrigerants, proper insurance, and a solid understanding of Tennessee’s business tax and licensing structure.

Tennessee’s hot, humid summers and cold winters create year-round demand for HVAC services. This guide covers every requirement, cost, and step to legally start your HVAC business in Tennessee.

HVAC Business Requirements in Tennessee at a Glance

Requirement	Agency	Cost	Timeline
CMC-C Contractor License	TN Board for Licensing Contractors	$250 application	After 3 years experience + exams
Trade Exam (HVAC/Refrigeration)	PSI/testing provider	~$75-$100	Schedule after application
Business & Law Exam	PSI/testing provider	~$75-$100	Schedule after application
EPA Section 608 Certification	EPA-approved proctor	$20-$200	Same day (exam)
LLC Formation	Tennessee Secretary of State	$300 (minimum)	2-5 business days
Federal EIN	IRS	Free	Immediate (online)
Workers’ Compensation	Private insurer	Varies	Same day
General Liability Insurance	Private insurer	$1,500-$4,000/year	Same day

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

Step 1: Meet Experience Requirements

The Tennessee Board for Licensing Contractors requires at least 3 years of qualifying HVAC experience before you can apply for a CMC-C license. Qualifying experience includes:

Apprenticeship: Working under a licensed HVAC contractor
Journeyman experience: Hands-on HVAC installation, repair, and maintenance
Trade school: Relevant technical education may count toward the experience requirement (check with the Board for specifics)
Military experience: HVAC-related military training and service

Step 2: Apply for a CMC-C Contractor License

Submit your application to the Tennessee Board for Licensing Contractors:

License classification: CMC-C (HVAC/Refrigeration Contractor)
Application fee: $250
Required documentation:
- Proof of 3+ years qualifying HVAC experience
- Financial statements reviewed or audited by a CPA
- Proof of workers’ compensation insurance
- Proof of general liability insurance
Website: Board for Licensing Contractors
Contact: 615-741-8307

When Is the License Required?

A contractor license with CMC-C classification is required for HVAC/refrigeration projects valued at $25,000 or more (including labor and materials). Projects under $25,000 do not require a state contractor license, but local permits may still apply.

Other HVAC-Related Classifications

Classification	Covers
CMC (General Mechanical Contractor)	All mechanical work including HVAC, plumbing, and piping
CMC-C (HVAC/Refrigeration)	HVAC and refrigeration only (most common for HVAC businesses)
LMC (Limited Mechanical Contractor)	Residential HVAC work only (some limitations)

Step 3: Pass the Licensing Exams

You must pass two exams to get your CMC-C license:

HVAC/Refrigeration Trade Exam: Covers HVAC system design, installation, repair, refrigeration principles, ductwork, and code compliance
Tennessee Business and Law Exam: Covers Tennessee contractor laws, business practices, contract law, lien law, and insurance requirements
Passing score: 73% on each exam
Testing provider: PSI (schedule through PSI after application approval)

Step 4: Get EPA Section 608 Certification

Federal law requires anyone who handles refrigerants to hold EPA Section 608 certification:

Certification Type	Covers
Type I	Small appliances (5 lbs or less of refrigerant)
Type II	High-pressure equipment (most A/C systems)
Type III	Low-pressure equipment (large chillers)
Universal	All equipment types (recommended)

Exam cost: $20-$200 depending on provider
No expiration: EPA 608 certification does not expire
Proctored exam: Must be taken with an EPA-approved proctor

Step 5: Form Your Business Entity

Tennessee LLC: $300 minimum through TNBEAR
Federal EIN: Free from the IRS
Business license: From county/city clerk ($22 minimum)
Sales tax permit: Register through TNTAP

Step 6: Get Required Insurance

Workers’ Compensation

HVAC work falls under the construction industry in Tennessee, which means workers’ comp is required with just 1 employee (not the standard 5-employee threshold).

Purchase from: Private insurance carriers
HVAC contractor rates: Typically $3.00-$6.00 per $100 of payroll
Required before you can get your contractor license

General Liability Insurance

Minimum recommended: $1M per occurrence / $2M aggregate
Cost: $1,500-$4,000/year for HVAC contractors
Required by: The Board for Licensing Contractors as part of the license application

Additional Insurance

Commercial auto: $1,500-$3,000/year for service vehicles
Inland marine (tools/equipment): $300-$800/year
Surety bond: May be required for certain commercial contracts

Step 7: Set Up Operations

Essential equipment and setup for an HVAC business:

Service vehicle: Van or truck outfitted for HVAC work ($20,000-$50,000)
Tools and equipment: Manifold gauges, vacuum pumps, refrigerant recovery machine, multimeter, ductwork tools ($5,000-$15,000)
Software: Dispatching, invoicing, and CRM ($50-$200/month)
Refrigerant stock: Initial inventory of common refrigerants ($500-$2,000)
Local building permits: Needed for most HVAC installations (fees vary by jurisdiction)

Cost to Start an HVAC Business in Tennessee

Item	Cost	Notes
CMC-C license application	$250	Renewal $200 every 2 years
Trade + Business/Law exams	$150-$200	~$75-$100 each
EPA 608 certification	$20-$200	Universal recommended; no expiration
Tennessee LLC formation	$300	Annual report also $300/year
Federal EIN	Free	Apply online at IRS.gov
Business license	$22+	Annual, county/city clerk
General liability insurance	$1,500-$4,000/year	$1M/$2M limits; required for license
Workers’ comp insurance	Varies	Required at 1 employee (construction)
Commercial auto insurance	$1,500-$3,000/year	For service vehicle(s)
Service vehicle	$20,000-$50,000	Van or truck outfitted for HVAC
Tools and equipment	$5,000-$15,000	Gauges, vacuum pump, recovery machine
CPA-reviewed financials	$500-$2,000	Required for license application

Estimated total startup cost: $15,000-$30,000 (solo, already have vehicle) to $50,000-$100,000+ (with new vehicle, full equipment, employees)

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Frequently Asked Questions

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

Yes, if you take on HVAC projects valued at $25,000 or more. You need a CMC-C (HVAC/Refrigeration) license from the Tennessee Board for Licensing Contractors. This requires 3 years of experience, passing trade and business/law exams (73% each), CPA-reviewed financials, and proof of insurance. Projects under $25,000 don’t require a state license, but local permits may apply.

What exams do I need for a Tennessee HVAC contractor license?

You must pass two exams: the HVAC/Refrigeration trade exam and the Tennessee Business and Law exam. Both require a 73% passing score. Exams are administered by PSI. You also need EPA Section 608 certification (separate exam) for handling refrigerants.

Do I need workers’ comp for an HVAC business in Tennessee?

Yes. HVAC work is classified as construction in Tennessee, which means workers’ compensation is required with just 1 employee (not the standard 5-employee threshold). Purchase from any licensed private insurance carrier. Workers’ comp is also required as part of the contractor license application.

What is the EPA 608 certification?

EPA Section 608 certification is a federal requirement for anyone who purchases, handles, or disposes of refrigerants. The Universal certification covers all equipment types and is recommended. The exam costs $20-$200, is administered by EPA-approved proctors, and the certification does not expire.

How much does it cost to start an HVAC business in Tennessee?

A solo operator with an existing vehicle can start for $15,000-$30,000 (license fees, exams, insurance, basic tools). A more established operation with a service vehicle, full equipment, and employees runs $50,000-$100,000+. The contractor license application alone is $250 plus exam fees of $150-$200.

What is the $25,000 threshold for Tennessee HVAC licensing?

Tennessee requires a contractor license for HVAC projects valued at $25,000 or more (including labor and materials). If all your jobs are under $25,000, you don’t need a state contractor license – but you still need EPA 608 certification, proper insurance, and local permits. Most commercial HVAC work exceeds the $25,000 threshold.

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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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