Colorado Contractor License

Navigating the world of Colorado contractor licensing can be confusing. This is largely because the state only mandates statewide licenses for electrical and plumbing contractors, and everyone else is subject to a variety of municipal licenses, each with their own unique requirements

In this Colorado Contractor License detailed overview, we have broken down everything you need to know into clear sections — from the types of contractor licenses available to the fees and examinations you’ll need to consider.

Whether you’re thinking about becoming a contractor in Colorado or have just begun the initial steps to get licensed, this guide is here to make things easier for you.

Do You Need a Contractor License

In Colorado, not all contractors are required to obtain a specific license. Instead, licensing requirements vary depending on your specific trade and the location you’re based in. We’ve explored these considerations in greater detail below.

General Contractors

Contractors in Colorado are not required to obtain a license at a statewide level unless they work in one of two specialist professions, which are explored in more detail in the next section.

However, since local regions within the state often set their own rules, you’ll likely need to obtain one license or another. The type of work you engage in also plays a significant role in determining the kind of local license you’ll need. Local municipalities in Colorado often categorize licenses into different classes based on the scope and complexity of the projects.

Class A licenses are generally required for contractors handling large-scale projects, Class B for medium-scale, and Class C for small or specialized initiatives.

Electricians and Plumbers

In Colorado, those who aspire to work as electrical or plumbing contractors must secure a state-issued license. This licensure process is governed by the Colorado Department of Regulatory Agencies (DORA), which administers trade-specific exams.

However, state-level licensure is not the only requirement. Electrical and plumbing contractors may encounter further municipal licensing requirements, contingent on the geographic location and scope of their work in specific Colorado municipalities (e.g., getting a supervisor certificate for a Denver contractor license, etc.).

You should make sure to check with the local city or town where you plan to work to find out the licensing rules you need to follow. By complying with both state and local regulations, you’ll be better positioned to operate within the legal and safety guidelines of Colorado.

How to Get a Contractor License in Colorado

Becoming a general contractor in Colorado is relatively straightforward since the state doesn’t mandate a license.

However, if you intend to perform specialized work as a plumber or electrician, there are certain steps your business will need to follow to get licensed. While the specifics of these steps vary between each trade, you will generally need to do the following:

Step 1: Choose Your Business Structure

Before starting the process of becoming a licensed contractor, you’ll first need to decide on the structure of your business. Since this decision will impact your liability, tax obligations, and how you run your business, you must be informed about the details of each structure so that you can effectively determine which one is best suited to your needs.

Many contracting businesses in Colorado, particularly smaller ones, decide to structure themselves as an LLC because it grants them tax flexibility, limited liability protection, and credibility in the eyes of their clients.

Step 2: Meet the Basic Requirements

After forming your business, you’ll need to confirm that you meet the minimum basic requirements. While the specifics of these requirements will vary depending on the license you are trying to obtain, you’ll generally need to:

• Be at least 18 years of age
• Be a US citizen or legally reside in the country
• Have no convictions of a disqualifying offense
• Demonstrate a certain number of hours of on-the-job training and experience. For example, to qualify for the Journeyman Electrician Exam in Colorado, you’ll need to have completed 8,000 hours of electrical work in no less than four years, and at least 4,000 hours must be in commercial or industrial settings

Step 3: Submit an Application

Once you’ve confirmed that you meet the basic requirements of the license your business needs, the next step is to complete and submit the appropriate application form to the relevant regulatory body along with any associated fees.

We’ve explored this in the process of the specialist trades that require a Colorado contractor license application:

• Plumbers: In Colorado, plumbing contractors must be licensed through the Department of Regulatory Agencies’ Division of Professions and Occupations. Multiple categories exist, from residential to master plumber, with each plumbing license having its own set of requirements.
• Electricians: Electrical contractors in Colorado must also be licensed through the Department of Regulatory Agencies. They can apply for various types of licenses, including residential wireman, journeyman, or master electrician, based on specific qualifications and experience hours.

Note: In Colorado, state-issued licenses are mandatory for plumbers and electricians, but keep in mind that local municipalities may impose additional licensing requirements.

Step 4: Pass a Licensing Exam

While not a universal requirement, many contractor licenses in Colorado require applicants to pass a licensing exam in order to qualify. For example, electricians must take an exam administered by PSI after their application has been approved by DORA.

Many candidates struggle with these exams as they will often test both their knowledge of the trade and their understanding of Colorado specific regulations and laws. To avoid this, many applicants take advantage of online study guides and preparatory courses in order to get ready for these exams.

Step 5: Satisfy Insurance Requirements

In order to protect both your business and the client in case of accidents and damages, most contractors in Colorado will need to provide proof of insurance coverage in order to get licensed.

Additionally, many local governments impose additional requirements based on the kind of work a contractor will perform. For example, in the city of Boulder, contractors are mandated to have general liability Insurance with minimum limits of $1,000,000 per occurrence and a $2,000,000 aggregate limit.

Be sure to check the specific insurance prerequisites for the license you’re seeking as well as the surety bond requirements of your local municipality, as these requirements will be unique to each trade and city in Colorado.

Step 6: Keep Your Contractor License Valid

Once you obtain your license, it’s essential to keep it active. This often involves renewing it every few years, paying associated renewal fees, and meeting continuing education requirements.

For example, electrical contractors need to renew their licenses every three years in order to continue offering their services without interruption.

Congratulations! You’ve now successfully obtained the professional license needed to work as a contractor in Colorado. However, your licensing journey doesn’t end here, as there are additional licensing requirements your business will need to satisfy in order to operate legally.

Other Licenses You May Need

Below, we’ve explored the various additional licenses and permits that your Colorado contractor business may need in more detail.

State Business Licenses

While general contractor licenses aren’t required at a state level in Colorado, there are certain state business licenses you may need to obtain before you can get up and running.

For example, since the building materials and services a general contractor provides to clients as part of a construction project are generally taxable, you’ll likely require a sales tax permit.

Additionally, your general contractor business may require an environmental permit from the Colorado Department of Public Health and Environment  if it takes on certain types of projects with the potential to impact the environment.

Note: Registering your contractor business in Colorado comes with various associated fees. You can find a detailed list of these costs on the Colorado Secretary of State’s Business Organizations page to get a clearer picture of your financial obligations.

City and Municipal Licenses

Many local municipalities often impose their own additional requirements that you may have to satisfy for your business to operate legally in that area.

In Boulder, for example, contractors must register with the city to operate legally. As part of this registration, while general contractors don’t need a state-level license, they are subject to the city’s own criteria for issuance of local permits.

Note: Depending on the municipality in Colorado, local contractor requirements can range from passing competency exams to simply filling out paperwork and securing the right permits.