Working Across State Lines

Some of the most interesting questions, or strange twists, on contractors licensing law come to me from contractors interested in working across state lines. While California has its own comprehensive and complex rules for contractors, other states add their own unique requirements you need to know before you bid across the border…

Q. I am licensed in California and applying for a contractor’s license in Arizona. One of their licensing requirements is securing a Transaction Privilege Tax (TPT) Number. Is there an alternative to posting the required bond? Can the estimated tax be paid up front in lieu of a bond?

A. This is a very interesting question. Arizona does have a “License Application For Bond Exemption”, however, it may be very difficult to meet the State’s strict exemption guidelines. Specifically, an applicant would need to submit a “letter of good standing verifying timely payment of all sales AND transaction privilege taxes from another state…” Since California does not have a TPT, complying is easier said than done.

As I had indicated in a column a few years ago, Arizona may also consider issuing a TPT number if the applicant pre-pays ALL taxes that will be owed. In many instances this is a problem since it’s difficult to know the full extent of work to be performed. However, if you know your company will only be working on one job per year, and the tax owed can be calculated, this “pre-payment” might be a good option.

Q: I currently hold a “C-7″ and “C-10″ license in Calif. We install residential wiring, Fire alarm and voice/data communications cabling. Will Nevada consider me for a waiver of any exam?

A: The Nevada Contractors License Board will require a trade exam for all the work you describe. The “C-2″ Electrical classification (and the 7 subclasses such as “C-2C” “fire detection”) does not fall under California’s reciprocity agreement with Nevada.

Q. We are applying for a new contractor’s license in California and Nevada and want two people to take the test (in case one fails to pass). Can we do this on one application?

A. I have been asked this on several occasions and the answer is, Yes for Nevada, No for California. Nevada will allow a corporation to file one application and list two (or even three) qualifiers. For instance, you can have one person qualify the trade portion while a second employee or officer takes the business management exam. You can even designate a third person to be the “back-up” for both the law and trade.

The same thing in California would take two applications; however, it may not accomplish your goal. Let’s say you file the first corporate application listing the #1 qualifier and all officers. The second applicant would then apply for an inactive sole owner’s license as a “back-up”. If the first qualifier fails and the second qualifier passes, you cannot switch qualifiers on the main application. You would need to start over by withdrawing the first application and filing a second corporate application listing the person who passed.

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