What is a Minnesota contractor license and who needs one?

A Minnesota contractor license for residential work is issued by the Department of Labor and Industry (DLI), Construction Codes and Licensing Division under Minnesota Statutes 326B.805. Minnesota does not issue a single generic general contractor license. Instead it licenses residential construction businesses through four credentials: the Residential Building Contractor License (new construction plus remodeling), the Residential Remodeler License (work on existing structures only), the Residential Roofer License (roofing only), and the Manufactured Home Installer License. The trigger is set by Minnesota Statutes 326B.802: you need a license if you contract directly with a homeowner to build or improve residential real estate by providing two or more of the eight special skills (such as carpentry, masonry and concrete, excavation, or interior finishing). The business holds the license, but it must designate a qualifying person (an owner, officer, member, partner, or managing employee) who passes the DLI exam. There is no prerequisite experience or education to sit the exam. Requirements include liability insurance of $100,000 per occurrence and $300,000 aggregate, a Contractor Recovery Fund payment, and a $180 license fee. The license renews every 2 years with 14 hours of continuing education, and most applicants finish the full path in 2 to 4 months.

Every fact below traces to the DLI residential contractor pages, the DLI CCLD published fee schedule, or Minnesota Statutes Chapter 326B. Verify any figure against the source before you pay a fee.

Who needs a Minnesota contractor license

Per Minnesota Statutes 326B.802, a Minnesota contractor license is required when you contract directly with a homeowner to build or improve residential real estate and your work involves two or more special skills. Residential real estate is a new or existing building constructed for habitation by one to four families, including detached garages. The two-or-more-special-skills test is the heart of the rule: a business that performs work across multiple trades, or coordinates and contracts for that work, is a residential building contractor or remodeler and must be licensed. The business, not the individual owner, holds the license, except that a sole proprietor licenses as an individual.

The eight special skills under 326B.802

Minnesota law defines eight categories of special skills. If your contracts with homeowners combine two or more of these, you cross the licensing trigger:

• Excavation: excavation, trenching, grading, and site grading
• Masonry and concrete: drain systems, poured walls, slabs and footings, masonry walls, fireplaces, veneer, and waterproofing
• Carpentry: rough framing, finish carpentry, doors, windows and skylights, porches and decks, wood foundations, and drywall installation
• Interior finishing: floor covering, wood floors, cabinets and countertops, insulation and vapor barriers, painting, ceramic and marble tile, and prefabricated stairs
• Exterior finishing: siding, soffit and fascia, exterior plaster and stucco, exterior painting, and rain-carrying systems
• Drywall and plaster: installation, taping, finishing, and related painting and wallpapering
• Residential roofing: roof coverings, roof sheathing, weatherproofing and insulation, and repair of roof support systems
• General installation specialties: garage doors, pools and spas, fireplaces, asphalt paving, guardrails, stairs, and solar support systems

Statutory exemptions (narrow)

Per Minnesota Statutes 326B.805, subdivision 6, the licensing requirement does not apply to a defined set of persons. An employee of a licensee performing work for that licensee does not individually need a license. A material supplier furnishing finished products without installing them is exempt. An owner of residential real estate who builds or improves property they occupy or retain for rental, rather than building for resale or speculation, is exempt. Architects and professional engineers in their licensed practice are exempt. A person whose total gross annual receipts for the specialty skills requiring licensure do not exceed $15,000 is exempt. Plumbers, electricians, and other statewide-licensed trades performing their own licensed work are exempt, as are mechanical contractors. A specialty contractor who provides only one special skill is exempt, because the licensing trigger requires two or more skills. School districts, technical colleges, and qualifying nonprofits such as Habitat for Humanity are also exempt.

Residential vs commercial work

The state license covers residential real estate: buildings for habitation by one to four families, including detached garages. Work on commercial buildings such as retail, office, industrial, and larger multi-tenant apartment buildings falls outside the residential contractor scope. Minnesota does not issue a separate statewide commercial general contractor license. Commercial general contracting is governed by the state building code and enforced through the building official in each jurisdiction rather than a separate state commercial credential.

Residential Building Contractor vs Remodeler vs Roofer: which Minnesota contractor license you need

The first decision is which DLI credential fits your work. The licensing requirements are the same across the residential building contractor and remodeler licenses, with only the exam differing. Picking the credential that matches your actual scope avoids paying for a second exam later.

Residential Building Contractor License (BC)

The Residential Building Contractor (BC) license is the broad credential. Per DLI, a building contractor license allows you to perform all the work a remodeler can, plus new construction. This is the license most Minnesota businesses that build new homes or self-perform across multiple trades will pursue. The qualifying person takes the qualifying builder (QB) exam.

Residential Remodeler License (CR)

The Residential Remodeler (CR) license authorizes work on existing structures only. A remodeler cannot contract for new ground-up construction. The qualifying person takes the qualifying remodeler (QC) exam. The remodeler license carries the same insurance, recovery fund, fee, and renewal requirements as the building contractor license.

Residential Roofer License (RR)

The Residential Roofer (RR) license authorizes roofing work only. Per DLI, a roofer license holder cannot contract to install gutters, downspouts, soffits, fascia, or any other type of residential work outside roofing. The qualifying person takes the qualifying roofer (QR) exam. The roofer license does not require a Contractor Recovery Fund payment.

How to apply for a Minnesota contractor license: the 8-step process

Most applicants finish the full path in 2 to 4 months. Exam preparation and assembling the application package are the two longest phases. Every step below references the DLI Construction Codes and Licensing Division process, with statute citations inline so you can verify any requirement directly.

1. Confirm you cross the two-or-more-special-skills trigger

   Map every trade your business contracts for. If your homeowner contracts combine two or more of the eight special skills under 326B.802, you need a license. If you provide only one special skill, or your gross annual receipts for licensable specialty work stay under $15,000, you may be exempt. Confirm the trigger before you spend on the exam and application.

2. Pick your credential: BC, CR, or RR

   Choose the Residential Building Contractor (BC) license if you build new homes or work across multiple trades. Choose Residential Remodeler (CR) if you work only on existing structures. Choose Residential Roofer (RR) if you do roofing only. This single decision sets which qualifying exam you sit and whether you owe the Contractor Recovery Fund fee.

3. Designate your qualifying person

   The business names one qualifying person who is an owner, officer, member, partner, chief manager, or managing employee, and who is actively engaged in the residential contracting business. A managing employee must be a direct employee, not an independent contractor. One person can qualify more than one company only when there is at least 25 percent common ownership among them.

4. Pass the DLI qualifying exam

   Your qualifying person registers for the exam through the DLI iMS portal and pays the exam fee set by DLI. The exam has 110 multiple-choice questions, requires a score of 70 percent or higher, and allows 5.5 hours. Roughly 60 percent of questions cover the Minnesota Residential Building Code, with the rest on the statutes and rules governing residential construction. There are no prerequisite experience or education requirements.

5. Secure your insurance

   Obtain general liability insurance of at least $100,000 per occurrence, $300,000 aggregate, and $25,000 in property damage coverage. If you employ workers, bind workers’ compensation coverage. DLI verifies insurance compliance as part of the license application, so have the certificate ready before you submit.

6. Register your business with the Secretary of State

   File your LLC, corporation, or assumed name with the Minnesota Secretary of State and pull a federal EIN from the IRS. DLI requires a Secretary of State business filing as part of the license application, so complete entity formation before submitting the license package.

7. Submit the DLI application with all fees

   Apply online through the DLI iMS portal. Pay the $180 license fee, the $5 assessment, and, for a building contractor or remodeler license, the Contractor Recovery Fund fee for your gross-receipts tier ($320, $420, or $520). The roofer and manufactured home installer licenses do not carry a recovery fund fee. Attach your exam results, insurance certificate, and business filing.

8. Receive your license and start contracting

   Once DLI approves the file, it issues the license to the business and lists it on the DLI license lookup, where homeowners and building officials confirm a license is current. The license number must appear on your contracts and advertising. From issuance you can pull permits, sign contracts, and bid residential work within your credential.

The DLI qualifying exam: 110 questions, 70 percent to pass

Minnesota administers its own residential contractor exams through DLI rather than a third-party vendor, with sittings in St. Paul and at outstate locations. The qualifying person for the business must pass the exam that matches the license type: the qualifying builder (QB) exam for a building contractor license, the qualifying remodeler (QC) exam for a remodeler license, or the qualifying roofer (QR) exam for a roofer license.

Exam format and scope

The exam consists of 110 multiple-choice questions, requires a score of 70 percent or higher to pass, and allows five and a half hours to complete. Roughly 60 percent of questions relate to the Minnesota Residential Building Code, and the remainder cover the statutes and rules governing residential construction. Candidates are provided two reference books during the exam: the Minnesota State Residential Code, 2020 edition, and the DLI Reference Manual for Residential Building Contractor and Remodeler License Exam. The qualifying builder exam is available in English and Spanish.

Exam fee and retakes

DLI sets the exam fee; confirm the current amount through the DLI iMS portal when you register. There are no prerequisite experience or education requirements to sit the exam. Applicants who do not pass must wait 30 days before applying to retake the exam, and must submit a new application and pay the fee again. Because the open-book reference materials are provided at the test, candidates who study the Minnesota Residential Building Code closely tend to clear the 70 percent threshold on the first attempt.

Insurance, the Contractor Recovery Fund, and workers’ compensation

Minnesota does not require a state-level surety bond for the residential building contractor, remodeler, or roofer license. Instead, the state pairs a liability-insurance requirement with the Contractor Recovery Fund, a homeowner-protection pool funded by license fees. Workers’ compensation is triggered by employing workers.

General liability insurance (statutory minimum)

DLI requires every residential building contractor, remodeler, and roofer to carry general liability insurance of at least $100,000 per occurrence, $300,000 aggregate, and $25,000 in property damage coverage. DLI verifies the certificate as part of the application and at renewal. General liability premiums for solo Minnesota residential contractors typically run $800 to $2,500 per year, depending on revenue and trade specialty, though premium is a market figure rather than a DLI-published number.

The Contractor Recovery Fund

The Contractor Recovery Fund, established by the Minnesota Legislature, compensates homeowners who suffer a direct out-of-pocket loss from a licensed contractor’s fraudulent, deceptive, or dishonest practices, conversion of funds, or failure of performance. Every licensed building contractor and remodeler pays into the fund as part of the license fee. Per Minnesota Statutes 326B.89, DLI may pay a homeowner up to $100,000 per claim, and the total paid against any one licensee is capped at $550,000. The fund fee is set in three tiers by gross annual receipts: $320 if receipts are under $1 million, $420 if receipts are $1 million to $5 million, and $520 if receipts exceed $5 million. The roofer and manufactured home installer licenses do not pay into the fund.

Workers’ compensation

Under the Minnesota Workers’ Compensation Act, an employer must carry workers’ compensation insurance once it has employees, with limited exceptions for certain owners and officers. Sole proprietors with no employees are generally exempt. Contractors who hire their first employee bind coverage before that employee starts work, because gaps trigger state enforcement and personal liability for any work-related injury. DLI confirms workers’ compensation compliance as part of the license file.

Setting up your contracting business in Minnesota

The DLI license is held by a business, so entity formation is a prerequisite, not an afterthought. DLI requires a Secretary of State business filing as part of the license application.

Entity choice and Secretary of State registration

Most Minnesota residential contractors run as a single-member LLC or a Minnesota corporation. The LLC is the most popular structure because it gives liability protection without double taxation. Both register with the Minnesota Secretary of State. A Minnesota LLC files Articles of Organization, and a sole proprietor operating under a trade name files a Certificate of Assumed Name. DLI will not issue a license without a current Secretary of State filing on record, so complete this step before applying.

Federal EIN and Minnesota tax registration

Pull a free EIN from the IRS. Register with the Minnesota Department of Revenue for sales and use tax if your work involves the retail sale of materials. Register with the Minnesota Unemployment Insurance program once you hire your first employee, and bind workers’ compensation coverage before that employee starts.

Local business registration

The DLI license is the statewide qualification, but most Minnesota cities require project-specific building permits, and some require contractor registration on top of the state license. Map local registrations and permit processes for the cities you work in as part of the initial license timeline, not as an afterthought.

Total cost of a Minnesota contractor license in 2026

Most Minnesota applicants complete the full residential building contractor licensing process for a total state-and-exam cost of $550 to $750 at the lowest recovery-fund tier, with another $1,000 to $3,000 for the first year of insurance and optional exam prep. The exact total depends on your recovery-fund tier and whether you retake the exam. The figures below come directly from the DLI CCLD fee schedule.

Mandatory state and exam fees

Contractor Recovery Fund fee by gross-receipts tier

Other initial and ongoing costs

Beyond DLI fees, budget for general liability insurance ($800 to $2,500 per year), optional exam prep materials or a course ($100 to $500), workers’ compensation ($2,000+ per employee per year once you have staff), Secretary of State filing fees ($50 to $155 depending on entity and filing method), and continuing education (14 hours per 2-year cycle). Total estimated initial cost: $550 to $750 in state and exam fees at Tier 1, plus $1,000 to $3,000 in first-year insurance, prep, and registration.

How long it takes to get licensed in Minnesota

Most well-prepared applicants finish in 2 to 4 months. Because Minnesota has no prerequisite course and the exam reference materials are provided open-book at the test, the timeline is shorter than in states that require a 60-hour prelicensure course. The main phases are exam preparation (often 4 to 8 weeks of self-study of the Minnesota Residential Building Code), scheduling and sitting the exam, completing business formation and insurance, and DLI processing of the application. Applicants who fail the exam face a 30-day wait before retaking it, which can add a month or more to the timeline.

2-year renewal and continuing education

A Minnesota residential building contractor, remodeler, or roofer license renews every 2 years, not annually or every 3 years. The qualifying person’s registration is good for two years from the date they passed the license exam and must be renewed every two years. DLI sends a renewal notice ahead of expiration, and the continuing education must be completed before the renewal is filed.

14 hours of continuing education

Per DLI, the qualifying person must complete 14 hours of DLI-approved continuing education to renew the company’s license every two years. At least one hour must relate to the Energy Code, and at least one hour must relate to business management strategies. The remaining hours come from DLI’s approved course list. Continuing education is tracked by the qualifying person, and DLI verifies completion through its course-tracking system before processing the renewal.

Late renewal

Per the DLI CCLD fee schedule, a completed renewal not received by the license expiration date incurs a $90 late fee on top of the renewal and recovery-fund fees. Set a calendar reminder ahead of the 2-year expiration and confirm your address of record in the DLI iMS portal so the renewal notice arrives on time. Letting the license lapse exposes the business to the unlicensed-work penalties below.

Penalties for unlicensed work in Minnesota

Contracting as a residential building contractor, remodeler, or roofer without the required license carries real consequences in Minnesota. Per Minnesota Statutes 326B.805, no person required to be licensed may act or hold themselves out as a residential building contractor, remodeler, roofer, or manufactured home installer for compensation without a DLI license.

DLI enforces the requirement two ways. Under Minnesota Statutes 326B.082, the commissioner may issue an administrative monetary penalty of up to $10,000 for each violation, plus a separate $1,000 penalty for each day a person obstructs or fails to cooperate with an investigation. Under Minnesota Statutes 326B.845, an individual who violates a commissioner’s order, or who is the manager, officer, or director of a person that violates such an order, is guilty of a gross misdemeanor (carrying a maximum fine of $3,000 and up to 364 days in jail under Minnesota Statutes 609.0342 and 609.03). An unlicensed person who knowingly contracts for licensable work also has no right to claim a mechanic’s lien, so the unlicensed contractor cannot enforce a lien to collect for the work.

Common reasons DLI delays or denies a license application

DLI reviews every application and holds or denies a meaningful share at first submission. Most issues cluster around a few recurring problems. Knowing them upfront saves a processing cycle and a refile.

1. Qualifying person does not meet the role test. The qualifying person must be an owner, officer, member, partner, chief manager, or managing employee actively engaged in the business. Naming an independent contractor or an outside consultant as the qualifying person is a denial. A managing employee must be a genuine employee of the company.
2. Exam not passed for the credential requested. The qualifying builder (QB), remodeler (QC), and roofer (QR) exams are credential-specific. An applicant who passed the remodeler exam cannot use that score to obtain a building contractor license. Sit the exam that matches the license you intend to hold.
3. Insurance certificate below the statutory minimum. DLI requires liability coverage of at least $100,000 per occurrence, $300,000 aggregate, and $25,000 property damage. A certificate that shows lower limits, lists the wrong named insured, or has lapsed triggers an application hold until corrected.
4. Wrong recovery-fund tier or missing fund payment. Building contractor and remodeler applicants must pay the Contractor Recovery Fund fee for the correct gross-receipts tier ($320, $420, or $520). Selecting the wrong tier or omitting the payment holds the application. Roofer applicants who add the fund fee in error also create a processing mismatch.
5. No Secretary of State business filing on record. DLI requires a current Secretary of State filing for the business entity. Applications submitted before the LLC, corporation, or assumed-name filing is active are held until the filing posts.
6. Incomplete application package. Common missing items include the exam result, the insurance certificate, the correct fees, and the business filing reference. Submitting through the DLI iMS portal with every element attached avoids the back-and-forth that stretches the timeline.

Local jurisdiction rules across Minnesota

The DLI license is the statewide qualification, but every Minnesota city issues its own building permits and some require local contractor registration on top of the state credential. No Minnesota city issues a separate residential building contractor license that competes with the state credential, but cities pull their own permits, run their own inspections, and can require local registration.

Plan local permitting as part of the initial license timeline. The Twin Cities metro is the most fragmented, so a contractor crossing Minneapolis, St. Paul, and the surrounding suburbs may pull permits through many separate building departments. In parts of greater Minnesota, DLI itself serves as the building official, so confirm who issues permits in each city before you bid.

Common pitfalls to avoid

Beyond denial reasons, four pitfalls trip up licensed firms during day-to-day operations:

• Contracting without a license. Acting as a residential building contractor, remodeler, or roofer without a DLI license exposes the business to an administrative penalty of up to $10,000 per violation under 326B.082, a gross misdemeanor for violating a commissioner’s order under 326B.845, and the loss of any mechanic’s lien right. The downside dwarfs the $180 license fee.
• Doing new construction on a remodeler license. The remodeler (CR) license authorizes work on existing structures only. Building new homes on a remodeler license is a scope violation. Hold the building contractor (BC) license before taking new-construction work.
• Letting the qualifying person lapse. The license depends on a named qualifying person who has passed the exam and keeps continuing education current. If that person leaves, the company must name a replacement who meets the role test and exam requirement, or the license cannot be renewed.
• Letting continuing education lapse before renewal. The qualifying person must complete 14 hours per 2-year cycle, including the Energy Code hour and the business-management hour. A licensee who misses the hours cannot file renewal and falls into late-renewal status with the $90 fee. Track hours across the cycle rather than scrambling at the deadline.

Bottom line

Most Minnesota contractors land on the Residential Building Contractor license because it covers new construction plus the full remodeling scope, while remodelers and roofers use the narrower CR and RR credentials. The trigger is the two-or-more-special-skills test under 326B.802: contract directly with a homeowner across two or more of the eight special skills and you need a license. The path is the same across credentials: designate a qualifying person, pass the 110-question DLI exam at 70 percent, carry $100,000/$300,000 liability insurance, pay the $180 license fee plus the Contractor Recovery Fund tier ($320 to $520), and file with the Secretary of State. Plan 2 to 4 months, budget $550 to $750 in state and exam fees at Tier 1 plus first-year insurance, and renew every 2 years with 14 hours of continuing education. Get the credential right the first time and you hold a license that works in every Minnesota county.

Resources and next steps

Bookmark these for the application, renewal, or compliance questions:

• DLI Residential Contractor Licensing — application, forms, license requirements
• DLI Who needs a license — the two-or-more-special-skills rule and exemptions
• DLI contractor, roofer and remodeler exams — exam format and scheduling
• DLI CCLD fee schedule — current license, exam, and recovery-fund fees
• Contractor Recovery Fund — how the fund works
• Minnesota Statutes 326B.802 — definitions and the eight special skills

For a state-by-state overview, see our national general contractor license guide. For a comparison to a course-and-exam state, see our Michigan contractor license guide.