Illinois HVAC license requirements and insurance

Who it applies to

1Who needs a heating and air conditioning license in Illinois? What is this?

General Contractor license (Chicago): chicago has no heating and cooling license. A heating or cooling permit has to name a licensed general contractor, so an HVAC business that deals with the owner directly needs this license. An HVAC business working as a subcontractor under a licensed general contractor does not

License	Who needs it	What it covers
No state HVAC license	Nobody at state level. There is no state exam, no state fee and no state license number for heating and cooling work in Illinois	Whatever your city or village allows. Some towns license HVAC contractors, some only ask for a permit and proof of insurance, and some ask for nothing
General Contractor license (Chicago)	Chicago has no heating and cooling license. A heating or cooling permit has to name a licensed general contractor, so an HVAC business that deals with the owner directly needs this license. An HVAC business working as a subcontractor under a licensed general contractor does not	Five classes, set by the value of the whole project. Class E up to $500,000. Class D up to $4 million. Class C up to $10 million. Class B up to $20 million. Class A with no limit

License

Who needs it

What it covers

No state HVAC license

Nobody at state level. There is no state exam, no state fee and no state license number for heating and cooling work in Illinois

Whatever your city or village allows. Some towns license HVAC contractors, some only ask for a permit and proof of insurance, and some ask for nothing

General Contractor license (Chicago)

Chicago has no heating and cooling license. A heating or cooling permit has to name a licensed general contractor, so an HVAC business that deals with the owner directly needs this license. An HVAC business working as a subcontractor under a licensed general contractor does not

Five classes, set by the value of the whole project. Class E up to $500,000. Class D up to $4 million. Class C up to $10 million. Class B up to $20 million. Class A with no limit

Who runs it

2Who issues HVAC contractor licenses in Illinois? What is this?

No state agency. Illinois does not license heating and air conditioning contractors. Your city or village decides whether you need a license issues HVAC licenses in Illinois.

See how this compares in every state: How to check a contractor's license, state by state

Name	No state agency. Illinois does not license heating and air conditioning contractors. Your city or village decides whether you need a license
Website	idfpr.illinois.gov
Does the state license this trade?	None. The Department of Financial and Professional Regulation's list of licensed professions has no heating, air conditioning, refrigeration or mechanical trade on it. The Department of Public Health licenses the plumbing trades, meaning plumbers, apprentice plumbers, plumbing contractors, plumbing inspectors and irrigation contractors, and nothing for heating or cooling
City rules	Chicago has no heating and cooling license. It asks for a licensed general contractor on the permit instead, and that license is below. Many suburbs run their own contractor licenses and permits. Ask the building department in every town you work in before you quote a job

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Getting licensed

3How to become an HVAC contractor in Illinois What is this?

Illinois has 2 licenses that matter to an HVAC contractor: No state HVAC license, General Contractor license (Chicago). Each is below, with what you need before you apply.

License	Experience required	Exam
No state HVAC license	—	—
General Contractor license (Chicago)	None listed by the city	None listed by the city

License

Experience required

Exam

No state HVAC license

—

General Contractor license (Chicago)

None listed by the city

What it costs

4How much does an HVAC license cost in Illinois? What is this?

The government fees on this page add up to about 0 in Illinois. Add insurance, tools, and a vehicle to get the real number.

License	First license	Renewal
General Contractor license (Chicago)	$300	$300

License

First license

Renewal

General Contractor license (Chicago)

$300

Added up

Government fees, added up	0

No state license fee, because there is no state license. In Chicago the smallest general contractor license costs $300 a year. Other towns charge their own fees. Does not include the EPA Section 608 test, insurance, tools or a vehicle

Our estimate

Insurance

5How much HVAC insurance do you need in Illinois? What is this?

The least liability insurance Illinois lets an HVAC contractor work with is $100,000 for injury and $50,000 for property damage. Most customers ask for more. Workers' comp is required from the first employee.

Minimum liability insurance	$100,000
Type of policy	Public liability and property damage insurance. $100,000 per person and $300,000 per occurrence for injury, plus $50,000 per occurrence for property damage. Since 2001 you also need $10,000 per occurrence of cover for work that turns out not to meet the building code
Minimum liability insurance (injury)	$300,000
Minimum liability insurance (property damage)	$50,000
Who this applies to	Anyone in the business of home repair or remodeling, which the law says includes central air conditioning, central heating, boilers and furnaces on any home. A home here means one of six units or fewer. Building a new home is outside the law altogether, and so are repairs to a building with more than six units. Maintenance, servicing and repairs under $500 are outside it too, but an improvement or an addition is covered whatever it costs. A business with a net worth of at least $1,000,000 shown in financial statements less than 13 months old can self-insure instead
Who must be named on the certificate	Nobody. No state office collects the certificate, because there is no state license. The law just requires you to hold the cover. Your city may ask to see it before it issues a permit
Workers' comp required?	Yes
Workers' comp: what to know	Illinois puts construction, and the erecting, maintaining, remodeling or altering of any structure, on the list of work that is covered automatically. The day you hire anyone you must carry workers' compensation insurance or be approved to self-insure.
Who can opt out	A sole owner, a partner or an LLC member can choose not to cover themselves. Employees can never be left out.
Workers' comp: if you skip it	Knowingly going without cover costs up to $500 a day, with a minimum of $10,000. A repeat costs up to $1,000 a day with a $20,000 minimum. The state can also order all work to stop, and the owner or officer can be charged with a Class 4 felony.

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Money checks

6Does Illinois check your credit for an HVAC contractor license? What is this?

Illinois does not check your credit for this license.

Credit score you need	None. There is no state license, so there is no state credit check, net worth test or financial statement
If your score is lower	Not needed. The only net worth figure in state law is the $1,000,000 that lets a home repair business skip buying insurance

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Bonds

7Does an HVAC contractor need a bond in Illinois? What is this?

Illinois does not require a state bond for this license. Some cities ask for one before they issue permits.

Does the state require a bond?	No
Amount	Not listed yet

The state does not ask for a bond (a promise, backed by an insurance company, that customers can be paid if you do not finish the job) because it does not license the trade. Chicago and other towns may ask for one before they issue a permit or a local license, so check with each city.

Checked by a person against the official page·idfpr.illinois.gov

Federal rules

8Federal rules that also apply What is this?

Rules from the US government that apply to an HVAC contractor in Illinois on top of the state's own.

EPA refrigerant certification	Anyone who maintains, services, repairs or disposes of equipment that could release refrigerant must hold EPA Section 608 technician certification. The rule covers the old ozone-depleting refrigerants and their substitutes such as HFCs. You pass a test run by an EPA-approved organization, and the card never expires. Illinois does not issue it and does not ask for it, but federal law does

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Showing your number

9Where must an Illinois HVAC contractor show the license number? What is this?

In Illinois: there is no state license number to display. If Chicago or your town issues you a license, ask them whether the number must go on your trucks, ads and invoices.

The rule	There is no state license number to display. If Chicago or your town issues you a license, ask them whether the number must go on your trucks, ads and invoices
What your contract must say	On any home job over $1,000 the state home repair law makes you give the customer a written contract to sign before work starts. It must show the total price with parts and materials itemized, any charge for the estimate, and your business name and address
Written notice you must give the customer	Before any home repair contract you must hand the customer the state pamphlet Home Repair: Know Your Consumer Rights. Over $1,000 the customer also signs a slip saying they received it, and you keep the original
If you forget	Breaking the home repair law is treated as consumer fraud. The customer can sue for actual damages under the state's consumer fraud law

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Tax

10Does an HVAC contractor charge sales tax on labor in Illinois? What is this?

In Illinois, no sales tax on your labor when it is part of a construction contract. The rest of the rules are below.

See how this compares in every state: Can you charge sales tax on labor? The rule in 25 states

What this tax is	Illinois treats an HVAC contractor as the final user of the furnace, the condenser, the ductwork and the parts that become part of a building. The tax is paid once, when you buy, and never appears on your invoice
Who pays tax on materials	You. You owe use tax on the cost of every material that becomes part of the building. Your supplier normally collects it at the counter. You do not charge the customer tax on materials or on labor
Labor	No sales tax on your labor when it is part of a construction contract
Homes versus businesses	No difference. The same rule applies to a house and to an office
New buildings versus repairs	No difference. A new install, a replacement and a repair all follow the same rule
Things that are not part of the building	Some things stay a separate item after installation, such as a window unit or a portable heater. For those you are a retailer and must charge the customer sales tax on the sale
Resale certificate	Only if you do not know at the time of purchase whether an item will go into a building or be sold as is. If you then use it in a building you must report and pay the tax yourself
Use tax	Equipment bought from another state is still taxed. If the seller did not collect Illinois tax, you pay use tax to the Department of Revenue yourself
Tax rate	6.25 percent state, plus local rates that vary by town and county. Look up the rate for a job address with the Tax Rate Finder in MyTax Illinois

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Getting paid

11Getting paid: lien and notice deadlines for an Illinois HVAC contractor What is this?

If you are not paid in Illinois, a lien on the property is your backstop, but only if your notice goes out on time: on every job, a subcontractor must send the owner a written notice of the amount due within 90 days after finishing (last day of work June 1 means notice by August 30). Send it to the owner, and to the lender if you know one, by certified mail, a tracked courier or in person.

The order things have to happen in, counted in days

Day 0
Your first day on the job
The clock starts here.
Day 90
Send your notice
On every job, a subcontractor must send the owner a written notice of the amount due within 90 days after finishing (last day of work June 1 means notice by August 30). Send it to the owner, and to the lender if you know one, by certified mail, a tracked courier or in person

Each day count is counted from the day the rule beside it names, which is not always the same day. Read the sentence under each one.

Who has to send a notice	Subcontractors and suppliers, meaning anyone the owner did not hire directly. A contractor hired by the owner sends no notice but must give the owner a sworn list of everyone working under them before any payment
Homes the owner lives in	On a house the owner lives in, a subcontractor must hand or send the occupant a written notice within 60 days of the first day of work or delivery (first day on site March 1 means notice by April 30). Send it by certified mail with a return receipt or deliver it in person. Late notice keeps the lien only for money the owner has not already paid out
Send your notice by	On every job, a subcontractor must send the owner a written notice of the amount due within 90 days after finishing (last day of work June 1 means notice by August 30). Send it to the owner, and to the lender if you know one, by certified mail, a tracked courier or in person
File your lien by	Record your claim for lien with the county recorder within four months after your last day of work (last day of work June 1 means you record by October 1). Against the owner alone you have two years, but four months is what protects you against a sale or a new mortgage
File a lawsuit by	You must start your lawsuit within two years of finishing the work (last day of work June 1 means you sue by June 1 two years later)
Written notice you must give the customer	A contractor hired by the owner of a house they live in must give them a written notice in bold type of at least 10 point. It says the law requires a sworn statement of everyone furnishing labor and materials before any payment is due

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Keeping it

12How do you renew an HVAC license in Illinois? What is this?

The General Contractor license (Chicago) renews every year.

License	Renewal
General Contractor license (Chicago)	Every year

License

Renewal

General Contractor license (Chicago)

Every year

Renewal fees are in what the license costs. The official page for each license is linked under how you get it.

Watch out

13What catches people out in Illinois What is this?

The things people get wrong or do not expect about Illinois, in a few sentences.

Illinois has no state HVAC license at all. The state's list of licensed professions has no heating, cooling or refrigeration trade on it, so your city or village decides whether you need one.
The insurance rule comes from consumer law, not a license, and it turns on the kind of work rather than its price. Fitting a new furnace in an existing home is covered whatever it costs, while a service call under $500 is not, and a new build is outside the law altogether.
Any home job over $1,000 needs a signed written contract, and a signed slip saying the customer received the state pamphlet Home Repair: Know Your Consumer Rights.
Illinois taxes the furnace, not the labor. You pay use tax at the supply house on equipment that becomes part of the building and charge the customer no tax at all.
Chicago has no HVAC license either, but a heating or cooling permit there must name a licensed general contractor. The smallest class costs $300 a year and needs $1 million of liability insurance.
Refrigerant is federal. The EPA Section 608 card is the one certificate every technician must hold across the whole state, and it never expires.

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14Where these numbers come from

The labels under each table are explained on how to read a page.