North Carolina HVAC contractor checklist

1. Apply for: Heating Group No. 3 Contractor, Class I Experience: 2 years (4,000 hours) of full-time work installing, maintaining, servicing, or repairing heating or cooling systems. Up to half (2,000 hours) can be school time in a related college or technical program. The Board counts 66.66 hours for each semester hour. Part-time work under 40 hours a week is prorated. | Exam: Yes, a computer exam run by PSI at seven NC test centers, with a business and law part and a technical part. You must test within 90 days of approval and wait 90 days to retake after a fail | Fees: application: 75; exam: 75; exam application total: $150; initial license: $150; renewal: $150; late renewal penalty: 25; license without exam application: 30; background check: | Renews: Annual. Every license expires December 31. Renew in January or pay $25 extra. After three years unrenewed you must retest
2. Apply for: Heating Group No. 3 Contractor, Class II Experience: Same as Class I, 2 years (4,000 hours), up to half from school | Exam: Yes, the Class II business and technical exam through PSI. A South Carolina Residential HVAC license can waive the technical part, not the business part | Fees: application: 75; exam: 75; initial license: $150; renewal: $150 | Renews: Annual, expires December 31
3. Apply for: Heating Group No. 2 Contractor (Class I only) Experience: 2 years (4,000 hours). A Group 3 Class I licensee gets 50 percent credit toward a Group 2 application, and the other way round | Exam: Yes, business and law part plus technical part, through PSI | Fees: application: 75; exam: 75; initial license: $150; renewal: $150 | Renews: Annual, expires December 31
4. Apply for: Heating Group No. 1 Contractor, Class I or Class II Experience: 2 years (4,000 hours), up to half from school | Exam: Yes, business and law part plus technical part, through PSI | Fees: application: 75; exam: 75; initial license: $150; renewal: $150 | Renews: Annual, expires December 31
5. Apply for: Heating Group 1, 2, or 3 Technician, Class I and Class II Experience: Class I 3,000 hours (18 months). Class II 2,500 hours (15 months). Up to half can be school time | Exam: Yes, a technical part and a Board laws and rules part. A technician who later has 4,000 hours can get the contractor license by passing only the business part | Fees: exam application: $150; annual license: 75 | Renews: Annual, expires December 31
6. Get workers' comp, or file the form that opts you out Yes, once you have three or more employees on a regular basis. Corporate officers count as employees toward the three but can exclude themselves from the policy in writing. Sole proprietors, partners, and LLC members are not counted and are not covered unless they choose to add themselves
7. Pass the money check: None Alternative: None needed. The application asks for a criminal background report from CastleBranch and proof of your hours (W-2s or 1099s), not a credit check
8. Check whether your city requires a permit bond The state does not ask for one to hold the license. A city or county permit office may, and public jobs use payment bonds under G.S. 44A Article 3
9. Make sure anyone who handles refrigerant has EPA Section 608 certification Anyone who maintains, services, repairs, or disposes of equipment that could release refrigerant must hold EPA Section 608 certification, on top of the state license. Since January 1, 2018 that includes HFC refrigerants, not only ozone-depleting ones. You pass a test run by an EPA-approved certifying organization. The certification never expires. EPA does not set the test fee
10. Put your license number on every ad, proposal, contract, and invoice Post the license at your place of business. Your license number must appear on every proposal, bid, and contract and on every permit request. The Board's rule adds that the firm's license number and qualification go on contracts, proposals, permit applications, and yellow page ads. A non-binding estimate does not count as a proposal. Do not let your number go on a permit for work you will not do or supervise.
11. Work out when you charge sales tax repair and service calls: You charge sales tax on the whole bill, labor and parts. North Carolina taxes repair, maintenance, and installation services (the state calls them RMI). Repairing or replacing a blower, coil, condenser coil, control device, or a section of ductwork is taxable, and so is a maintenance visit. full system replacement: No tax charged to the customer. Installing or replacing a whole central air conditioning unit or system, a whole heating unit or system (not free-standing units), or a whole duct system is a capital improvement (the state calls the job a real property contract). You pay sales tax yourself when you buy the equipment and materials and do not charge the customer. residential versus business: No difference. A home and a business are taxed the same way. new construction labor: No tax charged to the customer. New construction is a capital improvement. You pay tax on what you buy. materials capital improvement: You are the consumer. Pay tax at the supply house and build it into your price. Keep a Form E-589CI (Affidavit of Capital Improvement) on file for each job. materials taxable repair: You charge the customer tax on the parts as part of the taxable bill. Whether you can buy those parts tax-free with a resale certificate (Form E-595E) was not confirmed by the state's page. mixed jobs: If the taxable repair part of a capital improvement job is 25 percent or less of the contract price, treat the whole job as a capital improvement. If it is more than 25 percent, charge tax on the repair part. rate: 4.75 percent state plus local rates, for a total of 6.75 to 8.25 percent depending on the county
12. Put the notice and lien deadlines on your calendar for every job notice to lien agent deadline: Within 15 days after your first day of furnishing labor or materials (first day on site March 1 means notice by March 16). Miss it and your lien ranks behind any mortgage recorded before you file, and on some projects you cannot perfect a lien at all. Send it through the lien agent's approved website, certified mail, email, fax, or hand delivery. subcontractor notice: If you were hired by the contractor, not the owner, you serve a Notice of Claim of Lien upon Funds on the person who owes your customer money. The statute sets no deadline for it, but nothing is protected until it is served. Rules on notice of contract and notice of subcontract in G.S. 44A-23 were not read. claim of lien deadline: File a Claim of Lien on Real Property with the clerk of superior court in the county where the property is, within 120 days after your last day of furnishing labor or materials (last day April 1 means file by July 30)

From Trades by State (tradesbystate.com). Independent reference, not a government site, not legal advice. Confirm with the official sources linked on the full page.