South Dakota to Pennsylvania: residential contractor license reciprocity

Why this level is Hybrid. Section 517.12 of the Act preempts most local licensing of home improvement contractors: "Registration under this act shall preclude any requirement of payment of a fee or registration or licensing of any home improvement contractor by any political subdivision. Political subdivisions shall be permitted to require building permits and local enforcement of the building code for that political subdivision, for which a reasonable fee may be charged." The preemption is not total. It leaves untouched a municipality's authority under the Pennsylvania Construction Code Act, workers' compensation requirements, licensing standards in effect on July 1, 2009 for electricians, plumbers and other trades that test or certify, and liability-insurance standards adopted before January 1, 2006. More importantly, the state registration only covers home improvement - so building a new house, or working on a residential building of three or more units, falls outside it and back into whatever the city requires.

Philadelphia. The Department of Licenses and Inspections draws the line in so many words: "You don't need this license if your business only does work on existing one-or-two-family dwellings and does not do work that requires a special trade license. Instead, the company must submit as a Home Improvement Contractor after registering with the State." A remodeler therefore registers with the Attorney General, then registers that PA number with L&I through eCLIPSE to pull permits; there is no additional city fee for it, but the company still needs a Business Income and Receipts Tax ID, a Commercial Activity License, current City taxes, and a Certificate of Insurance showing general liability of $500,000 per occurrence, automobile liability of $300,000 and workers' compensation of $100,000 per accident, $100,000 per employee and a $500,000 policy limit. Excavation under permits submitted on or after January 1, 2023 also needs an Excavation Contractor License. Build a new house, work on a larger residential building, or take on complete demolition, electrical, plumbing or fire suppression, and the state registration is no longer enough: that is the Philadelphia Contractor License at $126 a year, described at the general level.

Pittsburgh. The Department of Permits, Licenses and Inspections requires a General Contractor License for the construction of new one- or two-family dwellings and for renovations and additions to rental or investment residential properties, as well as for commercial work and demolition. The application takes a valid photo ID, a general liability certificate of at least $1,000,000 each occurrence and $2,000,000 general aggregate, a workers' compensation certificate, a Tax Compliance Letter from the City's Department of Finance, and an EPA Renovation, Repair and Painting (RRP) certification in lead-safe construction practices, which is good for five years. The license is $90 to obtain and $90 to renew each year under the 2026 fee schedule, expires 365 days from the date of issuance, and carries a 60-day grace period with a $50 late fee from day 31. There is no exam and no experience requirement. Applications run through OneStopPGH; PLI is at 412 Boulevard of the Allies, 412-255-2175.

Scranton. Code Enforcement issues a city Home Improvement Contractor License for residential work. The application takes the standard identification, indemnification, disclosure and affidavit items, a copy of the contractor's Pennsylvania Home Improvement Contractor registration certificate, and a reference letter from an employer or client. It costs $150 initially and $125 to renew, with a $50 late fee; renewals are due before your first permit of the calendar year or by March 31, whichever comes first. Work on a residential building of three or more units needs Scranton's General Contractor License instead.

Allegheny County. The county issues road and bridge, food facility, lead and asbestos, plumbing and pool permits, but no contractor license of any kind, so a residential contractor outside Pittsburgh city limits deals with the local municipality's code office.

Everywhere else. Most Pennsylvania municipalities license nothing and simply enforce the Uniform Construction Code through permits and inspections, which they may charge a reasonable fee for. Ask the local code office before you contract, and expect the state registration to be the only credential you are asked for.

Arriving from another state. There is no state examination to sit, nothing that a license from your last state can be exchanged for, and no shorter route for an experienced contractor. Register with the Office of Attorney General, carry the insurance, put your PA number on every advertisement, contract, estimate and proposal, and use written contracts that meet the Act's terms. Then add the city credential wherever you plan to build new homes or work beyond simple home improvement.

How it works in South Dakota. There is no state contractor license, no state application and no state examination, so nothing carries automatically from one South Dakota city to the next, let alone from another state. What every contractor does need before starting work anywhere in the state is a contractor's excise tax license from the Department of Revenue: 'an individual must be licensed before starting work in South Dakota' and 'all contractors must be licensed regardless of the amount of the receipts they have or the amount of tax due.' There is no fee for it, the excise tax itself is 2% of a prime contractor's gross receipts, and three of the four cities below want to see a copy of the license card before they will issue a city license. Get that first, then take each city in turn.

Sioux Falls. Building Services 'requires a Residential Building Contractor's License of all contractors doing work on residential 1- & 2-family dwellings and townhomes within the city limits', and the examples it gives run from sheds, decks, shingles and sheetrock to basement finishing and new construction. The license is held through a named Construction Supervisor, who must first pass the Construction Supervisor Examination: a timed open-book test on the City of Sioux Falls Residential Code Handbook, offered monthly, 50 questions, 'You must get 80% or higher to pass the test, therefore a maximum of 10 of the 50 questions may be incorrect.' The examination fee is $75.00 and the handbook is $10.00. 'Upon application the Construction Supervisor must submit a $20,000 Compliance Bond, a minimum of $300,000 general liability insurance and the appropriate license fees within 90 days of examination.' Licenses run three years, one hour of continuing education is required in each cycle, and a license expired more than twelve months means sitting the examination again unless an inactive license was maintained. On out-of-state credentials the city is blunt: 'No, the city of Sioux Falls does not reciprocate any licenses. You will still need to take and pass examination before applying for the license.' The city does not print the license fee itself on the page, so ask licensing on 605-367-8672 what to send with the bond and the certificate. Sioux Falls also issues a separate Residential Roofing & Repair Contractor license and separate electrical, mechanical, plumbing, fireplace, refrigeration, irrigation, right-of-way and sign licenses.

Rapid City. Building Services licenses a Class B contractor 'for construction of detached single-family houses, attached single family houses and two-family dwellings', on a city-administered open-book examination based on the 2018 International Residential Code and the Rapid City amendments, 54 multiple choice questions in three hours, sat at City Hall. The license costs $200 initially and $100 to renew, runs three years and carries six hours of continuing education per period. Every applicant files a certificate of insurance naming the City of Rapid City as certificate holder and nothing else is accepted, with minimum general aggregate liability of $1,000,000, $300,000 fire damage and $1,000,000 each occurrence, plus a workers' compensation certificate or a signed statement of non-participation for an owner or partnership with no employees. A copy of the state excise tax certificate goes in the packet. Roofing is a separate Class R license, also $200 for three years, on a 12-question examination. A licensee who misses renewal has a one-year grace period, after which the license lapses and the examination must be taken again. Building Services is on (605) 394-4120.

Aberdeen. The city is explicit that location makes no difference to whether you need its license: 'Whether you are based in the City of Aberdeen itself, a different city within South Dakota, or you are based out of a completely different state all together, you must be licensed through the City of Aberdeen.' The examination is 50 questions, open book, two hours, with a passing score of 70%, studied from The Contractors Handbook at $15, and '$35 fee will be charged every time an exam is attempted or passed.' Aberdeen is the one place in the state that gives any weight to a license held elsewhere: 'the examination requirement may be waived if proof of prior licensing from recognized jurisdictions is approved by the City of Aberdeen's Building Official.' No jurisdiction is named on the handout, so bring the license and the licensing authority's own documentation and ask the Building Official first. After passing or being waived, the applicant files a $200 first-time fee covering three years, proof of liability insurance, proof of workers' compensation insurance if applicable, and a copy of the excise tax license, and is then approved by the City Council, which meets Monday evenings; paperwork is due by noon the previous Wednesday and permits may be drawn only after the vote. Renewal is $150 every three years. Building Inspection is at City Hall, 123 South Lincoln Street, 3rd Floor, 605-626-7017.

Brookings. Community Development issues a residential contractor license on paperwork alone. The requirements are the application, a $75 fee, an excise tax number, a copy of workers' compensation insurance and 'a copy of current General Commercial Liability Insurance Certificate stating the sum of not less than $500,000 for each occurrence.' There is no examination and no bond. The license year is the calendar year, January 1 to December 31, and it 'must be renewed in order to continue any current project or prior to starting any new project'; a contractor with a job in progress who lets it expire pays double the fee. The license is neither refundable nor transferable. Building permits are required in the city and on nonagricultural land in the joint jurisdictional area roughly three miles out. Community Development is at 520 3rd Street, Suite 140, (605) 692-6629.

Everywhere else. Smaller South Dakota cities set their own rules and many require only a permit and proof of insurance. Ask the building official in each city you intend to work in, and remember that the excise tax license is required statewide whether or not the city licenses anybody.