District of Columbia

Home Services Buying Guide

How a Homeowner Can Navigate Contractor Licensing in DC

A white silhouette of the state of washington on a black background.

For homeowners in the District of Columbia, hiring a home service contractor requires careful attention to specific licensing and tax rules. The DC Department of Licensing and Consumer Protection (DLCP) is the key authority for contractor licensing, and sales tax application in the District has unique provisions for certain services.


Licensing Requirements for Home Service Contractors in the District of Columbia


The District of Columbia has specific licensing requirements for Home Improvement Contractors and also licenses various specialized trades. All contractors must generally obtain a Basic Business License through the Department of Licensing and Consumer Protection (DLCP).


Home Improvement Contractor License:

  • Any contractor performing home improvement work (repair, remodeling, alteration, addition to residential property) must obtain a Home Improvement Contractor Basic Business License. This is a comprehensive license.
  • Key Requirements for this license include:
  • Business Registration: The contractor's business entity must be registered with the DC Department of Consumer and Regulatory Affairs (DCRA), now part of DLCP.
  • Registered Agent: A registered agent must be appointed in DC.
  • Certificate of Occupancy/Home Occupation Permit: If operating from a physical location or a home, the appropriate permit is required.
  • Tax Registration: Must be registered with the DC Office of Tax and Revenue.
  • Clean Hands Self-Certification: A sworn statement that the applicant does not owe the DC government more than $100.
  • Police Criminal History Report: Required for all partners, officers, or key individuals.
  • Surety Bond: A $25,000 surety bond is mandatory. This bond protects consumers if the contractor fails to fulfill contract requirements or violates laws.
  • Insurance: Proof of General Liability Insurance with minimum limits of $50,000 for bodily injury/death (single person), $100,000 aggregate (more than one person), and $10,000 for property damage.
  • Home Improvement Salesperson Designation: The contractor must designate at least one Home Improvement Salesperson who also holds a Basic Business License (requiring a separate application, criminal history report, and fees).
  • Contract Samples: Applicants must provide samples of their home improvement contracts.
  • Consent to Investigation: Applicants must consent to background checks.
  • Fees: Various application and biennial licensing fees apply.
  • This license is typically renewed every two years.


General Contractor / Construction Manager License:

  • For larger, non-residential, or new construction projects, a General Contractor / Construction Manager Basic Business License is required. While similar in some respects, it has different insurance requirements (e.g., $500,000 to $2,500,000 general liability depending on class) and does not require the surety bond, salesperson designation, or contract samples specific to home improvement.


Specialized Trades Require State Licenses:

  • Plumbers, Electricians, and HVAC/Refrigeration Technicians: These trades are licensed by the DC Board of Industrial Trades (under the DLCP's Occupational and Professional Licensing system).
  • Licenses often include Apprentice, Journeyman, and Master levels, requiring documented experience and passing specific trade exams.
  • For example, Master Plumbers/Electricians require extensive experience and passing comprehensive exams based on national codes.
  • Asbestos and Lead-Based Paint Work: Specific certifications are required for these hazardous material abatement activities.
  • Permits: In addition to licenses, contractors must obtain all necessary building permits from the DC Department of Buildings (DOB) for projects requiring them. These permits ensure work complies with local building codes and undergoes inspections.


It is illegal for an unlicensed contractor to perform work that requires a license in the District of Columbia. Hiring an unlicensed individual carries significant risks for homeowners, including lack of recourse for shoddy work and potential liability issues.


How Sales Tax Applies to Home Service Projects in the District of Columbia


The District of Columbia has a general sales tax rate of 6% on tangible personal property and certain selected services. The application of sales tax to home service projects in DC can be nuanced, particularly regarding labor versus materials.

  • Tangible Personal Property (Materials) is Taxable:
  • In general, the sale of tangible personal property (materials) that a contractor purchases and incorporates into real property as part of a home improvement project is subject to DC sales tax.
  • Typically, contractors are considered the "retailer" of these materials. They purchase materials from their suppliers using a resale certificate (thus not paying tax at the time of purchase) and then collect the 6% sales tax from the homeowner on the selling price of the materials as part of the project cost. The contractor then remits this tax to the DC Office of Tax and Revenue.
  • Construction-Related Services (Labor) are Generally NOT Taxable:
  • Charges for labor services directly related to construction, reconstruction, alteration, improvement, or repair of real property are generally exempt from DC sales tax. This means if a contractor itemizes labor charges separately from material costs on your invoice, the labor portion should not be taxed.
  • Exceptions and "Real Property Maintenance Services" (Taxable):
  • A key distinction in DC is "Real Property Maintenance Services," which are taxable at a rate of 5.75%. This includes activities that keep land or a building clean, orderly, and functional, such as:
  • Floor, wall, ceiling, and window cleaning
  • Pest control
  • Servicing in-ground and in-building swimming pools
  • Minor adjustments, maintenance, or repairs that are not part of construction or major repairs.
  • Important Note: This does NOT include painting, wallpapering, or other services performed as part of construction or as major repairs. Therefore, traditional home improvement projects like remodeling, roof replacement, or major plumbing/electrical work, where labor is separately stated, typically have tax applied only to the materials. Landscaping services are also taxable at 5.75%.


What this means for homeowners:

  • For most significant home improvement or renovation projects in DC, you should expect to pay sales tax on the materials used, while the labor charges (if separately itemized) should generally be exempt.
  • If your project involves "real property maintenance services" (like routine cleaning or pool servicing), then the labor for those services would be subject to sales tax.
  • Always ask your contractor for a detailed invoice that clearly separates material and labor costs to ensure correct sales tax application.


How to Verify Licensing in the District of Columbia


Verifying a home service contractor's license in DC is primarily done through the Department of Licensing and Consumer Protection (DLCP) online portal.


DC Department of Licensing and Consumer Protection (DLCP) - Business License Portal / Occupational and Professional Licensing (OPL) Portal:

  • This is the official source for verifying Home Improvement Contractor licenses, General Contractor / Construction Manager licenses, and specific trade licenses for Plumbers, Electricians, and HVAC/Refrigeration Technicians.
  • Website: Visit the DLCP website: https://dlcp.dc.gov/. Look for "Business License Center" or "Occupational and Professional Licensing" links.
  • Direct Search: You may need to navigate to their online portal for license search. Look for a "Basic Business License Search" or "Occupational and Professional License Search." Some third-party sites like Uhire also provide direct links to the DC license search tools.
  • Search Options: You can usually search by business name, individual name, or license number.
  • Information Provided: The search results should confirm the license status (active, expired, suspended), license number, issue/expiration dates, and the specific license type.


DC Office of Tax and Revenue - Business Taxpayer Search:

  • You can verify if a business is registered with the DC Office of Tax and Revenue, which is a prerequisite for a contractor license.
  • Website: https://otr.cfo.dc.gov/ (look for business registration or tax account lookup).


DC Department of Buildings (DOB) - Permit Search:

  • While not a license, checking the permit history for an address or seeing if a contractor has pulled permits in the past can offer additional assurance. This also allows you to verify that the necessary permits for your project are pulled by a licensed entity.
  • Website: https://dob.dc.gov/ (look for "Permit Search" or "Online Permitting System").


Proof of Insurance and Bond: Always request current Certificates of Insurance for general liability and workers' compensation. For Home Improvement Contractors, specifically ask for proof of their $25,000 surety bond. Contact the insurance and bonding companies directly to verify coverage and ensure the bond is active.


Always verify a contractor's license, insurance, and bond before signing any contract in the District of Columbia. This is your most important step to ensure a professional, legally compliant, and protected home improvement project.


Sources



Share