Oregon

Home Services Buying Guide

Your Oregon Home Project: Understanding Licensing, Sales Tax, and Verification

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Planning a home improvement project in Oregon involves a comprehensive state-level licensing system for contractors and a unique sales tax landscape. Unlike most states, Oregon doesn't have a general sales tax, but it does have specific tax implications for businesses. Understanding these details is crucial for a smooth and compliant project.


Contractor Licensing in Oregon: The Construction Contractors Board (CCB)


In Oregon, the Construction Contractors Board (CCB) is the primary agency responsible for licensing most contractors and subcontractors involved in residential and commercial construction, remodeling, and repair. By law, anyone who is paid to repair, improve, or build a home in Oregon must be licensed by the CCB. This includes general contractors, handymen, roofers, painters, and even carpet installers, with very few exceptions (e.g., minor handyman work under $1,000 that doesn't require permits).


Key Requirements for a CCB License include:

  • Responsible Managing Individual (RMI): The business must designate an RMI (an owner or employee with management authority) to complete a 16-hour pre-license training course and pass the Oregon Contractor Exam.
  • Business Registration: The business entity (e.g., sole proprietorship, LLC, corporation) must be registered with the Oregon Secretary of State.
  • Surety Bond: Contractors must obtain a CCB surety bond in a specific amount, which varies by endorsement type (e.g., Residential General Contractors need a $25,000 bond, specialty contractors typically $10,000). This bond protects consumers.
  • General Liability Insurance: Proof of general liability insurance is required, with minimum coverage amounts varying by license type (e.g., Residential General Contractors need at least $500,000 per occurrence). The CCB must be named as a certificate holder.
  • Workers' Compensation Insurance: If the contractor will have employees, they must obtain workers' compensation insurance.


CCB License Types (Endorsements): The CCB issues various license endorsements based on the type of work and structure:

  • Residential General Contractor (RGC): For general work on residential structures (single-family, small apartments).
  • Residential Specialty Contractor (RSC): For specific trades within residential construction (e.g., painting, roofing, carpentry, concrete).
  • Residential Limited Contractor (RLC): For specific, limited scope residential work.
  • Commercial General Contractor (CGC): For commercial projects (Level 1 & 2).
  • Commercial Specialty Contractor (CSC): For specific trades within commercial construction (Level 1 & 2).
  • Dual License: For contractors working on both residential and commercial projects.


Trade-Specific Licenses (Building Codes Division - BCD)

In addition to the CCB license, some specialized trades require a separate, higher-level license issued by the Oregon Building Codes Division (BCD), under the Department of Consumer and Business Services:

  • Electricians: Individuals (Apprentices, Journeymen, Master Electricians) and Electrical Contractors must be licensed by the BCD. This involves extensive experience (e.g., 8,000 hours for Journeyman) and passing state exams based on the National Electrical Code and Oregon-specific regulations.
  • Plumbers: Individuals (Apprentices, Journeymen, Master Plumbers) and Plumbing Contractors must be licensed by the BCD. Similar to electricians, this requires significant apprenticeship experience and passing exams.
  • HVAC/Mechanical Contractors: While the CCB issues a specialty contractor license for HVAC work at the business level (e.g., Limited Maintenance Specialty Contractor HVAC/R), individuals performing the actual work often need Limited Energy Technician (LEA/LEB) licenses from the BCD, particularly for installing, servicing, or maintaining electrical components of HVAC systems. Federal EPA Section 608 certification is also required for anyone working with refrigerants.


Crucial Note: A contractor performing electrical or plumbing work, for example, needs both a CCB license (as a Residential Specialty Contractor or General Contractor) and the specific BCD-issued electrical or plumbing trade license for the individual performing the hands-on work.


Sales Tax on Home Service Projects in Oregon


Oregon is one of the few states in the U.S. that does NOT have a statewide general sales tax. This means that when you purchase goods or services, including home improvement services, you generally do not pay an additional sales tax on top of the listed price.


Key Points Regarding Taxes for Home Service Projects in Oregon:

  • No Sales Tax for Consumers: Homeowners typically do not pay sales tax on the materials or labor for home service projects in Oregon.
  • Contractors and Business Taxes: While there's no sales tax, contractors and other businesses operating in Oregon may be subject to other state taxes, such as:
  • Corporate Activity Tax (CAT): Effective January 1, 2020, Oregon implemented a Corporate Activity Tax (CAT) on businesses with more than $1 million in commercial activity (gross receipts) in Oregon. This is a gross receipts tax, not a sales tax, and is paid by the business.
  • Income Tax: Businesses and individuals in Oregon are subject to state income tax.
  • Property Tax: Property owners pay property tax.
  • Local Option Taxes: Some local governments may have specific local option taxes (e.g., a food and beverage tax in Ashland), but these generally don't apply to typical home improvement projects.


What this means for you: When you receive an estimate or invoice from a contractor in Oregon, you should not see a separate line item for "sales tax." The price quoted should be the full price, with no additional sales tax added.


How to Verify Licensing in Oregon


Verifying a home service contractor's licenses in Oregon is straightforward using the state's online lookup tools.


Oregon Construction Contractors Board (CCB) - License Search:

  • This is the primary tool for verifying a general contractor, remodeler, handyman, or specialty contractor's CCB license.
  • You can search by license number, business name, or individual name.
  • The lookup will show the license status (active, expired, suspended), license type/endorsement, bond and insurance information, and any complaint or disciplinary history. This is your first and most important step for any home improvement work.
  • CCB License Search: https://search.ccb.state.or.us/search/ (or search "Oregon CCB license search")


Oregon Building Codes Division (BCD) - License Holder Search:

  • Use this for verifying specific trade licenses like electrical and plumbing.
  • You can search for individual electricians, plumbers, and related mechanical/HVAC licenses.
  • BCD License Search: Navigate to the BCD website (www.oregon.gov/bcd) and look for "License Holder Search" or "License Verification."


Oregon Secretary of State - Business Registry Database:

  • Any legitimate business operating in Oregon should be registered with the Oregon Secretary of State. This confirms their legal existence.
  • Oregon SOS Business Search: https://sos.oregon.gov/business/pages/find.aspx (or search "Oregon Secretary of State business search")


Proof of Insurance and Bonding:

  • While the CCB lookup shows bond and insurance details, always request a Certificate of Insurance (COI) directly from the contractor's insurance provider. This document will detail their specific coverage limits for general liability and workers' compensation, confirming they are active.
  • Also, request proof of their surety bond from the bonding company.


Local City/County Building Departments:

  • Always contact your local city or county building department to inquire about any specific permitting requirements for your project. Permits often ensure that the work meets local codes and is performed by properly licensed individuals.


By diligently using these verification tools, you can ensure you are hiring a legitimate, qualified, and compliant contractor for your Oregon home project, protecting your investment and peace of mind.



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