How to start an HVAC business in Texas: the TDLR license, the technician rule and the ad rules

Texas is one of the few big HVAC states with a single statewide license and no city-by-city contractor tests. The Texas Department of Licensing and Regulation (TDLR) issues it, and TDLR also registers the technicians who work under it. That simplifies a startup. It also means the rules about who may touch a system, what you may say in an ad and who may sign a proposal are enforced statewide, with a published penalty table. Crews, equipment and the business side are in the national HVAC startup guide, so this page sticks to Texas.

The details were current in October 2026 and are background, not legal counsel. Call TDLR at 512-463-6599 before you act on any of them.

Which Texas license class do you need?

TDLR's contractor application page defines two classes. The Class A license allows work on any size unit. The Class B license allows work on cooling systems of 25 tons and under and heating systems of 1.5 million BTUs per hour and under. Each license carries one endorsement:

A residential-only company will usually want a Class A or B with the environmental endorsement. Class B is enough for most homes and light commercial buildings, but a 30-ton rooftop job is outside it. You can hold both classes, and TDLR issues one document with two numbers. Each license number follows the form title, class, number and endorsement (for example TACL/A/000000/C).

TDLR says ACR companies must employ a licensed contractor at each permanent location. A second shop needs its own licensed contractor.

What does it take to qualify?

Experience. You need at least 48 months of practical air-conditioning and refrigeration work under a licensed contractor in the past 72 months. The alternative is holding a technician certification for the past 12 months plus 36 months of supervised experience in the past 48 months. Experience must be documented on TDLR's verification form, filled out by the people who supervised you, not by you. TDLR's exceptions page credits education against the 48 months: 24 months for a four-year degree in air conditioning, refrigeration or mechanical engineering, 12 months for a two-year program, 6 months for a one-year certificate, and 12 months per 2,000 apprenticeship hours. Military training can satisfy the whole requirement.

Application and exam. The fee is $115, the applicant must be 18 or older, and a license lasts one year. After TDLR approves eligibility, you receive an email from PSI to schedule one of four contractor exams (commercial refrigeration or environmental air, in A or B). You must finish the whole process, including passing the exam, within a year of filing.

Insurance. After you pass, you file a certificate of insurance. TDLR requires commercial general liability at all times while the license is active:

A single policy can cover both classes if it meets the Class A numbers. See our contractor insurance guide for certificates and additional insured requests. Texas reciprocates with Georgia and South Carolina, according to TDLR, and accepts experience from states and cities with substantially equivalent requirements.

Who can work under your license?

Anyone who assists a licensed contractor with ACR maintenance or repair must register as a technician. Per TDLR's technician page, technicians must work under a licensed contractor's supervision and may not advertise ACR services. The fee is $20, the applicant must be 16 or older, and registration lasts one year. In disaster recovery, TDLR says out-of-state technicians can register with no exam and that all non-exempt work must go through a Texas licensed contractor with the required insurance.

TDLR's penalty table lists using someone who is not a registered technician, a certified technician, a trainee or a licensed contractor on maintenance work as a Class C unlicensed violation, with subcontracting an entire job to an unlicensed person and having a technician work without supervision on the same list. Class C carries a penalty of $2,000 to $5,000 and/or a probated suspension up to revocation. Class A advertising violations carry $500 to $1,000.

The FAQ page also answers a common question. Mini-splits need a license. The statutory exemption covers only portable or self-contained ductless products of three tons or less, such as window units, through-the-wall units and portable units, and a mini-split is a split system. TDLR also says a contractor cannot drill closed-loop geothermal wells without a separate driller license, so geothermal installs require a licensed driller as a sub or partner.

What must your ads, proposals and trucks show?

The same penalty table lists these as Class A advertising violations: failing to include your license number in an advertisement that requires it, failing to include it on a proposal or invoice, failing to display or incorrectly displaying company name and license number on vehicles that require it, and failing to display company name and license number on a job-site sign visible from the street. TDLR cites rule 75.71 for each. Municipalities cannot charge registration fees to TDLR-licensed contractors under Occupations Code 1302.304, though they may still collect building permit fees.

In practice, treat the license number like a phone number: it goes on the website footer, every estimate template, every invoice, the van wrap and every Google Business Profile post that sells service. A company website that you control makes that a single edit. Our HVAC SEO guide covers the rest of the site.

What does the federal refrigerant rule add?

TDLR licenses the contractor. The EPA separately requires Section 608 certification for technicians who maintain, service, repair or dispose of equipment that could release refrigerants. Per the EPA's requirements page, there are four types (I for small appliances, II for high-pressure, III for low-pressure, and Universal) and credentials do not expire. Apprentices are exempt only while closely and continually supervised by a certified technician. Texas adds its own refrigerant statement: TDLR says a nonflammable A1 refrigerant that EPA accepts under SNAP can be used in environmental air conditioning systems, which matters when a supplier pushes a substitute.

How are HVAC jobs taxed, and what about employee coverage?

The Texas Comptroller's repair and remodeling guidance says labor to repair or remodel residential property is not taxable, and the definition of residential includes apartment complexes, nursing homes, condominiums and retirement homes. For nonresidential property, the full charge for the job is taxable. A lump-sum contract means you pay tax on supplies and do not charge the customer tax. A separated contract means you itemize materials, charge tax on the materials, and leave labor untaxed. If one charge mixes new construction with nonresidential remodeling and the remodeling share is more than five percent, the whole charge is presumed taxable unless you separately state a reasonable charge. A route that mixes homes and office buildings needs two sets of estimate lines.

Workers' compensation works differently in Texas. The Texas Department of Insurance says coverage is not required in most cases, but nonsubscribers should file a notice of no coverage with the Division of Workers' Compensation each year between February 1 and April 30, after hiring a first employee, and after ending a policy, and must post and hand out written notices. Government construction contracts under Labor Code 406.096 require the contractor to certify coverage of every employee on the project. Insurance carriers, property managers and commercial customers may ask for it anyway, so price it early.

A Texas LLC files a Certificate of Formation (Form 205) for $300 as of October 2026, and the Comptroller's franchise tax report is due May 15. Our Texas startup page has the details.

Season and first steps

Summer heat drives the Texas HVAC calendar, and the Gulf Coast also plans around hurricane season (June through November, per the National Hurricane Center). Heat-wave weeks produce calls faster than a small shop can answer, which is where a phone line that picks up every call pays off. Our Texas page covers recording consent, and callers from other states may follow different rules, so see our call recording guide.

1. Choose Class A or B and the endorsement, and gather experience verification forms from the people who supervised you.
2. File the $115 application, schedule the PSI exam, then file the certificate of insurance.
3. Register every employee who touches a system as a technician, and hold EPA 608 certification for refrigerant work.
4. Put the license number on the site, proposals, invoices, vehicles and job-site signs.
5. Set up residential and nonresidential tax treatment in your estimates.

See our HVAC industry page for how we build owned lead sources for contractors.

Frequently asked questions