Massachusetts Contractor Bond Requirements

The state of Massachusetts requires out-of-state contractors to be bonded, while allowing cities and towns within the state to set their own requirements for licensing.

Out-of-state contractor bonds

The Massachusetts Department of Revenue requires out-of-state contractors and subcontractors to register with the state before they are able to perform any associated type of work, including construction, reconstruction, alteration, remodeling, or repairing.

How to register as an out-of-state contractor:

To register as a Massachusetts out-of-state contractor, applicants will need to complete the following requirements:

• Submit a Guarantee Bond Form or pay a surety deposit for a given project valued at $20,000+ (including necessary materials)

• Pay sales or use tax on any project material purchases

• Register, file, and pay for other applicable taxes

• Submit a DOR Certificate of Compliance to the hirer before the project is complete

  • A Certificate of Compliance will be issued by the DOR to a contractor or subcontractor who has complied with the registration process, including the filing and paying of all applicable taxes.

• Have a power of attorney designate the bonding company as an agent for any matter relating to the job in the state

How much does an out-of-state contractor bond cost?

The out-of-state contractor bond is required in an amount ranging from $100 to $100,000 and must be equal to 6.25% of the total price of the contract. If a contract’s price is modified during the project, the bond must be changed to match the 6.25%. The cost of the contractor bond is underwritten with a credit-based premium.

Out-of-state contractor bonds require the bond to be in use after the initial purchase.

• The bond must be active for a minimum of six months after the contract is completed.

  • In case sales and use tax returns are required, the bond must be active for six months after the start of the contract.

Exemptions from submitting an out-of-state contractor bond include:

• The DOR’s Out-of-State Contractor’s Unit approved the contractor or subcontractor as “in-state.”

• The project (including materials) costs less than $20,000.

• The project charges for labor only.

• The project requires purchasing materials-exempt entities such as:

  • Government agencies (Form ST-5C required) or religious and charitable organizations (Form ST-5C and Form ST-12 may also be required); these forms must be submitted to the DOR during the registration process.

  • Sales tax exemptions may be applicable for agricultural production, commercial fishing, manufacturing, and research and development (Form ST-12 required).

  • Every involved party must be responsible for keeping exempt certificates valid and updated.

DOR will refund a surety payment with the following conditions:

• The project has been finished.

• The project’s applicable taxes have been filed and paid.

• An out-of-state contractor is registered as the taxpayer on MassTaxConnect and clicks Request Refund on the account page.

• The DOR’s Out-of-State Contractor's Unit is requested by letter to refund the taxpayer.

Visit the obligee page for more information about out-of-state Massachusetts contractor bonds.

Massachusetts city-specific contractor bonds

Cities and towns throughout the state of Massachusetts hold their own specific requirements for contractors.

Town of Braintree Contractor License Bond

A $5,000 contractor bond is required for contractors in the Town of Braintree. These bonds can be purchased instantly online for a one-year term for $100. Multi-year discounts of 25% are applied to contractors who purchase the bond upfront for more than a one-year term.

Town of Dighton Contractor Bond

The Town of Dighton, Massachusetts requires that contractors post a $10,000 contractor bond. This bond can be purchased online instantly for $100. A multi-year discount is available.

City of Gardner Contractor License Bond

Contractors in the City of Gardner are required to purchase a $5,000 contractor license bond. Purchase this bond instantly online for a one-year term for $100. Save time and money by purchasing your bond for a multiple-year term upfront with a 25% multi-year discount.

Town of Mattapoisett Water & Sewer Contractor Bond

A $5,000 contractor bond is required of water and sewer contractors in the Town of Mattapoisett. These bonds can be purchased instantly online for $100. Save money by purchasing your bond for multiple years with a 25% multi-year discount.

City of Salem Sign Contractor Bond

The City of Salem, Massachusetts, requires contractors to complete an application for permit to erect a sign and post a $1,000 bond. This bond can be purchased for a one-year $100 term. A 25% multi-year discount can be applied to bonds purchased for more than a one-year term.

Town of Webster Contractor Bond

The Massachusetts Town of Webster requires contractors to post a $5,000 contractor bond. Purchase this bond for $100 instantly online without a credit check. Purchasing this bond for a multiple-year term upfront can save you time and money with a 25% multi-year discount.

Town of Westminster Contractor License Bond

Contractors are required to purchase a $5,000 contractor bond in the Town of Westminster. These bonds can be bought instantly online for $100 for a one-year term or with 25% off subsequent years with a multi-year purchase.