Inspecting in multiple states

I’m considering taking on an additional employee and I may also let him conduct inspections in a different state (TN). Does anyone out there have any experience crossing state lines and advice on how to structure the relationship such as should I use him as a sub or hire him as a part time employee? I’ve always operated as a one man show so this new territory for me. I’m not totally sold on the idea but if I could get some pros and cons from someone who has been down the same road, it could help me make up my mind. Thanks.

Put him through InterNACHI’s approved pre-licensing courses for Tennessee:

Believe it or not, he started yesterday. Are there any courses offered that address running a multi-inspector firm? I’m not just concerned about his qualifications on paper, but some specifics on the problems that I’m sure will be inherent operating across state lines and using more than one inspector. I’ve had several friends who are also small business owners advice me to do a little research as to which would be more beneficial to me such as making him an employee vs. a sub. With all the requirements for workman’s comp, taxes, health insurance; ect I thought it might be better to use him as a sub. I was also informed that as long as he operates in our home state at least once every 59 days, he can be considered an employee of our state (if I make him an employee) and I could avoid the additional paperwork of trying to track and pay taxes in two separate states. We have some time before he goes out on his own. I want to concentrate on his formal education as well as have him follow me around for while so I can teach him the stuff he won’t learn in the classroom and assess his ability to interact with clients.

Talk to some CPAs, and other professionals, familiar with both states’ rules…and, pick what you need.


Will do. I'm meeting with my accountant this weekend and I currently have my insurance agent chasing his tail in circles. I've made a call out to the gentleman that oversees the inspector licensing in TN and I'm just waiting for him to get back to me. I'm not really in any rush but I'm trying to exhaust all my resources now so I don't have to hit the panic button later.

I would think that you would have all of this figured out before you bring on an employee or sub or whatever you are calling him.

You want to grow but it doesn’t appear that you know how. So you have grown anyway.

You now have an employee. You need to follow the law(s) of your state and of the state that you want to have him work in. It sounds like he will be in both.

Good luck!

Well, he’s not an employee yet. He knows that this isn’t set in stone. He’s been wanting to do it for a long time but he’s a little intimidated about standing up a business from scratch. I’m already established and I’m willing to teach him everything I can. We plan on doing many pre-licensing courses, continuing ed, and walk along inspections before venturing into the world of employee or sub-contractor. I got a Master’s Degree from the School of Hard Knocks when I started my business so I feel like I’m pretty aware of how complicated this can get when trying to comply with state laws, tax laws, federal laws, standards of practice (mold, radon, home inspections, insurance, ect). Doing it in multiple states is going to make it worse. I’ve made him aware of all of this which I think may have made his apprehension worse. Our biggest problem thus far is getting in contact with someone from TN that has answers. So far, everyone I’ve talked to seems unfamiliar with any requirements we will need to meet outside of the state license. I know there are inspectors here that work in TN and others who operate multi-inspector firms and I was hoping to learn from their experiences.


If he will be an employee then why would he have to start a business from scratch? I thought you already had an established business?

If you are going to start inspecting across the state line then you don’t have to start another business all you need to do is meet that state’s requirements. Of course you could create a different business for the other state but then I would think the creation of that would be up to you to do and not the employee unless that will be part of his job to set the company up for you.

What do you want to know about TN?

You aren’t clear about what you want, or trying to do.

You must complete an application on a form prescribed by the commissioner and submit the completed application to the commissioner.

Is at least eighteen 18 years of age

Has graduated from high school

Has not been convicted of a crime

Has successfully completed ninety (90) hours of education approved by the

Has passed the National Home Inspector Examination developed by the Examination Board of Professional Home Inspectors (EBPHI);

Has a current certificate of general liability insurance in the amount of at least five
hundred thousand dollars ($500,000.00);

Has a current certificate of errors and omissions insurance to cover all home inspection activities

Does he have a licence in another state?

Is he military?

Do you have all of this?

Does PA have a license?

Do they require these standards?

Mr. Hays,

 Sorry if I was unclear. What I was trying to say was that he has wanted to be a home inspector for a long time, but going into business for himself was what he wanted to avoid. He enjoys the actual home inspection process but doesn't want the hassle or risk that comes with running a business. That's why he approached me about simply being an employee of mine. I don't think I want to try standing up a separate business for him to work under, it just seems much simpler for him to fall under my LLC.

Mr. Andersen,

 Sounds like you have a pretty tight grasp on TN's requirements so you may be the man I've been looking for. 

Is at least eighteen 18 years of age-Yes

Has graduated from high school-Yes

Has not been convicted of a crime-No crimes

Has successfully completed ninety (90) hours of education approved by the
commissioner-He’s currently taking the course

Has passed the National Home Inspector Examination developed by the Examination Board of Professional Home Inspectors (EBPHI)-He will once he completes the 90 hour course

Has a current certificate of general liability insurance in the amount of at least five
hundred thousand dollars ($500,000.00)-He’ll fall under mine

Has a current certificate of errors and omissions insurance to cover all home inspection activities-He’ll fall under mine

Does he have a licence in another state?-No

Is he military-Yes

Do you have all of this? I have all of these with the exception of the National Exam. It wasn’t required by PA so I never took it. I have some additional certifications as well which I need to research in regards to reciprocity. For instance, if I have a PA Radon Measurement Firm license, can I supervise radon measurement in another state?

Does PA have a license?-No

Do they require these standards?-Yes with the exception of the National Exam. The insurance requirements are relatively similar as far as E&O and GL but the limits are different. My policy though exceeds the minimum so it should meet both the standards of TN and PA from what I’ve learned so far.

We have both spent some time talking with our contact in TN and he’s been very helpful explaining what TN requires so we’ve got the ball rolling in those regards. I guess I owe you an apology as well since I’m not explaining what questions I have very clearly. I’ve always been a one man show so I have no idea what questions I need to ask when it comes to running a business with more than one employee, especially in a different state. Am I going to have to pay taxes in both states? What qualifications will cross state lines? Is there a place or organization out there that governs interstate commerce that I can use as a resource for rules and regulations? With the formation of Obamacare, do I need to provide health insurance options if he already has his own health insurance? Maybe I’m making this more complicated than it really is but I want to have all my ducks in a row before we pull the trigger. Is it as simple as meeting PA and TN’s home inspector requirements and then letting my accountant figure everything else out?

Where in TN does he want to work?

(I’m working on a reply, this would help).

Okay to start with, if your state requirements do not meet or exceed that of the state of Tennessee you cannot get a license by reciprocity.

He simply must complete all the requirements set by the state.

Depending on where he is located in the state, there is no other business concerns that would make working for you better than working for himself. He simply must file taxes as a sole proprietor, get a local business license if he has an office (where required).

There is no income tax in Tennessee. If he works in Pennsylvania and you have an income tax, he will have to pay that because he works in Pennsylvania technically.

I do not see an advantage at all for him to work for you just so that he can work as a home inspector in another state that’s not even connected. I think you will find that your insurance provider will not look kindly upon the situation and your cost of insurance (and practically everything else) will go up significantly (you’ll get an answer to that soon).

I do not really understand why you want him under your umbrella (but that’s why you’re here because you don’t understand either). You might save a little money for him but I think it will be a giant headache for you and your LLC.

I have never done this nor have I considered doing it, nor have I heard anyone doing it. So just take it for what it’s worth, an opinion. I live very close to the Kentucky/Tennessee border. They both have a license and a reciprocal agreement. You still must comply with the requirements from both states, it just lets me drive across the border. Your situation is quite a bit different.

If he wants to work under someone else, I would recommend doing it with someone in the state. I may be able to get him in touch with someone in his area that knows what they’re doing.

If he wants to go out on his own I recommend that he purchase tax software for small business and do a mockup tax return to see what records he’s required to keep for tax purposes (so he can save as much money as possible right off the bat). Startup expenses are the greatest in the first year and it will help to know how you’re going to handle your tax situation come April 15, not on April 15.