Hawaii Contractor License Exam — All Questions

Under HRS §444-9, what does Hawaii require before a person may act or hold themselves out as a contractor?

• a.Only a county business tax receipt
• b.A valid Hawaii contractor license for the work being performed✓
• c.Nothing, as long as the work is under $10,000
• d.A one-time registration with the Department of Taxation

HRS §444-9 makes it unlawful to act, or offer to act, as a contractor in Hawaii without holding a license for that work. Licensing is the gateway requirement, and operating without a license exposes the person to civil and criminal penalties.HRS §444-9

An unlicensed operator performs contracting work in Hawaii and then sues the owner for the unpaid balance. Under HRS §444-22, what is the result?

• a.The operator may collect the full contract price
• b.The operator may collect the cost of materials only
• c.The operator cannot bring or maintain any action to collect compensation for the work✓
• d.The owner must pay, plus a statutory penalty to the operator

HRS §444-22 bars a person who engaged in contracting without a license from bringing or maintaining any court action to collect compensation for that work. This loss of the right to sue for payment is Hawaii's strongest civil deterrent to unlicensed contracting.HRS §444-22

Which situation fits Hawaii's owner-builder exemption from the licensing requirement?

• a.An owner who builds or improves a structure on their own property with their own labor, signs the required disclosure, and does not offer it for sale or lease within one year✓
• b.A developer building ten homes a year for sale to the public
• c.A property manager hiring day laborers to remodel rental units for investors
• d.A handyman advertising statewide remodeling for hire

HRS §444-2.5 lets an owner build or improve their own property using their own labor without a license, provided they sign the owner-builder disclosure and do not sell or lease the property within one year of completion. Building for sale to the public is contracting and requires a license.HRS §444-2.5 (owner-builder exemption)

What does Hawaii require a licensed contractor to include in its advertising?

• a.Nothing beyond a phone number
• b.The owner's home address
• c.A notarized copy of the contract
• d.The contractor's license number, so consumers can verify the license✓

Hawaii requires a licensed contractor to display its license number in advertising and on contracting documents. This lets consumers verify the license with the CILB and helps the board identify unlicensed operators who advertise without a number.HRS Ch. 444 (advertising)

How does Hawaii's mechanics' and materialmen's lien process under HRS Chapter 507, Part II, differ from a typical mainland county lien filing?

• a.There is no lien remedy in Hawaii
• b.The claimant applies to the circuit court, and a hearing is held before the lien attaches✓
• c.The lien attaches automatically with no filing or notice
• d.Liens are filed only with the county tax collector and never involve a court

Hawaii uses a court-driven lien process. Under HRS Chapter 507, Part II, the claimant files an application with the circuit court (generally within about three months of completion) and a hearing is held before the lien attaches. This differs from states where a lien is perfected by a simple recorder filing.HRS Ch. 507, Part II

Instead of a retail sales tax, Hawaii imposes which tax on a contractor's business gross income?

• a.The General Excise Tax (GET), generally 4% (4.5% on Oahu with the county surcharge)✓
• b.A 6% statewide sales tax
• c.No transaction tax of any kind
• d.A flat $500 annual privilege fee only

Hawaii has no sales tax; it levies a General Excise Tax (GET) under HRS Chapter 237 on business gross income, generally 4% (4.5% on Oahu with the county surcharge). Contractors must obtain a GET license and pay GET on their gross receipts.HRS Ch. 237 (General Excise Tax)

Beyond losing the right to sue for payment, what additional exposure does an unlicensed contractor face under Hawaii law?

• a.Only a warning letter from the board
• b.No further exposure of any kind
• c.Civil fines and criminal penalties for unlicensed contracting✓
• d.Automatic issuance of a license after a first offense

Under HRS §444-23 and related provisions, unlicensed contracting can bring civil fines and criminal penalties in addition to the HRS §444-22 bar on collecting compensation. The combined civil and criminal exposure makes unlicensed work a serious risk in Hawaii.HRS §444-23 (penalties)

Which of the following is a recognized ground for the CILB to suspend or revoke a Hawaii contractor's license?

• a.Completing a project ahead of schedule
• b.Abandoning a construction project without legal excuse✓
• c.Carrying more insurance than the minimum
• d.Hiring a licensed subcontractor

HRS §444-17 lists grounds for discipline, including abandoning a project without legal excuse, willful or fraudulent conduct, and other violations of the contractor law. Good practices like finishing early or carrying extra insurance are not grounds for discipline.HRS §444-17 (grounds for discipline)