I was told by a contractor, that you need a "contractors license" to do trashouts. I was under the impression that all you needed was E & O insurance. Does anyone know if this is true?

Sounds goofy to me. Check local codes and owner preferences. A business license, truck, and dump fees--go?

Here in New Jersey you need a waste hauling permit from the DEP.
There are 2 types. One is for contractors but it is only supposed to be for trash they make themselves (construction projects).
But in order to just do clean-outs, we need to have a waste hauler license. It took almost 2 years for me to get the later permit.

I believe the answer to this question will depend on the location. In CA some tasks performed by preservation vendors do require permits that can only be obtained by a licensed contractor or the homeowner (boarding a window or strapping a water heater for example). These permits are usually obtained "over the counter" and do not require an inspection. Other tasks such as transporting large amounts of HHW and tires also require special permits or licenses - requirements which are usually ignored by the vendor and the transfer facility (in our experience).

In CA the CSLB (Contractors State License Board) states that any project totaling more than $500 in labor and materials can only be performed by a licensed contractor - defining "project" as it relates to property preservation is where it gets a bit unclear in my opinion. Is a trashout considered a project? Considered by itself a trashout doesn't truly alter a property, only what is unattached inside or outside the home is removed. That being said, it is extremely rare for us to complete a property from lock change to trashout and landscaping for less than $500. Perhaps it will depend on your interpretation, but I believe that something more than a pickup truck and a lawnmower should be required to call yourself a property preservation vendor. Consider of course that you are reading the opinion of a licensed general contractor, fully insured and bonded, competing with guys hanging out in the Home Depot parking lot playing dice all day.

That is insane. I read recently the Empire State Building was constructed in 410 days. Today they'd be in permiting process for 410 days, environmental impact study for 410 days, labor negotiations for 410 days. Too much red tape.

Tell me about it. I have a contractors license (4 months) DEP permit (almost 2 years), full g/l and w/c insurance plus taxes then I have to compete with those with no insurance, no permits and no taxes.
Doesn't make it easy.