When starting a business, one of the immediate tasks business owners need to take care of is getting any required business licenses. Those may include general business licenses, local business licenses and professional or occipital licenses. Failing to follow business licensing requirements can result in fines or even get your business shut down. Here’s what you need to know.
What Is A State Business License
If you’re starting a business or nonprofit, you may be wondering what a state business license is. A state business license is a government-issued document that provides proof that your new business is legally allowed to operate in a specific state. This can include an operating license or it could be a seller’s license that allows you to sell specific products in that state.
Some states require business licenses at the state level, but oftentimes entrepreneurs can obtain business licensing at the city or local level as well. Requirements vary depending on where your business is located as well as the types of business activities you’re engaged in.
Do You Need A Business License in Your State?
If you have an existing business, it’s important to find out if your business structure will require a business license and go through the process of filling out business license applications.
Every state (as well as some counties and cities) require you to have at least one type of business license if you plan to conduct business there.
Typically, filing for the required business licenses comes after you decide on your business name, business entity, and whether it will operate as a sole proprietor, a partnership, a limited liability company, or a corporation.
Running a business out of your home will likely require at least one basic business permit or license, such as a sales tax permit. If you’re opening a local business such as a restaurant or daycare, you’ll need more licenses to comply with that industry’s regulations. If you are renting commercial real estate, you may need a zoning permit that ensures that what you want to do with the space is consistent with what the space was zoned for.
It’s important that you understand what licenses you are required to carry so that your business is not subject to any penalties with the IRS.
How to Get A Business License
Getting a business license in your state can be a smooth do-it-yourself process. An employer identification number (EIN) is often needed before you can apply for a business license and is a simple process to obtain in every state. This is similar to having a social security number, but for your business and is also free to get.
You will also need to provide basics like your business location and contact information. Applications are often readily available to file online or you will need to print out your application and bring necessary documentation to your local government business license department.
How Much Does A Business License Cost?
The cost of obtaining a business license can vary depending on industry, state and/or city, and whether is product-based, in-home, or utilizing a building to do business out of. It’s important to check with your local area and identify how many business licenses your business type will need. Costs will range from as low as $20 to as high as a couple hundred dollars.
Resources for Business Licensing in Each State
Below you’ll find a list of resources for each state. In addition, your state’s Secretary of State website provides necessary information on what state business licenses you need.
|State||Resource||What the Resource Offers|
|Alabama||Atlas Alabama||Gives a comprehensive reference guide that breaks down licensing by your business’ industry.|
|Alaska||Alaska Commerce Department: Licensing||Provides a searchable business license database as well as instructions for applying, either online or via mail.|
|Arizona||AZcommerce.com||Offers quick links to licensing offices at the state, county, and city level.|
|Arkansas||City Applications||Arkansas breaks down licensing based on the city versus the whole state.|
|California||California.gov||This site has all pertinent information and takes you directly to the portal to get started on obtaining a business license.|
|Colorado||Colorado Business Checklist||This site will help you understand what you will need at the federal, state, and local level.|
|Connecticut||CT’s Business Response Center||Search by keyword, agency, or trade to get links for info on permits/licenses you will need.|
|Delaware||Delaware One Stop Business Registration & Licensing||This is a one-stop business registration and licensing website—100% online.|
|Florida||Florida Department of Business and Professional Regulation||This allows you to see permit/license requirements for a limited number of professions. Some business categories have an online application process.|
|Georgia||Georgia Start a Small Business||The Georgia Secretary of State has limited resources to help you determine what licenses you need. The site can be confusing, as it bats you from one site to another.|
|Hawai’i||County of Hawai’i||According to the site, all licenses have a term of one year, except for Purchasing, Wrecking and Rebuilding Cars licenses.|
|Idaho||Business.Idaho.Gov||Offers the full list of where to go to get your business license based on industry.|
|Illinois||Illinois.gov: Registration, Licenses, & Permits||There are specific links that direct you to city-level websites with more specific permit/license information.|
|Indiana||In.Biz||On the right side of the site, click “Specific Licensing & Permitting Issues”.|
|Iowa||Iowa Source Link||Gives you a search engine of license information with links to department contact information.|
|Kansas||KS Biz||Offers a directory of who to call based on your industry and city and county sites.|
|Kentucky||Kentucky One-Stop Business Portal||Includes links for more information on various types of permits and licenses.|
|Louisiana||GeauxBiz||Register an account for your business to create a checklist of actions to take, including licenses required.|
|Maine||Maine.gov: Business Licensing||Includes links to some common licenses, as well as a link to the local government portal for local licenses, and a link to business resources by profession.|
|Maryland||Maryland OneStop||Shows a list of what permits/licenses you will need, fees, processing times, and what department requires the permit.|
|Massachusetts||Mass.gov: Professional Licenses & Permits||In-depth details on licenses needed by profession, as well as steps required and online application process.|
|Michigan||Michigan State License Search||Alphabetical list of professions and information on licenses under each.|
|Minnesota||License Minnesota||Browse for license by topic or agency, or use the A to Z list.|
|Mississippi||Mississippi Boss One Stop Shop||This MS government website provides information about starting a business in the state.|
|Missouri||Missouri Division of Professional Registration||Houses all information on business licensing in the state of Missouri.|
|Montana||Small Business Development Center Network (Montana)||Shows all options for licensing by business category.|
|Nebraska||Nebraska.gov: Business Licensing||Provides links for certain types of licenses.|
|Nevada||Nevada Secretary of State||Has the option to apply for a state business license.|
|New Hampshire||New Hampshire Business One Stop||Includes links for more information on various types of permits and licenses.|
|New Jersey||New Jersey Business Portal||Includes links for more information on various types of permits and licenses.|
|New Mexico||New Mexico Regulation & Licensing Department||Detailed information and FAQs on various types of permits and licenses.|
|New York||New York State: Business Wizard||New York’s Business Wizard gives you a custom checklist of business requirements in your area.|
|North Carolina||North Carolina (Secretary of State)||Gives direct access to the contact for applying for licensure.|
|North Dakota||State of North Dakota New Business Registration||Offers full clickable lists of where to apply based on your industry.|
|Ohio||Ohio.gov: Starting a Business||Contact your county or local government to find out licensure for your type of business.|
|Oklahoma||Oklahoma Dept of Commerce: Business Licensing & Operating Requirements||Includes high-level overview of each profession’s requirements as well as links for more information.|
|Oregon||LicenseInfo.Oregon.gov||This site allows you to search by keyword for licenses you seek, search popular licenses.|
|Pennsylvania||PA Biz Online||This is a one-stop business registration and service licensing website—100% online.|
|Rhode Island||Rhode Island Dept of Business Regulation||Rhode Island has a simple online licensing process.|
|South Carolina||Labor Licensing Regulation||Applying for a license is as simple as just clicking your industry.|
|South Dakota||South Dakota Department of Revenue||Here, apply for your business tax license for specific industries.|
|Tennessee||Tennessee Department of Revenue||Offers information on who is required to have a business license in Tennessee.|
|Texas||Texas Business Licenses and Permits Guide||Detailed PDF with information and links for every type of business license.|
|Utah||Utah Dept of Commerce: Division of Occupational and Professional Licensing||Apply for a license based on license type. It offers a list.|
|Vermont||Vermont Department of Taxes||While Vermont does not require a state business license, you will need a business sales tax account, which you can apply for on this page.|
|Virginia||Virginia State Government Site||The site divides the list based on business licenses in the state.|
|Washington||Washington DOL: Business & Professional Licenses||Detailed information on each type of license required in Washington state.|
|West Virginia||West Virginia One Stop Business Portal||Details on each business license required by the state of West Virginia, as well as information at the city level.|
|Wisconsin||Wisconsin Dept. of Safety and Professional Services: License/Permit/Registration||This website offers professional licensing information based on industry.|
|Wyoming||Wyoming Business Council||For most businesses in Wyoming, a business license is not required.|
Business Formation Services That Can Help
Here’s a list of business formation services that can help:
- Your local SBDC or town/city clerk: If you ask a SCORE mentor, they will likely tell you that this is the best place to start, and in many cases this is true. Many of the licenses/permits you may need to start your business are city-level permits. Your city clerk should have a full list of licenses you will need, and this is the best way to make sure you have covered all your bases.
- CityApplications.com: City Applications has contact info at the city-level for business licenses and permitting information.
- SBA.gov: The Small Business Administration has information on permits for federal licenses in different industries, but little on state licensing.
- SBA.com: Not to be confused with the Small Business Administration, Small Business Advice has information on starting and running a business, including business permitting and licensing specifics by state. Some states have more detailed information than others. This is not an official government website.
This article was originally written on February 5, 2020 and updated on September 21, 2022.