Illinois business license: do you need one, and how to get one
Written byMichelle Lambright Black
Reviewed by Robin Saks Frankel
Summary
- Illinois doesn’t issue a general state business license, so the licenses you need depend on what your business does and where it operates.
- Most Illinois businesses need to register with the Illinois Department of Revenue at no cost, and the taxes that apply to your business determine whether you get a Certificate of Registration or a license.
- Chicago requires a city license for most businesses, and Illinois requires state licenses for certain trades, including roofing and plumbing.
Does Illinois require a business license?
Illinois doesn’t issue a general business license. However, most businesses need to register with the Illinois Department of Revenue to collect sales tax or withhold taxes from employees’ paychecks. Depending on what you do and where you operate, you may also need a state occupational license, a city or county license, or a federal license for certain business activities.
Also, registering your LLC or corporation with the Illinois Secretary of State isn’t the same as applying for a business license. If your business needs a license or permit, you’ll still need to apply through the agency that issues it.
What licenses and registrations do Illinois businesses actually need?
Start with what your business does and where you plan to operate. A Chicago shop that sells wine, for example, may need to register for state taxes and get both city and state liquor licenses.
Illinois business licenses and registrations at a glance
What it is | Who issues it | Who needs it | Cost |
Certificate of Registration | Illinois Dept. of Revenue via MyTax Illinois | Businesses with taxable sales or employees subject to withholding | Free to register |
Occupational license | State agency for the trade (e.g., Illinois Dept. of Financial and Professional Regulation, Dept. of Public Health, or Liquor Control Commission) | Roofers, plumbers, liquor retailers and other regulated businesses | Varies by license |
City or county license | City, village or county | Most Chicago businesses, businesses in unincorporated Cook County and some suburban businesses | Varies by location |
Federal license or permit | Federal agency, such as ATF or FDA | Businesses in federally regulated industries | Varies by agency |
If you use an assumed business name, also called a doing business as or DBA name, you may need to register it. Sole proprietors and general partnerships file with the county clerk. LLCs and most corporations file with the Illinois Secretary of State. Registering your business name is separate from getting a business license.
How to register with the Illinois Department of Revenue
If you plan to sell taxable goods or services, withhold Illinois income tax from employees’ paychecks or pay certain excise taxes, register with the Illinois Department of Revenue (IDOR) before you start making sales or hiring employees. Registration is free.
Here’s what you need and how to get started.
1. Gather your business details. You’ll need your legal business name, business structure, locations and a description of what your business does. Have your federal employer identification number (EIN) handy if you have one. The application also asks for information about your owners, partners or officers, depending on how you set up your business.
2. Apply online or by mail. On the MyTax Illinois website, choose “Register a New Business (Form REG-1).” You can also mail Form REG-1 to the address on the application. IDOR typically processes online applications in one to two business days. If you apply by mail, allow up to eight weeks for processing.
3. Find your Certificate of Registration. If you register to collect sales tax, your Certificate of Registration lists your Illinois account ID and the taxes you’re responsible for paying. You can find a copy in MyTax Illinois under “View Account Letters.” For some taxes, IDOR issues a license instead. But you’ll still need to apply separately for any city or occupational licenses your business requires.
If your business sells general merchandise, the Illinois state sales tax rate is 6.25%. Local taxes can raise the amount you need to collect from customers. Use the state’s Tax Rate Finder to check the rate for your sales location.
Do you need a Chicago business license?
Most Chicago businesses need a license from the city’s Department of Business Affairs and Consumer Protection before they can legally open. Unless you qualify for an exemption or need a license for a specific activity, you’ll need a Limited Business License. In 2026, the Limited Business License costs $500 and covers two years.
Before you sign a lease, check that Chicago’s zoning rules allow your type of business at that address. Running a business from home generally requires a Regulated Business License for a home occupation, which costs $1,000 for two years.
Outside Chicago, check the city and county rules for your business address. Springfield and Rockford don’t require a general business license, but most businesses in unincorporated Cook County need one.
Which Illinois occupations need a state license?
Some business owners need a state license to work in Illinois. Whether your business needs one depends on the type of work you do. Here are a few common examples of occupations that may require a license and where to apply.
- Health care, cosmetology, real estate, accounting and roofing. Nurses, cosmetologists, real estate brokers, CPAs and roofing contractors all get their licenses through the Illinois Department of Financial and Professional Regulation (IDFPR).
- Plumbing. Plumbers apply for a license through the Illinois Department of Public Health.
- Food and alcohol. Before you open a restaurant or food truck, check with your local health department about permits. To sell or serve alcohol, get a license from your local liquor commission first, then apply to the Illinois Liquor Control Commission for a state license.
- Child care. For a day care center or home day care, check the licensing requirements with the Illinois Department of Early Childhood.
Illinois doesn’t require a state general contractor license, but your city or county may require one. Routine work like cleaning homes or mowing lawns generally doesn’t require a state occupational license either. But you’ll need a license from the Illinois Department of Agriculture to apply pesticides to a customer’s lawn.
To check the status of a professional license, you can use IDFPR’s License Lookup.
How to get a business license in Illinois in 6 steps
Here’s how to figure out which licenses and registrations your Illinois business needs and where to apply. You can skip any steps that don’t apply to your business.
1. Register your business or its name. To start an LLC in Illinois or form a corporation, file with the Illinois Secretary of State. You can use a business formation service if you’d like help with the paperwork. As a sole proprietor, register your assumed name with your county clerk if you use a business name other than your full legal name.
2. Get an EIN if you need one. You’ll need an employer identification number (EIN) if you hire employees or run a partnership or corporation. You can get one for free directly from the IRS.
3. Register for state taxes. Before you make taxable sales or hire employees, register with the Illinois Department of Revenue. You can file Form REG-1 for free through MyTax Illinois.
4. Check whether your work requires a state license. Start with the Illinois Department of Financial and Professional Regulation’s list of regulated professions. Other agencies license certain trades. Plumbers, for example, apply through the Illinois Department of Public Health.
5. Apply for any local licenses. Check with your city and county before you open. Give them your business address and a description of the work you plan to do so they can tell you which licenses you need.
6. Register when you hire employees. When you hire employees, register with the Illinois Department of Employment Security through MyTax Illinois. Businesses that have employees from the start must register within 30 days of opening.
Once you have your licenses, add a reminder to your calendar for each renewal. LLCs and corporations also need to file an annual report with the Illinois Secretary of State.
How much does a business license cost in Illinois?
It’s free to register with the Illinois Department of Revenue. For many businesses, that’s the only state registration they need. You may still need a local license, depending on what your business does and where you operate. In 2026, for example, Chicago charges $500 for a two-year Limited Business License. State occupational license fees vary by profession.
You may also need to pay to register an assumed business name. For example, a sole proprietor pays $50 to file with the Cook County clerk. An LLC pays $120 to register an assumed name with the Illinois Secretary of State in 2026.
If you form an LLC, budget separately for the filing fees and any business formation service you choose to use. Illinois charges $150 to form a standard LLC and $75 to file each annual report. Any licenses your business needs are separate.
How long does it take to get an Illinois business license?
The Illinois Department of Revenue typically processes online tax registrations in one to two business days. For paper applications the department lists four to six weeks but recommends allowing up to eight for processing.
Chicago aims to process most business licenses in about 15 days, so allow a few weeks and check zoning before you sign a lease. For a state occupational license, timing depends on your profession and whether you need to pass an exam or schedule an inspection. Check with your licensing agency before you set an opening date.
Renewing Illinois business licenses and registrations
The Illinois Department of Revenue automatically renews your sales tax Certificate of Registration as long as you file your returns and pay what you owe. Update your account through MyTax Illinois if your business moves, changes owners or takes on new work that affects your taxes.
You’ll need to renew most Chicago business licenses every two years. For an occupational license, check with your licensing board to see when yours expires and whether you need continuing education to renew.
LLC and corporation owners have one more date to put on the calendar. Remember to file your annual report with the Illinois Secretary of State to keep your business in good standing.
Why licensing matters for financing and business credit
When you apply for a business loan, a lender may ask for a copy of your business registration or license. A business credit bureau may also ask for those documents to verify your company’s name and address. Keep them handy and use the same business information when you open accounts that report your payments. Those payments may help you establish business credit.
The bottom line
Illinois doesn’t issue a general business license, so start by registering with the Illinois Department of Revenue if required, then apply for any license your trade requires. Check your city’s rules before you open, especially in Chicago, where most businesses need a license. Once you’ve set up your business, Nav offers tools to help you work toward building business credit and compare financing options.
Operate in more than one state? See Nav’s other state licensing guides including: California, Florida, Georgia, New York, Texas, Nevada, and Washington.