Texas business license: Do you need one, and how to get one

Does Texas require a business license?

Each state has different business licensing rules. In Texas, there’s not a general business license at the state level. However, when forming a business you need one or more of the following: a sales and use tax permit from the Texas Comptroller, an occupational or professional license for a state-regulated trade, permits from the city or county, or a federal license for regulated activities such as alcohol or firearms. 

Keep in mind that while the Texas Secretary of State registers entities and assumed names, it does not issue business licenses. Registration and licensing are two separate processes. 

What licenses and permits do Texas businesses actually need?

Your location, industry, and business activities will determine the license and permits you need in Texas. Here’s a breakdown of the main requirements: 

What is an assumed name certificate? 

Also called a doing business as (DBA) filing, an assumed name certificate is a business name registration rather than a business license. If your business is a sole proprietor or general partnership, you’ll file one with the county clerk in your county for $2. However, if you're a corporation, LLC, or other entity, you’ll file with the Texas Secretary of State and pay $25.

How to get a Texas sales and use tax permit

If your Texas business sells taxable goods or services or sells or leases tangible personal property, you may need a sales and use tax permit from the Texas Comptroller of Public Accounts. The state might also require one if you’re a remote seller, marketplace seller or provider, or out-of-state business with total Texas revenue of $500,000 or more in the past 12 months.

Once you determine a Texas sales and use tax permit applies to your business, follow these steps to get one:

1. Gather the required information

Before you start the application, make sure you have your business legal name, mailing address, ownership details, and North American Industry Classification System (NAICS) code handy. You might need your banking information, federal employer identification number (EIN) or Social Security number, as well. 

1. Complete the online application

Go to the Comptroller’s online tax registration page and choose the option to apply through eSystems for free. Follow the prompts to enter your business, ownership, contact, and tax information. If you’re a sole owner, partner, officer, director, and don’t have a Social Security number, you may need to use Form AP-201 instead.

3.  Understand your tax collection and filing responsibilities

According to The Comptroller, it can take two to three weeks to receive your permit. Once you receive it, get familiar with the applicable sales tax and filing deadlines for your specific business. 

Note that the Texas sales tax rate is 6.25%, but local jurisdictions can add up to 2% in local sales and use taxes for a maximum total rate of 8.25%. Depending on the nature of your business, you’ll need to file monthly, quarterly, or annually, even if you have no sales tax to report. 

Which Texas occupations need a state license?

Some occupations and businesses in Texas require a state license. Here’s a look at some of the most common occupations and the licensing agency associated with them:

Texas does not issue a general contractor license and cleaning businesses don't need a state license either. To look up the license requirements for your particular business, visit the TDLR license search. 

Do Texas cities require a business license?

Most cities in Texas don’t require a general business license, but some might require specific permits before you can open or operate a business. Austin, Dallas, Houston, Fort Worth, and San Antonio, for example, typically follow this approach. 

You may need a certificate of occupancy for your commercial building, health permit for your food business, a sign or alarm permit, or a home occupation permit if you run your business from home. In addition, your municipality or local jurisdiction may have additional licensing requirements. 

To check the local requirements in your area, follow these steps. 

1. Contact your city’s permitting office. Find out which permits, zoning approvals, and occupancy certificates apply to your business type and location.

2. Check with your county clerk. Confirm whether you need to file an assumed name certificate (DBA) or meet any other county-level requirements.

Keep in mind that state licenses and local permits are separate requirements. For example, a license from the Texas Department of Licensing and Regulation (TDLR) or Texas Alcoholic Beverage Commission (TABC) does not automatically meet permitting rules. Be sure to check both levels before you open your business. 

How to get a business license in Texas in 6 steps

If you’d like to open and operate a business in Texas, follow these steps.

1. Register your business or file an assumed name certificate: If you’re forming an LLC or corporation, register it with the Texas Secretary State. However, if you’re a sole proprietor using a business name other than your own, file an assumed name certificate with the county clerk. 
2. Get an employer identification number (EIN): Visit the IRS website to apply for an EIN for free. It can help you hire employees, open a business bank account, and meet federal tax obligations. 
3. Apply for a sales and use tax permit: If you sell taxable goods or services or sell or lease tangible personal property, sign up for a sales and use tax permit through the Texas Comptroller of Public Account. You can do this online via eSystems or Form AP-201.
4. Obtain state occupational licenses: Use Texas.gov’s occupational and professional licensing directory to determine if your business needs a state license(s). Then, apply for any required licenses directly through the appropriate agencies, such as the Texas Department of Licensing and Regulation (TDLR) or the Texas Alcoholic Beverage Commission (TABC).
5. Check city and county requirements: Contact your city’s permitting office and county clerk to verify whether you need a certificate of occupancy, zoning approval, health permit, sign or alarm permit, or other local authorization. 
6. Register as an employer: If you hire employees, find out whether you need to register for a Texas Workforce Commission unemployment tax account and complete required payroll and new-hire reporting. Visit the TWC employer registration portal to begin.

Don’t forget to track expiration dates for any occupational licenses, local permits, and assumed named certificates you need. In addition, keep in mind that annual franchise tax reports are usually due on May 15th. 

How much does a business license cost in Texas?

To open and operate your business in Texas, you’ll likely need a sales and use tax permit, which is free. You may also have to pay $25 for an assumed name certificate with the Secretary of State if you’re an LLC or corporation or a smaller fee with the county if you’re a sole proprietor. 

In addition, you might owe fees for an occupation license and city permit fees. Lastly, there’s a $300 fee for opening an LLC and annual franchise taxes. Fortunately, there is no state income tax in Texas. The state offers diverse loan options to support small businesses, including SBA programs and state-specific initiatives.​

How long does it take to get a Texas business license?

Timing for business licenses and permits in Texas varies. For example, the Texas sales and use tax permit usually takes two to three weeks after you apply online. Occupational licenses, on the other hand, may take several weeks or even months if they require a background check or inspection. 

City and county permits may be issued the same day or take several weeks, depending on local requirements. To determine processing times for your unique situation, check with your city or county government. 

Renewing Texas business licenses and permits

Business licenses and permits in Texas have different renewal requirements. The Texas sales and use tax permit doesn’t expire, but you must continue filing sales tax returns according to the schedule assigned by the Texas Comptroller of Public Accounts.

Occupational licenses issued by the Texas Department of Licensing and Regulation (TDLR) and other state agencies have renewal cycles that vary by profession. Some require annual renewal, while others have two-year cycles or different terms. 

Local business permits may also need periodic renewal, depending on the city, county and type of permit. Certain Texas business entities must file annual franchise tax reports, which are usually due May 15.  In addition, assumed name certificates renew every 10 years. 

Why licensing matters for financing and business credit

Lenders and business credit bureaus may ask your business for proof of registration and licensing. By providing this information, you can convey it’s a legitimate entity and increase your chances of business loan approval with favorable rates and terms. 

Nav is not a lender or a credit bureau. Credit information is provided by third-party sources.

The bottom line

There is no general business license in Texas, but in most cases, you’ll need a sales and use tax permit. Depending on your industry and business, you might also require an occupational license and/or city or county permit. Once your business is up and running, Nav can help you build credit and secure financing. 

See our guides to state business licenses in California, Florida, Georgia, New York, and Washington.

Frequently asked questions