One of the most common surprises for new owners: your LLC and your business licence are two different things. The LLC is your legal entity, registered with the state. A business licence is permission to operate, issued by your city, county, state or a professional board — and most small businesses need at least one. This guide explains the types, who needs them, and how to work out yours.
1. Four types of business licence
- General state business licence — a few states require every business to hold one (see below). Most do not.
- Local business licence — issued by your city or county. Often called a business tax receipt, occupational tax certificate, business privilege licence or BPOL. This is the one most small businesses need.
- Industry or professional licence — for regulated work such as construction, food service, cosmetology, real estate, healthcare, childcare, alcohol, transport and finance.
- Sales tax permit — required in almost every state before you sell taxable goods or services. Technically a tax registration rather than a licence, but treated the same way in practice.
2. States with a general state licence
Only a handful of states make every LLC hold a state-level licence:
- Nevada — State Business License, $200 at formation and $200 a year on renewal.
- Washington — Business licence through the Department of Revenue ($50 application), which issues your UBI number; most cities add endorsements.
- Alabama — Business privilege licence from the county probate office, plus the yearly business privilege tax return (not required if the tax is $100 or less).
- Delaware — Only if you actually do business inside Delaware.
Everywhere else — including Texas, Florida, Georgia, California and Illinois — there is no general state licence, and what you need depends on your locality and industry.
3. City and county licences
This is where most businesses have an obligation. Examples:
- Georgia — most cities and counties (Atlanta, Fulton, Gwinnett, Cobb, DeKalb) require an occupational tax certificate before you trade.
- Florida — a county and often a city business tax receipt.
- California — nearly every city requires a business licence or business tax certificate, renewed yearly.
- Virginia — a BPOL (business, professional and occupational licence) tax set by each city or county.
- Illinois — Chicago and many suburbs require a city business licence; Illinois has no general state licence.
- Texas — no state licence, but many cities require permits for specific activities (food, signage, home occupation).
Fees are usually modest — often $25 to $150 a year — but operating without one can mean fines and back payments.
4. Industry and professional licences
Regulated trades are licensed by a state board or agency regardless of where you form your LLC. Common examples: contractors and electricians, restaurants and food trucks (health permits), salons and barbers, real estate agents, accountants, healthcare providers, daycare, trucking, and anything involving alcohol, tobacco or firearms. Federal licences apply to a few areas such as broadcasting, aviation, alcohol production and investment advice.
5. Sales tax permits
If you sell taxable goods (physical products, and in some states digital goods or certain services) you must register with the state tax agency before your first sale. The permit is usually free or low cost — for example free in Texas, $16 for a two-year period plus a refundable $50 deposit in Colorado. Five states (Alaska, Delaware, Montana, New Hampshire and Oregon) have no general sales tax. Remote sellers may also need to register in other states once their sales there pass that state's threshold.
6. Online and home-based businesses
Running an online store or a consultancy from home does not exempt you. Typically you still need your city or county business licence (some cities call it a home occupation permit) and a sales tax permit if you sell taxable goods. Non-US owners of a US LLC with no US office or staff usually have no city licence to get, but still register for sales tax where required.
7. How to find out what you need
- Check your city website for a business licence or business tax page.
- Check your county — some counties license businesses outside city limits.
- Check your state licensing agency for your industry.
- Register for sales tax with the state tax agency if you sell taxable goods.
Or let us do the research: our business licence research service identifies every federal, state, county and city licence and permit your LLC needs, with the forms and fees, so nothing is missed.
General information, not legal advice. Licence requirements and fees are set by each state, county, city and agency and change over time. September 2026.