The Complete Guide to Getting a Business License
"How do I get a business license?" sounds like one question, but the answer is really a short checklist. The United States has no national business license, and only a handful of states issue a general statewide one. Instead, licensing is split between federal agencies (for a few regulated industries), state agencies (tax registration and professional licenses) and the city or county where you operate (general business licenses, zoning and permits). Once you know which layers apply to you, each application is usually simple.
What Is a Business License?
A business license is permission from a government agency to carry on a particular activity in a particular place. Some are general — a city business license or tax receipt that every business in town must hold. Others are specific to an activity: a contractor's license, a food service permit, a liquor license, a sales tax permit. Forming an LLC or corporation is not a business license; it creates the legal entity, and the entity then applies for the licenses it needs.
Federal, State and Local Licenses
Federal licenses
Most small businesses need no federal license at all. Federal licensing applies to specific regulated activities, including alcohol production, importing and wholesale (TTB), firearms and explosives (ATF), aviation (FAA), commercial trucking and interstate transport (FMCSA/DOT), radio and television broadcasting (FCC), investment advice and securities (SEC), and certain agriculture, fishing and wildlife activities (USDA, NOAA, US Fish and Wildlife Service). If your business is not in one of these industries, skip to the state level.
State licenses and registrations
Every state has two main kinds of requirement. The first is tax registration: a sales tax permit (also called a seller's permit, vendor's license, certificate of authority or resale license depending on the state) if you sell taxable goods or services, plus employer withholding and unemployment insurance accounts if you hire. The second is professional and occupational licensing through state boards — for accountants, nurses, real estate agents, cosmetologists, electricians, plumbers, childcare providers and dozens more. A few states, such as Nevada, Delaware, Alaska and Washington, also issue a general state business license that most companies must hold and renew each year.
Local licenses and permits
This is where most "business licenses" actually come from. Cities and counties issue general business licenses or business tax receipts, zoning and home-occupation permits, building and sign permits, health permits for food businesses, and fire department approvals. Requirements differ from one town to the next, so always confirm with the clerk's office for the exact address where you will operate — and check zoning before you sign a lease.
The 6 Types of Licenses and Permits
| Type | Issued by | Who typically needs it |
|---|---|---|
| General business license | City or county (statewide in a few states) | Nearly every business with a physical or home location |
| Sales tax permit | State department of revenue | Anyone selling taxable goods or services, including online sellers |
| Professional or occupational license | State licensing board | Regulated professions and trades |
| Health and safety permits | County or city health and fire departments | Restaurants, food trucks, salons, childcare, gyms |
| Zoning and building permits | City planning or building department | Any business opening, renovating or signing a new location — and many home-based businesses |
| Federal license | Federal agency (TTB, ATF, FAA, FMCSA, FCC, SEC…) | Alcohol, firearms, aviation, trucking, broadcasting, securities and similar industries |
A DBA (doing business as) registration is often mentioned alongside licenses. It is not a license — it registers a trade name — but many cities ask for it before issuing a local license if you operate under a name other than your legal entity name. See our DBA filing service.
How to Get a Business License: 5 Steps
- Form your business and get an EIN. Register your LLC or corporation first so every license is issued to the company rather than to you personally. Then obtain an Employer Identification Number from the IRS — agencies ask for it on almost every application.
- Identify every license that applies. Start with the federal list above, then your state's licensing portal and department of revenue, then the city and county for your business address. Write down each license, the issuing agency, the fee and the documents required.
- Register for state taxes. Apply for your sales tax permit before you make your first taxable sale — most states issue it online within days and many charge nothing. Open employer accounts before your first payroll.
- Apply for local and industry licenses. Submit each application with proof of formation, your EIN, your lease or home-occupation approval, insurance certificates where required and the fee. Some licenses need an inspection (food, fire, building) or an exam (contractors, cosmetology) before approval.
- Display, track and renew. Post the licenses that must be visible to customers, keep digital copies with your company records, and add every renewal date to a calendar. Most local and state licenses renew annually; letting one lapse can mean penalties or re-applying from scratch.
Getting a Business License Online
You can get most business licenses online today. State sales tax permits and employer accounts are issued through state revenue portals; many professional boards accept online applications; and a growing number of cities and counties have online business license portals. The exceptions are licenses that require a physical inspection — food service, fire safety, building and some home-occupation permits — where you apply online but approval follows the inspection. Be cautious of third-party websites that charge for "official" licenses: you always apply to the government agency itself, and a research service like Incofile's tells you exactly where to apply and what to bring.
How Much a Business License Costs
Costs vary with the state, city and industry, but the pattern is consistent:
- Local general business licenses usually range from about $15 to a few hundred dollars a year; some cities base the fee on revenue or number of employees.
- State sales tax permits are free in many states, with a small fee or security deposit in some.
- General state business licenses, where they exist, are typically a yearly fee — Nevada's State Business License is $200 a year for most entities, Alaska's is $50 a year, Delaware's starts at $75 a year, and Washington's Business License Application carries a one-time opening fee.
- Professional, health, liquor and contractor licenses have their own fee schedules and can run from under $100 to several thousand dollars for liquor licenses in some cities.
Fees change, so confirm the current amount on the agency's website before you pay. Government fees are always separate from any formation or research service fee.
How Long It Takes
Simple registrations are fast: sales tax permits and many city business licenses are issued within a few days to two weeks. Professional licenses, health permits, contractor licenses and anything involving an inspection or exam can take several weeks to a few months. Because licenses are issued in the company's name, the formation of your LLC or corporation sits on the critical path — see how long it takes to form an LLC in each state.
Business Licenses for LLCs
Forming an LLC does not replace a business license, and a business license does not create an LLC. The two work together: the LLC gives you limited liability and a legal entity, and the licenses give that entity permission to operate. The right order is form the LLC, get the EIN, register for state taxes, then apply for local and industry licenses in the LLC's name. If you already hold licenses as a sole proprietor and then form an LLC, most agencies require you to update or re-issue the license to the new entity. Our guide Do I need a business license for my LLC? covers the common home-based and online-business situations.
Business License Rules by State
Each of the 40 state guides below explains the state tax registration, the main local licenses and the professional boards for that state.
| State | General state license? | What most businesses register for |
|---|---|---|
| Alabama | Yes | State business privilege license from the county probate judge, renewed every October |
| Arizona | No | Transaction Privilege Tax (TPT) license — $12 per location plus city fees |
| Arkansas | No | $50 sales tax permit; city business licenses such as Little Rock |
| California | No | City business license or tax certificate; seller's permit from the CDTFA for taxable sales |
| Colorado | No | State sales tax license; separate licenses in home-rule cities such as Denver |
| Connecticut | No | Sales and use tax permit ($100 one time); trade name with town clerk |
| Delaware | Yes | State business license from the Division of Revenue, renewed yearly, plus local licenses |
| Florida | No | County and city business tax receipt; sales tax registration with the Department of Revenue |
| Georgia | No | Occupational tax certificate from your city or county; sales tax number from the Department of Revenue |
| Idaho | No | Free seller's permit; contractor registration for jobs over $2,000 |
| Illinois | No | Registration with the Department of Revenue (MyTax Illinois); Chicago and local licenses |
| Indiana | No | Registered Retail Merchant Certificate — $25 per location, valid two years |
| Iowa | No | Free sales tax permit; contractor registration for $2,000+ a year in construction |
| Kansas | No | Free tax registration with KDOR; city licenses by business type |
| Kentucky | No | Sales and use tax permit; local occupational license tax (e.g. Louisville, Lexington) |
| Louisiana | No | Annual parish or city occupational license; state sales tax through LaTAP |
| Maryland | No | Trader's license from the Clerk of the Circuit Court; Comptroller sales tax license |
| Massachusetts | No | MassTaxConnect registration and ST-1; business certificate for trade names |
| Michigan | No | Free sales tax license from the Department of Treasury; local licenses |
| Minnesota | No | Sales and use tax account with the Department of Revenue; city licenses by business type |
| Mississippi | No | Free sales tax permit; annual city business license |
| Missouri | No | Missouri Retail Sales License before your first sale; city business licenses |
| Nebraska | No | Free sales tax permit; contractor registration with the Department of Labor |
| Nevada | Yes | State Business License from the Secretary of State, renewed yearly, plus city or county license |
| New Jersey | No | Free NJ-REG and Business Registration Certificate within 60 days |
| New Mexico | No | Free gross receipts tax registration; Albuquerque license per location |
| New York | No | Certificate of Authority for sales tax; NYC agency licenses for many activities |
| North Carolina | No | Free sales and use tax registration with the Department of Revenue; local zoning and permits |
| Ohio | No | Vendor's license for taxable sales; local permits |
| Oklahoma | No | Sales tax permit — $20 for three years; city activity licenses |
| Oregon | No | No sales tax; Portland and Multnomah County business tax registration |
| Pennsylvania | No | Sales tax license on myPATH; Philadelphia Commercial Activity License and local registration |
| South Carolina | No | $50 Retail License per location; city and county licenses renewed by April 30 |
| Tennessee | Yes | Business tax license from the county and city clerk ($15) |
| Texas | No | Sales and use tax permit from the Comptroller; local permits by city |
| Utah | No | City, town or county business license; free sales tax license |
| Virginia | No | Local BPOL license in most cities and counties; Virginia Tax registration |
| Washington | Yes | State business license and UBI from the Department of Revenue, with city endorsements |
| Wisconsin | No | Seller's permit through Business Tax Registration — $20 for two years |
| Wyoming | No | Sales and use tax license from the Department of Revenue; few local requirements |
"General state license" means one statewide license that most businesses must hold regardless of industry. Every state still requires tax registration and professional licenses where they apply. Forming in a state? See the state-by-state LLC guides for filing fees and timelines.
Renewals and Staying Compliant
Most business licenses renew every year, sometimes every two years, and many agencies do not send reminders. Keep a compliance calendar that lists each license, its renewal date and fee, alongside your state annual report and registered agent renewal. Update your licenses whenever you move, change your business name, add a location or change ownership. Incofile clients see these dates in the client portal's compliance calendar with reminders before each deadline.
How Incofile Helps
Incofile can form your LLC, obtain your EIN and research every license and permit your business needs at the federal, state, county and city level. You receive a clear report listing each license, the agency that issues it, the fee and how to apply, delivered to your 24/7 client portal. See the business license research service, and if you sell products, read how a resale certificate lets you buy inventory tax-free.
Frequently Asked Questions
How do I get a business license?
Form your business entity, get an EIN, find out which federal, state and local licenses apply to your activity and location, then apply to each agency — most applications are online. Keep copies and note the renewal dates.
Do I need a business license to sell online?
Usually yes in some form. Most states require a sales tax permit or seller's permit before you sell taxable goods, and your city or county may still require a local business license even for a home-based online store.
How much does a business license cost?
Local business licenses typically cost between about $15 and a few hundred dollars a year, state sales tax permits are often free, and professional or industry licenses have their own fees. The total depends on your state, city and industry.
How long does it take to get a business license?
Many local licenses and sales tax permits are issued within days or a couple of weeks. Professional, health, liquor and construction licenses can take several weeks or months because they involve inspections or exams.
Does an LLC need a business license?
Yes. Forming an LLC registers the company with the state; it is not a permit to operate. The LLC still needs whatever federal, state and local licenses its activity and location require, issued in the LLC's name.
Which states require a general business license?
Only a few states issue one general statewide business license — for example Nevada, Delaware, Alaska and Washington. In most states licensing happens at the city or county level plus state tax registration and any professional license.
Can I get a business license online?
In most places, yes. State tax permits are almost always issued online, and many cities and counties now accept online applications. Some local licenses still require an in-person inspection before approval.
What happens if I operate without a business license?
Penalties range from fines and back fees to being ordered to close until you comply. Operating without a required license can also void insurance claims and make it harder to open bank accounts or sign leases.