How to Get a Business License in Your State

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.

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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.

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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.

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.

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Form an LLC, corporation, or nonprofit, and get an EIN, business license, or registered agent service. Use our research to quickly and easily find the right business formation service for you

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This article was originally written on February 5, 2020 and updated on September 21, 2022.