How to Get a Business License
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A business license gives your business permission to offer a designated service or product or to operate in a certain location. Most businesses will need one or more business licenses before they can begin operating. Getting a business license typically involves filing an application and paying a fee.
Check out our guide below to learn more about what licenses your business may need and how to get them.
Getting a Business License
- What is a business license?
- Business license vs registration
- What is a professional license?
- Where do I get a business license?
- What federal agencies issue licenses?
- What states require business licenses?
- Do I need a local business license?
- What do I need for a business license?
- How much is a business license?
Getting a Business License
What is a business license?
A business license is a certificate that conveys certain rights to a business. Some business licenses give your company the right to engage in business in a specific area. For example, all businesses operating in Atlanta, Georgia are required to get a local business license in order to conduct business in the city.
Other business licenses give your business the right to offer a specific product or service. Certain products (like alcohol and tobacco) and professions (like doctors and lawyers) are highly regulated and naturally require licenses. However, many businesses are surprised to find that they may need special licenses even for everyday businesses. For instance, running a bowling alley in Hartford, Connecticut requires a specific business license. So does operating a bicycle tour business in Maui County, Hawaii.
Is a business registration the same as a business license?
No. This confusion occurs because many people casually refer to registering a business as “getting a business license.” However, business registration is different. Business registration involves filing formation documents (commonly called “Articles of Incorporation” or Articles of Organization)” with the state to legally incorporate your business.
While we no longer provide business license services, Northwest specialize in business registrations. You can hire us to file your articles and form a new LLC or corporation. We also offer registered agent service, annual report filing service and more.
What is a professional license?
A professional license is documentation that shows you are qualified to perform a highly-skilled service. Some common jobs that require professional licenses include accountants, architects, dentists, doctors, electricians, engineers, lawyers, pharmacists, plumbers, real estate appraisers and veterinarians.
Professional licenses are usually issued by the state board for that profession, such as a state bar association or state medical board.
Where do I get a business license?
Unfortunately, there’s no “one stop shop” where you can get all your business licenses. There are several federal agencies that issue business licenses, along with numerous state and local agencies that oversee a variety of other business licenses. Because all of these agencies function separately, you have to get each license from each specific agency. Below, we’ve listed information on federal agencies, state agencies and local business licenses.
What federal agencies issue business licenses?
The federal government has roughly a dozen agencies that issue business licenses, such as the Alcohol and Tobacco Tax and Trade Bureau (TBB) and the National Oceanic and Atmospheric Administration Fisheries Service (NOAA).
The major issuing agencies are listed below, along with the products or services that require federal licenses or permits:
- TBB: alcohol or tobacco (retail sale, wholesale, import or manufacturing)
- Bureau of Alcohol Tobacco, Firearms and Explosives: firearms, explosives, or ammunition
- NOAA: commercial fishery
- US Fish and Wildlife Service: wildlife products or activities
- Dept of Agriculture: plants, animals, biotechnology and other biological material
- Federal Aviation Administration: aircraft operation, transport or maintenance
- Bureau of Safety and Environmental Enforcement: drilling or mining
- Dept of Transportation: large-vehicle transportation
- Federal Maritime Commission: sea transport
- FCC: broadcasting
- Nuclear Regulatory Commission: nuclear energy
What states require a business license?
All states have some form of state-level licensing (mostly professional licensing). However, only a few states (and DC) require mandatory, state-issued business licenses for all businesses:
- Alaska: Division of Corporations, Business and Professional Licensing
- Delaware: Delaware Department of Revenue (for businesses operating in the state)
- DC: Department of Consumer and Regulatory Affairs
- Hawaii: Hawaii Department of Taxation
- Nevada: Nevada Secretary of State
- Washington: State of Washington Business Licensing Service
- West Virginia: West Virginia State Tax Department
Alabama, California, Florida, and Utah each require all businesses registering or operating in the state to get a business license as well, but the licenses are issued on the city or county level.
Professional licenses are also issued at the state level, usually by the state board for your particular profession. For instance, if you’re a CPA in Minnesota, your license would be issued by the Minnesota State Board of Accountancy.
States agencies can license other products and activities as well. Common state-level licenses include state liquor licenses and film production permits. The state’s Department of Licensing usually maintains a list of required state-level licenses. Our Business Name Search page includes links to each state’s Department of Licensing.
Do I need a city or county business license?
Many, many businesses will need a local business license. However, every city and county does things their own way, making navigating local licenses somewhat tedious and difficult. Below are a few tips to get started:
- Visit your city and county’s websites: Look for a section on licenses, permits, or business in general. Be sure to check both your city AND county—while it’s not common, businesses are occasionally required to have both city and county licenses.
- Call or visit the city or county clerk’s office: If your area doesn’t have a comprehensive website, the next step is to talk someone who can point you in the right direction.
- Check in with the local tax office: In many areas, business licenses are closely tied together with local taxes (some areas even refer to the license as a “business license tax”).
What do I need to get a business license?
Because licenses are managed by many different agencies, there’s no single list of information or documents you’ll need to provide. However, we’ve included many of the most common application requirements for general business licenses below:
- business name and contact information
- business location (and whether or not your business is conducted out of your home)
- type of entity (sole proprietor, partnership, LLC, corporation, etc.)
- date and place of incorporation
- date your company began operating in the area
- ID number (such as an EIN, state business ID, state tax ID or personal social security number)
- names and contact info for directors, officers, members or managers
- number of employees
Note that federal and professional licenses will require significantly more information. For instance, if you’re seeking a license from the TBB to import tobacco, you’ll need a copy of your lease agreement or proof of property ownership, a letter of intent from your foreign supplier, and documentation of each source of funding.
How much is a business license?
One of the most common questions new business owners have is how much a business license will cost. The range is enormous, anywhere from $0 to thousands of dollars. To complicate matters further, licenses aren’t always a flat fee. In many cases, the license fee is variable, depending on factors such as:
- number of employees
- size of property
- how many units or properties you have (for apartments or other rentals)
- how many seats you have (for a restaurant)
- gross receipts or income
For example, if you have an LLC or corporation in Branson, Missouri, your business license fee depends on how many employees you estimate you’ll have in the next year. Fewer than 2 employees will set you back $50 a year, while over 50 employees will cost $300 a year.
Have a skating rink in Tacoma, WA? Your initial local business license is $150 if your space is under 2000 square feet (but doubles to $300 for locations over 6000 square feet).
Restaurant in DC? Every other year, pay just under $600 if you have fewer than 10 seats and close to $1000 for over 100 seats.
These are just a few examples of how much business license costs vary. As a general rule of thumb, more expensive areas—think Las Vegas and DC—tend to have more expensive business license costs.