How To Get A Business License In Illinois: Everything You Need To Know

The state of Illinois does not issue a state-level business license or business operating license, but local municipalities will likely require at least one type of business license or permit before you begin operating in the state of Illinois. Though Illinois does not require a statewide business license, your business is required to obtain a Certificate of Registration or License, sometimes referred to as a seller’s permit, if it intends to sell or lease taxable goods or services within the state.

When Do You Need a Business License in Illinois?

Nearly every city or municipality in the state of Illinois will require a general business license to operate within its jurisdiction. Each local government may have different rules, restrictions or requirements. For example, Chicago requires extensive business licensing, sometimes requiring multiple licenses depending on the industry or profession your business operates in, while the city of Champaign only requires business licenses for a select few types of business.

Since each city or county has varying license regulations and some professions are further regulated on both the local and state level, we highly encourage business owners to do further research to determine which business licenses they may be required to apply for. The Illinois Secretary of State offers a searchable index of all Illinois local governments on its website so you can find your county, township, city or municipality and find out exactly what business licenses you may be required to obtain. For state licenses, visit the MyTax Illinois website for the Certificate of Registration or License and the main Illinois state government website for state-level business licenses and permits.

The state of Illinois requires nearly all businesses to obtain some kind of license or permit to operate legally. But with a variety of business licenses available from a number of different local, state and even federal governments, determining exactly which business license you need can be confusing.

Local Business Licenses in Illinois

A traditional “business license,” sometimes also called a business operating license or general license is obtained from your city’s or county’s local government and allows you to operate your business within your municipality. Larger cities in Illinois will require all businesses to have a business license and certain professions may require additional licensing. Some smaller Illinois towns may not require a general business license but may still require specific licensing for specific kinds of business. Use the Illinois Secretary of State’s website to determine which local government represents your business area and then which licenses or permits it may require.

Additional Local Permits

Your local municipality may also require additional permits or licenses especially when you are first starting a business in its jurisdiction. It may be necessary to obtain an occupancy permit or even a home occupation permit if your business is based in your home. If you’re doing renovations or new construction, you may need a variety of building permits—including signage permits for advertising—from the local planning department.

Most importantly, if your business deals with people’s health, be it through a healthcare service, food or even accommodations, you will likely be subject to a specific health department permit or licensing. This will likely exist on the local and/or state level.

Illinois Statewide Licenses

Any business intending to sell or lease taxable goods or services in the state of Illinois is required to obtain a Certificate of Registration or License, sometimes referred to generically as a seller’s permit. Illinois also sometimes calls this certificate an Illinois Business Authorization. This state-level permit registers your business for Illinois sales tax and other taxes you may be subject to. When applying for the state-level permit, you will either receive the Certificate of Registration or the Certificate of License, depending on the type of business you conduct, and this will inform the type of taxes you are required to pay. To apply, head to the MyTax Illinois website.

Businesses engaged in certain industries or professions may be required to obtain additional licenses or permits. This list includes a significant number of agricultural types of businesses, as well as beekeeping and waste management, to name a few. To see if your business is required to hold a state-level permit in addition to the sales tax permit, head to the Illinois state government website.

Federal Licenses and Permits

While most smaller businesses will not require federal licenses or permits, you may be required to obtain a federal license if your industry or profession is regulated by the federal government. Here are a few common industries requiring federal licensing:

• Agriculture
• Alcoholic sales, serving, distribution or importing
• Aviation
• Firearms, ammunition and explosives
• Fish and wildlife
• Commercial fisheries
• Maritime transportation
• Mining and drilling
• Nuclear energy
• Radio and television broadcasting
• Transportation

Step 1. Name and form your company

The most important step before applying for an Illinois business license is to form your company and ensure your business affairs are in order. If you have not yet started a business, Forbes offers numerous guides to help you get started: starting a business, forming an LLC and Best LLC Services. Once you’ve started your business, gather this info to streamline your license application process:

• A business name
• An EIN (Employer Identification Number) or SSN (if you’re a sole proprietor)
• A business entity type (LLC, partnership, corporation, etc.)
• A business address and phone number
• A business plan that includes anticipated revenue and expenses
• A certificate of insurance (COI) for your business insurance policy

Step 2. Apply for your Illinois business license

Once you’ve established your business, the next step is to apply for your local municipality’s general business operating license. Keep in mind this may or may not be required by your local government. In larger cities, you will need a general business license, as well as specialty licenses for certain industries. Smaller municipalities may require only specialty licensing or no licensing at all. For a list of all Illinois municipalities and relevant websites, visit the Illinois Secretary of State website.

Step 3. Determine which other local licenses may be applicable

The third step is to check if your business will be required to obtain any other local, specialized licenses or permits. These may include specialized licenses for the sales of alcoholic beverages (which is regulated on both and local levels) or for various agricultural businesses, or it may involve permits from the health department for the sale of food or the offering of accommodations.

Step 4. Apply for any additional statewide license(s) you need

Apply for the Certificate of License or the Certificate of Registration from the Illinois state government website. This seller’s permit is required if you are selling or leasing taxable goods or services in the state of Illinois. Additionally, your business may be required to obtain additional licensing or permits depending on your industry or profession.

Step 5. Apply for federal licenses and tax treatment (as necessary)

Keep in mind that although the federal government does not issue a general business license, if your business works in a number of federally regulated industries, you may be required to obtain a license from the federal government to begin doing business. The federal government requires permits for a number of industries, such as agriculture, fishing, firearms, alcohol sales and transportation.

If your municipality requires a standard business operating license or any kind of specialized license, the cost may range from $100 on the low end to several hundred or even a thousand dollars on the high end. For example, in the city of Chicago, a dry cleaner’s business license costs $250 for two years (most business licenses in Chicago are renewed biennially) while a business license for a shooting range is $2,000 for two years. Costs and fees will vary from municipality to municipality.

Each agency, municipality and the state government all handle business licensing on a variety of renewal schedules, but the majority require licenses to be renewed either annually or biennially. If you’re unsure, contact the agency from which your business license was issued.