What Is A Business License And Do You Need One?

You might be surprised to learn most states don’t require businesses to hold a general business license to operate in the state. But your business may be required to apply for a license to do business in your industry, in your city or in your county.

Keep reading to learn what a business license is, when and where a license is required, and how to get a license if you need one.

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What Is a Business License?

A business license is any kind of license or permit that a state or other government entity requires businesses to have in order to do business. Federal, state and local agencies issue various types of business licenses and permits for a variety of business activities.

What Kinds of Businesses Need a License?

It varies by state but generally, businesses tend to need licenses or permits for a few common reasons:

• If you operate a brick-and-mortar business, you may need permits to allow commercial activity on the property and to build or remodel the building. Your municipality might also require permits for things like signage and fire safety.
• If you sell goods, most states require you to get a seller’s permit. This permit lets you collect sales tax from customers.
• If you provide services that require licenses, i.e. a stylist, electrician, childcare provider, lawyer, medical care provider, accountant; or you sell food, alcohol or tobacco; or provide other services that are regulated by state or federal laws, you’ll need industry-specific licenses.

Who Needs a Business License?

The types of business licenses you need to legally operate depend on where your business is located and what kind of business you run.

Below is a list of state requirements.

Note that even if your state doesn’t require a statewide license, you may need local licenses or permits from your county or municipality. Check with your city or county clerk’s office to cover your bases.

State	Business License Requirements
Alabama	Every type of business requires a business privilege license. Businesses involving motor fuels, severance of natural resources, environmental waste and tobacco require special licensing and taxes.
Alaska	All businesses require a business license, which you can get through the Alaska Department of Commerce.
Arizona	Arizona doesn’t issue or require a general business operating license. Contact your local city or town office to determine which local permits you need.
Arkansas	Arkansas doesn’t issue a statewide business operating license. But you may be required to get a local business license through your city or county clerk’s office.
California	California doesn’t issue a statewide business operating license. It requires a local business license, which you can get through your city clerk’s office.
Colorado	Colorado doesn’t issue or require a business operating license. Your city or county may require local licenses and permits, which you can get through the city or county clerk’s office.
Connecticut	Connecticut doesn’t issue or require a business operating license. Your city or county may require local licenses and permits.
Delaware	All businesses require a business license, which you can get through the Delaware Division of Revenue.
Florida	Businesses offering these services require special licenses from the state. Most counties (and some cities) in Florida also require a business license, also known as a business tax receipt. Check with your city and county’s tax collection office to determine your requirements.
Georgia	Georgia doesn’t issue a statewide business operating license. Most cities and counties require a local business license.
Hawaii	Some businesses require permits from Hawaii’s Department of Agriculture or Department of Commerce & Consumer Affairs. The state’s Business Action Center lists resources and requirements.
Idaho	Idaho’s State & Federal Resources for Business offers a business wizard to help you determine which licenses and permits your business needs.
Illinois	Illinois doesn’t issue or require a business operating license. Some cities or counties in the state require a local license.
Indiana	Indiana doesn’t issue or require a business operating license. Your city or county may require local licenses and permits.
Iowa	Iowa doesn’t issue or require a business operating license. Your city or county may require local licenses, which you can get through the city or county clerk’s office.
Kansas	Kansas doesn’t issue or require a business operating license. Your city or county may require local licenses, which you can get through the city or county clerk’s office.
Kentucky	Kentucky doesn’t issue or require a business operating license. Contact the local government in the place your business is based and any cities or counties where you plan to do business to determine if any city or county licenses are required for your business.
Louisiana	Louisiana offers a one-stop site for starting a new business called geauxBIZ, where you can create a checklist of necessary state licenses and permits among other resources. Check with your city and county to determine whether you also need local business licenses.
Maine	Maine doesn’t issue or require a business operating license. Some local governments in Maine require a local business license.
Maryland	Maryland doesn’t require a business operating license at the state level. It offers a business licensing portal to determine whether you need other statewide licenses or permits. Some localities also require business licenses. Contact your local clerk of court to learn about requirements in your area.
Massachusetts	Massachusetts doesn’t issue or require a business operating license. Individual localities may require a business license.
Michigan	Michigan doesn’t issue or require a business operating license. It requires a statewide license for these business activities.
Minnesota	Minnesota doesn’t issue or require a business operating license. It requires a statewide license for these business activities.
Mississippi	Mississippi doesn’t operate a central licensing agency for the state. Contact your city or county License Division to find out which local licenses and permits you need.
Missouri	Missouri doesn’t issue or require a business operating license. Your city or county may require local licenses.
Montana	Montana doesn’t issue or require a business operating license. Your city or county may require local licenses.
Nebraska	Nebraska doesn’t issue or require a business operating license. Most cities require local licenses, which you can get through the local city Business License office.
Nevada	All businesses are required to have a Nevada business license, which are processed online through SilverFlume, Nevada’s business portal.
New Hampshire	New Hampshire doesn’t issue or require a business operating license but requires a statewide license for specific industries.
New Jersey	New Jersey doesn’t issue or require a business operating license. It requires a statewide license for these business activities. Most NJ counties and some cities also require you to register your business with the clerk’s office.
New Mexico	New Mexico doesn’t issue or require a business operating license. You can apply for licenses for specific industries or business activities through the New Mexico Regulation and Licensing Department. Many cities and counties require local business licenses.
New York	New York doesn’t issue or require a general business operating license. Use its Business Wizard to figure out any other licenses and permits you need. Contact your city and county to find out if you need a local business license. In NY City, you can create a customized list of licensing requirements online.
North Carolina	North Carolina doesn’t issue or require a business operating license. Many cities require a local business license.
North Dakota	North Dakota doesn’t issue or require a business operating license but requires a statewide license for specific industries.
Ohio	Ohio doesn’t issue or require a business operating license but requires a statewide license for certain industries.
Oklahoma	Oklahoma doesn’t issue or require a business operating license but requires a statewide license for specific industries. You may also be subject to town, county or city licensing requirements.
Oregon	Oregon doesn’t issue or require a statewide business operating license. Determine which trade licenses and local business licenses you need through the Oregon Business Xpress website.
Pennsylvania	Pennsylvania doesn’t issue or require a business operating license. Your city or county may require local licenses, which you can get through the city or county clerk’s office.
Rhode Island	Rhode Island doesn’t issue or require a business operating license. Your city or county may require local licenses.
South Carolina	Most cities in South Carolina require a local business license. To figure out what you need, visit South Carolina’s Business One Stop.
South Dakota	South Dakota doesn’t issue or require a business operating license but requires a statewide license for specific industries.
Tennessee	Any business with more than $3,000 in revenue requires a business license, which you can get through the local municipal or county clerk’s office.
Texas	Texas doesn’t issue or require a business operating license. Your city may require local licenses, which you can get through the Business License office at City Hall.
Utah	Utah businesses must obtain licenses from the counties or cities where they operate. Check with the Utah Department of Commerce’s Business Licensing and Registration Guide for a list of local business licensing offices.
Vermont	Vermont doesn’t issue or require a business operating license. Your city may require local licenses, which you can get through your city clerk’s office.
Virginia	Virginia doesn’t issue or require a business operating license. Most businesses are required to have a local business license in their city or county.
Washington	Many businesses are required to have a Washington business license. You can apply online through the Washington Department of Revenue business license application.
Washington, D.C.	Most brick-and-mortar businesses in D.C. need to file for a Basic Business License.
West Virginia	Use the West Virginia Business Startup Wizard from the Secretary of State’s office to determine which registrations and licenses your business requires.
Wisconsin	Wisconsin doesn’t issue or require a business operating license. Your city may require local licenses, which you can get through your city clerk’s office.
Wyoming	Wyoming doesn’t issue or require a business operating license.

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How Do You Get a Business License?

A business operating license isn’t required for every business in every state. The process to get a business license and other permits varies by state, county and municipality. Even so, you’ll follow these basic steps to get a business license if you need one:

1. Form your business entity. You apply for a business license in the name of your business, so if you’re going to form a business entity like a corporation or LLC, do that first.. Otherwise, you might have to file a change later and pay an additional fee.
2. Apply for an employer identification number (EIN). You might need this on applications for business licenses or permits. forms. All businesses other than sole proprietors with no employees need an EIN. You can get an EIN through the IRS online.
3. Determine which license(s) you need. Depending on your industry and where your business is located, you may need licenses from federal, state or local agencies. A lawyer or resources from your local Small Business Administration office can help you figure it out.
4. Apply for a business license. You may be able to apply for licenses online, or you may need to submit paper applications for local licenses. Some licenses, like general business licenses and seller’s permits, can be approved right away. In some states, or for some licenses, the review process might be longer, so plan to apply well before you need to start operating your business.
5. Renew your business license. You’ll probably have to renew licenses and permits as often as once a year. Talk with your lawyer and pay attention to the regulations in your state and locality to avoid a lapse in your licensing.

Frequently Asked Questions