How Much Does a Business License Cost?
What you need to know about state and federal business licenses.
If you’re in the process of starting a new business, you’ve likely realized that one of the biggest hurdles to overcome as a new business owner is deciphering business license requirements at both the state and federal levels. Although many states do not formally require a “business license” in order to operate a business, they do have numerous other requirements at both local and state levels.
As you become ready to step into your role as a business owner, you may be wondering, “how much does a business license cost?” Unfortunately, the short answer is that it depends on a couple of factors including state, city, and industry.
We’ve compiled a comprehensive list of state specific license resources, followed by an overview of federal business license requirements to help shepherd you through the process. Keep in mind that although this information is intended to be helpful, it should not be interpreted as legal advice or used to replace legal counsel. Also, before starting your business journey, you should make sure to contact your local government office for insights into your specific business type as some requirements are often industry specific.
Business License Requirements by State
Each state has its own set of business license requirements. Here is an overview of each state’s business license requirement, plus state-specific resources to help you get started.
Alabama
In Alabama, certain types of businesses are not required to have a license, depending on the county and/or city they are located. The Alabama Department of Revenue’s Quick Reference Guide is a good place to start when identifying the specific types of licenses you’ll need for your business. In addition, check out Alabama State Government’s Atlas Alabama, a resource for Alabama residents to find guidance in planning, launching, managing, and growing their businesses.
Alaska
Alaska’s Department of Commerce, Community, and Economic Development states that you must obtain a business license to practice business in the state of Alaska, which can range in cost from $25-$50. Some businesses and practices, such as the sale of tobacco, require additional licensing. Alaska’s Department of Commerce, Community, and Economic Development offers the application and informational resources on its Business Licensing webpage.
Arizona
Arizona does not require all businesses to have a license at the state level, though most businesses will need a transaction privilege tax (TPT) license to operate, which comes with a $12 fee. Depending on your type of business, you may need to acquire multiple licenses at the federal, state, and county levels. In addition, you will likely have to acquire another TPT license at the city/county level and a standard business license at the city/county level. The Arizona Commerce Authority website provides resources to help business owners determine licensing requirements for specific cities and a checklist for new business owners.
Arkansas
According to the Arkansas Secretary of State document Doing Business in Arkansas, only sole proprietorship companies are required to obtain business licenses. Sole proprietorships must obtain state and local licenses and permits, including an Arkansas sales tax permit which costs $50. You can register your business on the Arkansas Secretary of State’s website and find more resources on business licensure on Arkansas’s Insurance Department’s website.
California
California does not require you to obtain a business license at the state level, though most businesses will need a business license or permit at the local level. The California Department of Tax and Fee Administration allows you to apply for permits and business licenses through their website. However, before applying, you must have a California Secretary of State entity number. The State of California requires you to have a seller’s permit to engage in business. In addition, most cities and counties in California will require you to also have a permit.
Colorado
According to Colorado’s Secretary of State’s website, Colorado does not require a general business license at the state level. However, some businesses may need to obtain special licenses from the Colorado Department of Regulatory Agencies, while different cities and counties may also require business licenses. Most businesses will need to obtain a 2-year Colorado sales tax license, which costs $16.
Connecticut
The State of Connecticut’s website does not indicate that you need a general business license at the state level to operate a business. However, you must obtain a relevant license or permit at the state level for some specific businesses, which can cost anywhere between $5-$5,000. Some cities and counties, such as New Haven, also require you to obtain a license for specific businesses.
Delaware
The State of Delaware requires you to have a business license at the state level if you wish to operate a business in the state. The price of this license will vary, but it is typically $75. In addition, certain cities and counties may require additional business licenses, so it’s important to check with your local city or county office. Delaware’s One Stop resource allows you to register your business and apply for licenses online.
Florida
The State of Florida does not require you to have a general business license; however, you will need to obtain a license for some specific businesses at the state level. Florida does require businesses to register with the state, but there is no fee. Some cities and counties may also require licenses or permits for specific types of businesses. The State of Florida’s Division of Corporation’s website features resources for businesses and business owners.
Georgia
Georgia does not require you to have a general business license. However, you will need to register for a Georgia sales and use tax number for which there is no cost. You can visit Georgia’s Department of Revenue’s website for more information on what types of businesses may require specialized licenses. Some cities and counties, such as The City of Atlanta, require you to have a general business license at the city level, along with additional licenses for specific types of business.
Hawaii
According to Hawaii’s Department of Taxation’s Tax Facts 31-1 document, most businesses — such as corporations and LLCs — will need to obtain a General Excise Tax (GET) license, which costs $20. The document also specifies that the government of Hawaii recommends that you receive guidance from a trusted advisor, like an attorney, accountant, or tax consultant, to verify that you’ve obtained all the licenses necessary before you begin business operations.
Idaho
According to Idaho’s official government website, most businesses will need to obtain a sales and use tax permit at no cost, however there is not an official need to obtain a business license at the state level. Some cities and counties require businesses to have other additional licenses and permits. Idaho’s official government website encourages you to check with your local city or county clerk’s office for more information.
Illinois
Illinois State Government’s website does not indicate that a general business license is needed to practice business. However, it does list several types of business licenses, such as waste management permits, that are required for some business types. Cities such as Chicago require businesses to acquire specific licenses which can range in cost from $50-$5,280.
Indiana
Indiana does not require a business license at the state level. However, you may need to obtain a specific permit or license depending on your business type. For example, retail businesses must register for an Indiana Registered Retail Merchant Certificate (RRMC) which costs $25. The Government of Indiana’s website does encourage you to call their state information center to check to see if your type of business requires industry specific licensure. Certain cities and counties, such as Indianapolis, require specific businesses to have additional licenses and permits.
Iowa
Iowa does not require businesses to obtain a business license at the state level. Most businesses will have to register for an Iowa sales tax permit from the Iowa Department of Revenue at no cost. Iowa’s Secretary of State’s website also offers resources for businesses and business owners. Cities and counties such as Des Moines require some businesses to obtain additional licenses and permits.
Kansas
The Kansas Business One Stop website doesn’t indicate that you need a general business license to operate a business in the state. However, it does state that some business types will need to obtain specific licenses and permits to operate and provides a list of examples. You can find other business and tax-related information on the Kansas Department of Revenue’s website.
Kentucky
The Kentucky One Stop Business Portal website states that there is no one general business license required to operate a business in Kentucky, though some specific businesses will have to obtain permits or licenses at the state level. In addition, some cities and counties will also require you to have business permits or licenses at the city/county level.
Louisiana
Louisiana’s Secretary of State offers a business resource called GeauxBiz, which allows you to sign up and create a business checklist. There is no indication that Louisiana requires a general business license at the state level, though you will need to obtain business licenses at the city/county level in some areas. Cities such as New Orleans have their own business license requirements, and you should check with your city or county’s local office to determine their specific business requirements.
Maine
Maine’s government website states that business licenses and permits are dealt with at the city and local levels rather than the state level. You can utilize Maine’s government website to help you find your local county or municipality for more information on business license requirements in your specific area.
Maryland
The Maryland Business Express government website indicates that only some businesses will need to acquire a license at the state level. The Maryland One Stop Portal is a resource that allows you to find more information on the licenses and permits required by various state agencies in Maryland.
Massachusetts
Massachusetts does not require a business license, but businesses do have to register for a Massachusetts Sales and Use Tax Certificate at no cost. The Massachusetts Division of Occupational Licensure website provides information on the various business licenses that some businesses will need to acquire. Some cities and counties, such as Boston, require you to obtain additional certificates, permits, or licenses.
Michigan
Michigan does not require a general business licensure at the state level, though some businesses will require a license at the local level, whether it be city or county-based. You are encouraged to register for a free Michigan state tax license. You can find a list of these on the Michigan State License Search website. Some cities and counties, such as Ann Arbor, will require you to obtain permits or licenses at the local level.
Minnesota
There is no general business license required in Minnesota, though some types of businesses will need to acquire a specialized permit or license at the state level. You can find more information on specialized business licenses on Minnesota’s Employment and Economic Development website and Minnesota’s Elicensing page. Some cities and counties require you to acquire additional permits and licenses, so be sure to check with your local government office.
Mississippi
Mississippi’s Secretary of State website makes no mention of business licenses, though it offers other business resources. Some businesses may have to apply for licensure through relevant state agencies, such as The Mississippi State Board of Cosmetology. You may have to obtain a business license at the city or council level as some cities, such as Jackson, require additional licenses or permits.
Missouri
The Missouri Secretary of State website does not indicate that a general business license is required at the state level; however, retail businesses making sales in the state must post a bond equal to two times the average monthly sales tax. Though you’re not required to obtain a business license at the state level, some cities and counties, such as Kansas City, do require you to obtain a business license at the city/county level.
Montana
Montana does not require a general business license at the state level. However, there are many types of businesses that are required to obtain a specialized license or permit to operate in Montana, which you can find on the Montana Department of Revenue’s website. The Montana Department of Commerce website states that all licensing in Montana is provided by city and county offices. To get more information, contact your local city or county office.
Nebraska
Nebraska’s government website does not indicate that a general business license is required at the state level, though it does list some of the licenses that certain businesses, such as those who serve food, will have to acquire at the state level. Some cities and counties, such as Omaha, require you to obtain certain permits or licenses at the city/county level.
Nevada
Nevada requires you to obtain a general business license at the state level to operate a business. The general business license can be acquired for a fee of $200. You can apply online for a Nevada state-level business license through the Nevada Secretary of State’s website or Nevada’s SilverFlume business portal. In addition, you may be required to obtain a business license or permit at the city/county level in cities such as Reno.
New Hampshire
New Hampshire’s government website does not state that you are required to obtain a general state business license, though it does include a list of business licenses that specific businesses need to acquire at the state level, such as licenses to sell alcoholic beverages. Some cities and counties, such as Conway, require you to have business permits or licenses at the local level.
New Jersey
The New Jersey Division of Taxation notes that all businesses must be registered at the state level. However, many business types will have to register with various state agencies to obtain a specialized business permit or license at the state level, which you can find on Business New Jersey’s Licensing and Certification Guide. Some cities and counties, such as Newark, require you to obtain additional business permits or licenses at the local level before you can open your doors to the public.
New Mexico
The State of New Mexico only requires certain types of businesses to obtain a business license at the state level. It’s free to register for a New Mexico Business Tax Identification Number, which the state does require. Similarly, a business may need to acquire additional permits in specific counties and municipalities.
New York
The State of New York’s Business Express website does not indicate that a general business license is needed at the state level. The website’s Business Wizard resource can help you create a checklist unique to the type of new business you seek to build. Each city and county is different, and some, such as Buffalo, require you to obtain additional business permits and licenses to operate a business within city limits.
North Carolina
According to North Carolina’s Secretary of State’s website, there is no general business license that all businesses must obtain to operate in the state. However, North Carolina in particular has a large number of specialized state-level licenses – over 700 – that you may need to acquire depending on your business. You can find the NC Business and Occupational License Database on the NC Department of Commerce website. In addition, some cities and counties, such as Charlotte, require you to obtain additional business permits and licenses.
North Dakota
According to the State of North Dakota’s website, only some types of businesses need to acquire a business license at the state level. These licenses are issued by the Attorney General’s office, the Secretary of State’s office, or another North Dakota board or commission. Some cities and counties, such as Fargo, will require you to obtain additional licensing and permits at the local level.
Ohio
To operate almost any type of business in Ohio, you’ll need to obtain a vendor license from the Ohio Department of Taxation, which costs a fee of $25. In addition to a vendor license, you may need to acquire additional state-level licenses or permits, which you can find on the State of Ohio’s government website. Many cities and counties, such as Akron, will also require you to obtain additional business permits and licenses for some types of businesses.
Oklahoma
The Oklahoma Commerce website states that there is no general business license in the state, but notes that some businesses which do not require a license at the state level may require licenses in certain cities and municipalities. Many businesses will need to obtain a Sales Tax License, which costs $20, plus $10 for each additional location.
Oregon
Oregon’s Secretary of State’s website does not state that a general business license is required, however all businesses are required to register with the state which costs a minimum of $50. The state’s website also features a License Directory of specialized licenses required for some business types. Some counties and cities, such as Bend, may require additional business permits or licenses for some types of businesses.
Pennsylvania
The Pennsylvania Department of State website does not indicate that you need a general business license to operate a business in the state of Pennsylvania, though there may be state licensure requirements for some types of businesses. For example, it costs about $125 to obtain an LLC Certificate of Organization in the state. Some cities and counties, such as Philadelphia, may require you to acquire additional business permits or licenses at the local level.
Rhode Island
At the state level, Rhode Island does not require a general business license for all businesses, but most businesses will need to acquire a sales tax license which costs $10 per year. However, some specific businesses, such as breweries, may need to acquire a business permit or license at the state level. Rhode Island’s Department of Business Regulation has an e-Licensing online portal for you to start your license application processes. Some cities and municipalities, such as Providence, may require you to obtain additional business permits and licenses.
South Carolina
South Carolina does not offer or require a general business license at the state level. Rather, all businesses in the state are provided by incorporated towns, cities, and counties, such as Charleston. The South Carolina Business One Stop website offers a Local Business Resources page that can help you find information about your local government office.
South Dakota
If your business has a physical location, then you’ll need to obtain a South Dakota sales tax license at the state level according to the South Dakota Department of Revenue. You can apply for a sales tax license on the South Dakota Department of Revenue’s Tax License Applications page and there is no fee. Some cities and counties, such as Rapid City, will require some businesses to apply for additional business permits and licenses.
Tennessee
The Tennessee Department of Revenue’s website states that you must obtain a license for a $15 licensing fee if you wish to start and operate a new business in Tennessee. In addition, specific counties typically require one to obtain a county-level business license to operate, as is shown on the Davidson County Clerk and City of Lebanon websites.
Texas
Though the Texas Economic Development website states that the State of Texas does not require one to have a general business license to run a business, it does state that you’ll likely have to obtain a tax and sale permit — which has no fee.. Depending on your type of business, you may need to get an additional license which you can find in the 2022 Texas Business License & Permits document. You can find additional resources and information about business licenses on the Texas Department of Licensing & Regulation website.
Utah
According to the government of Utah’s website, the state government does not require you to have a business license at the state level. Though this is the case at the state level, you may need to obtain a business license at the local level. Utah’s One Stop online business registration offers you the ability to register your business online with several different state agencies.
Vermont
Vermont does not require you to have a general business license at the state level, though some agencies, such as the Agency of Agriculture, Food, and Markets, may require you to have a specialized business license at the state level. Similarly, individual cities and counties, such as Burlington, may require you to have additional business permits or licenses at the local level.
Virginia
Virginia does not require you to obtain a general business license at the state level and it is free to register for a Virginia Sales Tax Certificate. The state’s One Stop portal does provide resources for starting a business. Virginia’s Department of Professional and Occupational Regulation lists professions that are regulated at the state level that require you to obtain a license.. Depending on which city or county you intend to start a business in, you may have to acquire additional business permits or licenses at the local level, such as in Richmond.
Washington
For most businesses in Washington State, a business license will cost you $90. City business license fees can vary greatly depending on both the city and the scale of your business. Washington State’s Department of Revenue provides a list of cities and their associated business license fees. There are several requirements that your business must meet before filing for a business license which you can find on Washington State’s Department of Revenue’s website.
West Virginia
The State of West Virginia does not require one to have a business license to start a business in the state, but you must register as a business, which costs $30. The State of West Virginia offers a One Stop Business Portal resource for those who are starting a business. Another helpful resource is the New Business Startup Wizard. Some specific types of businesses will need to obtain additional licenses from either the West Virginia Association of Licensing Boards or another West Virginia State agency or board.
Wisconsin
To register as a qualified Wisconsin business, your business will need to meet several requirements that you can find on the state of Wisconsin’s Department of Revenue’s website. Wisconsin’s Department of Revenue does not indicate that you need a general business license at the state level, though some businesses, such as those who intend to sell tobacco, will need specialized business licenses or permits at the state level. All businesses are required to obtain a Wisconsin Seller’s Permit, which comes with a $20 fee.
Wyoming
The majority of business entities will be able to file for a business license in Wyoming for a fee of $100, with a sales use tax license of $60. To be eligible to apply for a business license in Wyoming, you’ll need to know the type of company you’re registering, your business’s name, and a registered agent to file your applications for you. Though there are commercial registered agents that you can pay to file applications for you, you may be eligible to act as your own filing agent depending on if you meet the Wyoming Secretary of State requirements. For specific questions about the process of starting a business in Wyoming, visit the Wyoming Secretary of State website.
Federal Business Licenses
Not all businesses will need to obtain a business license at the federal level. However, some types of businesses are required to and they will need to go through several federal agencies to obtain various licenses and permits. Here are some types of businesses that will require you to obtain a license or permit at the federal level:
Firearms, ammunition, and explosions
FAQs
No, registering your business is not the same as getting a business license. Registering your business consists of providing information about your business to a government agency. A business license, though it must also be obtained through a government agency, is a license that legally allows you to operate your business in that particular state. In many cases, you will need to both register your business and obtain a business license.
No, not everyone needs a business license. However, most people, depending on their type of business and place of business, will likely be required to obtain one or more business licenses at the federal, state, or local level.
There are many free resources available to you when starting your business. Here are some that you can take advantage of:
How do I market my business once I’ve obtained the required licensure/permits?
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