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How to Get a Business License: State-by-State Guide

February 14, 2026

13 min read

Getting Licensed: The First Step in Starting a Business

One of the most common questions new business owners ask is: "Do I need a business license?" The answer is almost always yes—but the type, cost, and process vary enormously depending on where you are and what you do. There is no single "business license" that covers the entire United States. Instead, you may need licenses and permits from federal, state, county, and city agencies.

This guide walks you through the business licensing process step by step, with practical information for every state. For a personalized list of exactly which licenses your business needs, take our free compliance assessment.

Understanding the Licensing Layers

Federal Licenses

Most businesses do not need a federal license. Federal licensing applies only to specific regulated activities:

Alcohol production or sales (TTB)
Aviation (FAA)
Firearms and ammunition (ATF)
Broadcasting (FCC)
Commercial fishing (NOAA)
Drug manufacturing (DEA)
Interstate trucking (FMCSA)
Import/export of certain goods (various agencies)

If your business involves any of these activities, contact the relevant federal agency before starting operations.

State Licenses

State licensing falls into several categories:

General business licenses or registrations: Some states require all businesses to obtain a general license or register with a state agency. Others only license specific professions and industries.

Professional and occupational licenses: Most states license dozens of professions, from healthcare providers to cosmetologists to contractors. These typically require education, exams, and ongoing continuing education.

Sales tax permits: If you sell taxable goods or services, you need a seller's permit (also called a sales tax permit or resale certificate) in each state where you have nexus.

Employer registrations: If you have employees, you must register with your state's tax authority and unemployment insurance agency.

Local Licenses (City and County)

Most cities and many counties require their own business licenses. These may be called:

Business license
Business tax certificate
Occupational license or tax
Business privilege license

Even if your state does not require a general business license, your city almost certainly does. Fees typically range from $25 to $500 annually, though some jurisdictions charge based on revenue.

State-by-State Overview

States Requiring General Business Registration

Alabama: Business privilege license required. Annual filing based on net worth.

Alaska: Business license required for most businesses. $50 annual fee. Apply through the Division of Corporations.

Delaware: Business license required. Fees vary by business type. Apply through the Division of Revenue.

Hawaii: General excise tax license required for all businesses. $20 fee. Apply through the Department of Taxation.

Louisiana: Occupational license required in most parishes. Fees vary.

Nevada: State business license required. $200 annually. Apply through the Secretary of State.

Tennessee: Business tax registration required for most businesses.

Washington: Business license required. Apply through the Department of Revenue. No fee for the state license (local fees may apply).

West Virginia: Business registration certificate required. $30 fee.

States With No General Business License

California, Texas, Florida, New York, Illinois, Ohio, Pennsylvania, Georgia, Michigan, New Jersey, Virginia, North Carolina, and most other states do not require a single statewide general business license. However, you will still need:

Entity registration with the Secretary of State (for LLCs, corporations, etc.)
Professional licenses for regulated professions
Sales tax permits if selling taxable goods/services
Local business licenses from your city/county

Step-by-Step: How to Get Your Business Licenses

Step 1: Register Your Business Entity

If you are forming an LLC, corporation, or partnership, register with your state's Secretary of State. Sole proprietors may need to file a DBA (Doing Business As) or fictitious name statement.

LLC formation fees: $40 (Kentucky) to $500 (Massachusetts)
Corporation formation fees: $25 (Virginia) to $500+ (Texas, Massachusetts)
DBA filing fees: $10-$100, typically filed with the county clerk

Step 2: Get Your EIN

Apply for an Employer Identification Number from the IRS. This is free and can be done online at irs.gov. You need an EIN if you:

Have employees
Operate as a corporation, partnership, or multi-member LLC
File certain tax returns (excise, employment, etc.)

Even sole proprietors often get an EIN to avoid using their Social Security number on business documents.

Step 3: Register for State Taxes

Sales Tax

Register for a sales tax permit with your state's department of revenue or taxation if you sell taxable goods or services. Remember:

Five states have no sales tax: Alaska, Delaware, Montana, New Hampshire, Oregon
Economic nexus rules may require registration in states where you have no physical presence
Registration is typically free

Employer Taxes

If you have employees, register with your state for:

Income tax withholding
Unemployment insurance
Any state-specific payroll taxes (disability insurance, paid family leave, etc.)

Step 4: Obtain State Professional Licenses

Check whether your profession requires a state license. The licensing board's website will detail:

Education and experience requirements
Exam requirements
Application fees
Continuing education obligations

Common licensed professions: contractors, real estate agents, healthcare providers, cosmetologists, accountants, insurance agents, electricians, plumbers, and many more. For contractor-specific guidance, see our contractor licensing guide.

Step 5: Get Your Local Business License

Contact your city clerk or county administration office. Many now offer online applications. You will typically need:

Your business name and address
EIN or Social Security number
Description of business activities
State license numbers (if applicable)
Zoning verification for your business location

Step 6: Obtain Industry-Specific Permits

Depending on your business type, you may also need:

Health permits: For food service, childcare, pools, etc.
Building permits: For construction, renovations, or signage
Environmental permits: For businesses with emissions, waste, or chemical handling
Fire department permits: For businesses open to the public
Alcohol licenses: For bars, restaurants, and retailers selling alcohol
Home occupation permits: For home-based businesses

Costs and Timelines

Typical License Costs by Category

State entity formation: $40-$500
General business license (city/county): $25-$500 annually
Professional license: $50-$1,000+ depending on profession and state
Sales tax permit: Usually free
Health permits: $100-$1,000 depending on business type
Liquor license: $300-$14,000+ depending on state and license type
Contractor license: $100-$500 plus bonding and insurance costs

Processing Times

Online entity formation: 1-5 business days (standard); same-day with expedited processing
Business licenses: 1-4 weeks
Professional licenses: 2-8 weeks (longer if exams are required)
Liquor licenses: 1-6 months (some states have lengthy processes)
Health permits: 2-6 weeks (includes inspection scheduling)

Renewing Your Licenses

Most licenses require periodic renewal. Set calendar reminders for every license your business holds:

Annual renewals are most common for business licenses and some professional licenses
Biennial renewals are common for professional licenses in many states
Late renewal fees can be substantial, and some licenses are automatically revoked if not renewed on time
Continuing education must be completed before renewal for most professional licenses

Common Mistakes to Avoid

Assuming you only need one license: Most businesses need multiple licenses from different agencies
Starting business before licenses are approved: This can result in fines and complicate your license application
Forgetting local requirements: State compliance does not cover city and county obligations
Not checking zoning: Your business activities must be permitted in your location
Missing renewal deadlines: Track every license expiration date
Operating in new locations without checking requirements: Moving to a new city or expanding to a new state may trigger additional licensing

Simplify the Licensing Process With SMBRegs

Researching licensing requirements across federal, state, and local agencies is one of the most time-consuming parts of starting a business. [Take the free SMBRegs compliance assessment](/wizard) to get a personalized list of every license, permit, and registration your business needs. Just answer a few questions about your business type, state, industry, and activities.

Our compliance checker tool can also help you verify that you have all required licenses in place. For definitions of licensing terms and compliance concepts, explore our glossary. And if you are wondering whether to handle licensing yourself or get professional help, check out our SMBRegs vs. hiring a lawyer comparison.

Don't let licensing confusion delay your launch. [Get your personalized licensing roadmap today](/wizard).