State Guide: Obtaining Licenses & Permits

There are several tasks business owners must complete to start their business. You will need to select a business structure and business name, and develop a business plan.

Obtaining all the permits and licenses required for your business is also essential. Business licenses and permits are issued at the local, state, and federal levels. Some businesses need multiple licenses, while others may only need one or two. Generally, a particular business's licensing and permit requirements vary according to industry and location.

Your type of business may also require federal licenses and permits. Business activities and local government licensing determine what you need. The U.S. Small Business Administration (SBA) offers many free resources, from local licensing to doing business as tips.

Types of Business Licenses and Permits

The permits and licenses your business needs depend on the industry in which it operates. Knowing some of the common types of permits and licensing requirements is helpful.

Standard licenses and permits include:

• Certificates of occupancy
• General business licenses
• Health permits
• Occupational license
• Professional license (accountants, legal, medical, and real estate)
• Property use permits
• Sales tax

Most businesses also need to obtain an employer identification number from the state's Department of Revenue.

Business Licenses

A state business license is the main document required for tax purposes and conducting other basic business functions. Many states have established small business assistance agencies to help small businesses comply with state requirements.

Why do you need a business license? If your goal is to generate revenue by selling goods or services to the public, it is important to follow your state and government agencies' rules.

Certificates of Occupancy

Your local fire marshall issues these certificates. They show the public that your building is up to code.

Employer Registrations

If you have any employees, you'll probably be required to make unemployment insurance contributions. Unemployment insurance is meant for workers who become unemployed through no fault of their own. There are some exceptions to this rule. For more information, contact your state Department of Revenue or Department of Labor.

Health Permits

Health permits allow a restaurant to prepare and serve food products. Departments of Public Health issue these permits to sole proprietorships, limited liability companies, and corporations.

Occupations and Professions

Certain professions also need state licenses, like:

• Auctioneers
• Appraisers
• Barbers
• Building contractors
• Cosmetologists
• Daycare
• Funeral directors
• Physicians
• Private investigators
• Private security guards

Since you can't always guess which occupations and professions are licensed by your state, you should always check with your state licensing and municipality authorities for specific licenses. For instance, if you are an attorney, you'll need to obtain a license from your state bar.

Licenses Based on Type of Product Sold

Some state licensing requirements are based on the type of product the business sells. For example, most states require special licenses before a business may sell:

• Alcoholic beverages
• Gasoline
• Firearms
• Liquor
• Lottery tickets

Contact your state licensing authorities to determine the licensing requirements of your business.

Seller's Permit and Sales Tax Permit

A seller's permit allows a retail business to sell items in a store, online or in person. Hawaii, New Mexico, and South Dakota impose a sales tax on all services. A sales tax permit allows the business to collect sales tax.

Tax Registration

If the state in which you operate has a state income tax, you'll have to register and obtain an employer identification number (EIN). You receive this from your state Department of Revenue or Treasury Department. If you're engaging in retail sales, you also need a sales tax license.

Note that nonprofits still need a federal EIN even if it is tax-exempt.

Trade Name Registration

Having a strong business name is vital to your organization. Follow all state laws in order to protect your trade name. If your business will only be in your local community, registering your company name with the state may be enough. If you open business locations in another state, then register in that state too.

Weight and Measurement Registration Requirement

If you weigh items for sale, such as landscaping goods, coal, or firewood, your state may require that you have this type of permit.

Zoning Permits

Your local municipality issues zoning permits. There are certain land use restrictions that your business must follow. Your local-level city council can issue a zoning variance if your proposed business needs one.

Specific Agency Licenses

The following chart provides links to information on obtaining licenses and permits for your new business in each of the 50 states and Washington, D.C. The process is straightforward and manageable. For more information related to this topic, you can visit FindLaw's Business Licenses and Permits section.

Find your state below to view your state licensing and permit information:

• Alabama
• Alaska
• Arizona
• Arkansas
• California
• Colorado
• Connecticut
• Delaware
• District of Columbia
• Florida
• Georgia
• Hawaii
• Idaho
• Illinois
• Indiana
• Iowa
• Kansas
• Kentucky
• Louisiana
• Maine
• Maryland
• Massachusetts
• Michigan
• Minnesota
• Mississippi
• Missouri
• Montana
• Nebraska
• Nevada
• New Hampshire
• New Jersey
• New Mexico
• New York
• North Carolina
• North Dakota
• Ohio
• Oklahoma
• Oregon
• Pennsylvania
• Rhode Island
• South Carolina
• South Dakota
• Tennessee
• Texas
• Utah
• Vermont
• Virginia
• Washington
• West Virginia
• Wisconsin
• Wyoming

Getting Business License Legal Help

When starting a business, entrepreneurs need to be compliant with the necessary licenses and permits. This ensures your legal protection and prevents fines and lawsuits. Contact a local business organization attorney for assistance.