Getting a business up and running comes with real compliance work, and business licenses and permits are usually part of it. The type of business licenses you need depends on the nature and location of your business, and in some cases you may need several at once.
Business Licenses and Permits
This article covers what a business license is, the types you may need, how to get one, and what to expect along the way.
What Is a Business License?
A business license is any legal permit, warrant, or document that gives you the right to conduct business and provide goods and services in your location. You can get a business license from a federal entity, state government, county, or municipal agency, depending on the type you need. At times, you may need to get one from all four.
Most governments require business licenses to protect consumer or public safety and to make sure businesses follow the rules that apply to them. Licensing also keeps businesses accountable for how they operate.
Do You Need a Business License?
Most businesses need some kind of license or permit to operate legally. It depends on your location and the type of goods or services you sell.
For example, a restaurant needs a food service license, a food handler’s permit, a building health permit, and a liquor license if it plans to sell alcohol. It also needs a seller’s permit, and a valet parking permit if it offers valet service.
A gym, by contrast, may need a zoning and building permit, a childcare license, spa and massage licenses, a music license, and more, depending on exactly what services it offers.
In many cases you’ll need more than one business license to operate. Which ones you actually need depends on your business. It’s best to get advice from an attorney or CPA in your area on which licenses and permits apply to you.
Key Points and Facts About Business Licenses and Permits
- A business license can come from the federal government, your state, your county, or your city — some businesses need more than one.
- Requirements depend on your industry and location, not just the fact that you’re running a business.
- Most business licenses cost between $50 and $400, though regulated industries can run higher.
- Register your business entity and get your federal EIN before applying for most licenses.
- Processing time can range from a single day to several months depending on the license and jurisdiction.
Types of Business Licenses and Permits
Let’s look at the various types of business licenses that you may need to acquire to operate your business:
Seller’s Permit
If you conduct business in a state that collects sales tax, you need a seller’s permit. This license allows you to collect sales tax from your clients or customers and remit it to the Department of Revenue.
A seller’s permit is state-specific, meaning it applies only to the state where you sell goods and services. If you conduct business in multiple states, you may need a seller’s permit from each of those states. This license applies to both online and retail entities.
Some items are exempt from the seller’s permit, for example, clothing and food, depending on the state.
Business Operating License
Most states require you to obtain a business operating license, also known as a general business license, to do business in that state. You can get this license from the government entity that handles business registration in your state — often the Secretary of State or the Department of Revenue — or from your city or county government.
Not every state issues a general state-level license, though. A large share of U.S. states don’t have one at all; in those states, you register your entity and get a tax ID, and any licensing comes from your city or county instead.
Zoning Permit
If you plan to build or develop a structure for your business, you need a zoning permit. This license is issued by a zoning officer and confirms that your proposed use of land or property fits the city’s zoning laws and guidelines.
The zoning officer can approve or reject your permit based on your location and whether your proposed operation follows local zoning laws. For example, you can’t set up a steel mill in a residential area.
A few factors that may be used to assess whether you need a zoning permit:
- Noise
- Smoke and odor
- Advertising signage
- Number of employees and type of jobs
- Use of dangerous chemicals and materials
- Vehicle traffic and parking
DBA Registration
A DBA (Doing Business As) allows you to operate your entity under a name different from your registered business name. If you run a sole proprietorship or general partnership, you should register a DBA if you plan to use a trading name that isn’t the owner’s name or surname.
Health Permits
Most states require certain businesses to pass a health inspection and get a health permit. This license confirms that your business environment and practices are safe for customers and staff. Businesses that may need a health permit include:
- Restaurants
- Tattoo parlors
- Beauty salons
- Food distributors and manufacturers
- Waste haulers
- Distilleries and beverage vendors
Professional Licenses
Some businesses need a professional license for the services they offer, including:
- Legal counsel
- Accounting
- Construction
- Health care
Sign Permit
Some states or cities have commercial sign guidelines that regulate the type, location, and size of signs you can use outside your business, and may also restrict lighting.
A sign permit is, in most cases, issued by the city government and allows you to put up outdoor signage at your business. Requirements vary from city to city, so check what applies to yours, and get consent from your landlord if you’re renting a space.
A few additional licenses and permits to consider:
- Fire department permits – for businesses that use flammable materials.
- Environmental permit – for entities whose activities are a pollution risk to the environment.
- Building permit – granted before constructing an existing or new building.
- Special state license – for businesses that sell particular products such as gasoline, lottery tickets, firearms, and alcohol.
Steps to Get a Business License
1. Register your Business Entity
It’s a good idea to register your business before applying for a license. Doing this establishes a name and business structure for your business and eases the process of applying for a license.
If you run a sole proprietorship or general partnership, your state may not require you to register. But you still need a DBA if you plan to use a fictitious business name.
Here is a comprehensive article on how to register a business.
2. Apply for a Federal EIN (Employer Identification Number)
Before applying for a business license, make sure you get your federal EIN. Most federal, state, and county entities ask for a federal EIN when you apply for a business license. Sole proprietorships may be asked for an SSN (Social Security Number) instead.
You can get your EIN directly from the IRS website. The application is free, and if approved, the IRS issues your EIN immediately online.
3. Find Out The Business Licenses You Need
As mentioned above, the type of licenses and permits you need depends on the nature of your business and its location. You can get some from the federal government; for others, you’ll need to go through your state, county, or city.
Business activities that need a federal license to operate include:
- Alcoholic beverages
- Ammunition, firearms, and any other explosives
- Aviation
- Mining
- Commercial fishing
- Wildlife
- TV and radio broadcasting
- Ocean transportation
- Logistics and transportation
- Agriculture
To determine which licenses your business needs, check with:
- A business lawyer in your state or city
- Your state’s SBA (Small Business Administration) office
- The Department of Revenue
- The Secretary of State office in your state
- Your city or county clerk’s office
4. Apply for the Necessary Business Licenses and Permits
Once you know which licenses and permits you need, apply for them from the issuing entity or agency. In most states, you can apply online, and the process can be straightforward or complicated depending on the license.
Some licenses take longer than others to obtain. Health permits and professional licenses, for example, often require passing a test or inspection. Consult an SBA office, county clerk, or Secretary of State agent to find out where to get the license you need.
Checklist for Getting a Business License
- Register your business entity
- Choose your business structure and register with your state, if required.
- Get your federal EIN
- Apply free at IRS.gov — most applicants get an EIN immediately online.
- Identify which licenses apply to you
- Check federal, state, county, and city requirements based on your industry and location.
- Contact the right agencies
- Reach out to your state’s SBA office, Department of Revenue, Secretary of State, and local clerk’s office.
- Submit your applications
- Apply online where possible, and budget for fees and processing time.
- Track renewal dates
- Most licenses need renewing every one to five years — mark the deadline so you don’t have to reapply from scratch.
Frequently Asked Questions (FAQs)
Next, we will go over some popular questions regarding business licenses and permits.
How Much Does a Business License Cost?
Business licenses typically cost between $50 and $400, depending on the state and type of license, with a national average around $200. Regulated industries can run higher — restaurant licenses often fall between $100 and $500, and construction licenses can cost more still. In some cases you may also owe processing or recurring renewal fees.
Before applying, figure out how many licenses you need, then contact each issuing agency and add up the total fees so you can budget accurately.
Can I Renew an Expired Business License?
It’s best to renew a business license before it expires — otherwise you may have to reapply from scratch. Most licenses are renewable after one to five years, depending on the issuing agency, and the renewal fee is usually lower than the initial application cost.
How do I Reactivate an Expired Business License?
The process to reactivate an expired license varies by state and by how the license expired. In some states you can renew by paying the renewal and penalty fees; in others, you may need to start a new application.
What are “Deficient” Business License Applications?
A deficient business license application happens when the application form is incomplete or improperly filled out — for example, the form is outdated, incorrectly signed, or missing required attachments.
A deficient application lengthens the time it takes to get a license, since there’s often back-and-forth between the agency and the applicant.
Who Issues Business Licenses?
You can get a business license from federal, state, county, and city governments, depending on your state’s requirements and the type of license you need.
What Should I Do if I Am Unsure What Type of License My Business Needs?
Seek advice from a business lawyer in your area. You can also check with your SBA office, Secretary of State, and county or city clerk’s office. A local business licensing service can also help you navigate the process.
How Long Does the Process Take To Get the Proper Business License?
Processing time depends on the license type, your location, and the regulations that apply to your business. It can range from a single day to several months. As one example, Washington State’s Department of Revenue notes that a standard online business license application takes about 10 business days to process, with an additional 2–3 weeks if city or state endorsements are required.
What Is a Certificate of Good Standing?
A Certificate of Good Standing is a state-issued document confirming that an entity has filed all required fees and reports with its secretary of state — including its annual report, registered agent, and franchise taxes. You may need one when applying for a foreign qualification in another state.
What Is a Certificate of Authority?
A Certificate of Authority is a document confirming you have the right to conduct business in a state other than your state of registration. You may also need one when applying for a foreign qualification in another state.
Conclusion
A business license is any legal document or permit that authorizes you to conduct business and sell goods and services in your state. There are several types — a seller’s permit, general business license, and professional license, to name a few. The ones you need depend on your location and the nature of your business.
When applying for a business license, first register your entity, then get a federal EIN. The application process can be simple or complicated depending on the license, and you may need to renew it every one to five years.
Getting a business license may cost you $50 to $400, though regulated industries can run higher. Approval can take anywhere from a day to several months, depending on your location and the licenses you need.
References
- Steingard Financial — Cost of Business Licenses: 2026 Guide for Service Brands
- UpCounsel — What Does It Take to Get Your Business License Fast
- StartCosts — How Much Does a Business License Cost? (2026 Guide by State)
- Washington Department of Revenue — Business Licensing and Renewals FAQs
- IRS.gov — Get an Employer Identification Number