How to get a business license and how much it costs in each U.S. state (2024)

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In basic terms, a business license gives you the approval to run your business within a certain jurisdiction. It not only helps legitimize your company but also ensures that you're operating within the law and complying with any regulations related to your industry.

Use this guide to learn how to get a business license and better understand the application process.

How to get a business license

Here’s a quick breakdown of the process of getting a business license:

• Determine what type of business license you need: Types of business licenses can vary depending on your location and industry, and the business you're running. For example, if you're starting a food truck, you'll need a different license than if you're starting a massage therapy business.
• Gather all the necessary documents and information: This can include your business registration certificate, tax ID number, and proof of insurance. You may also need to provide information about your business location, ownership structure, and any relevant permits or certifications.
• Submit your application and pay any associated fees: The processing time can vary depending on where you live, but you can usually expect to receive your license within a few weeks.

Research and prepare before applying

Before you start submitting applications for your business license, you can save time and effort by researching and preparing in advance.

That’s because licensing requirements and regulations are typically specific to your business location and industry. Getting a business license in California may be different from doing so in New York, for example. Cities and states have different regulations, so it's helpful to know what they are before applying for a license.

Here are some documents you may need to provide when applying for a business license:

• Business name, address, and phone number
• Employee identification number (EIN) or social security number (SSN)
• Business plan with revenue and expense projections
• Tax documents
• Proof of insurance

Here are a few more factors to consider when obtaining a business license:

• The cost of the license:As for the costs involved, fees can vary widely depending on the location and industry. Generally, you can expect to pay anywhere from $50 to several hundred dollars.¹
• The renewal process:Business licenses typically need to be renewed annually. Be sure to check with your local government to find out the renewal deadline.
• The penalties for operating without a license:Keep in mind that operating a business without a license can result in fines or other penalties.

Business license application process

After you’ve researched the requirements and gathered the documents needed for a business license in your state, you’re ready to start the application process.

The application form will typically require you to provide basic information about your business, such as the name, location, and type of business entity. You may also need to provide details about the ownership and management of the business, as well as any employees you have. Some jurisdictions may also require additional documents like proof of insurance, tax identification numbers, or zoning permits.

Once the application is completed, you will usually need to pay a fee to obtain the license; this fee can vary depending on location and business type.

Here are some of the different types of business licenses and permits:

• Professional licenses: These are required for individuals in certain professions, such as doctors, lawyers, and accountants.
• Regulatory licenses: These are required for businesses that are regulated by the government, such as those in the food or health industries. Examples of these licenses include health, building, or fire permits.
• Occupational license: This type of license is required for businesses that engage in certain professions, such as cosmetology, plumbing, or electrical work.
• Sales tax permit: This type of permit is required for businesses that sell goods or services that are subject to sales tax.

Keep in mind that getting a business license is typically not a one-time process. In most cases, there are business license renewals, which may come with added fees. Plus, there may be ongoing requirements for maintaining a license, such as regular inspections.

State-by-state guide to business licensing

So, how much is a business license? From the cost of getting a business license in Washington state to Nevada, you can expect not only the fees but also the guidelines and requirements to vary.

That’s why researching business licenses in your specific location is crucial for anyone looking to open or operate a business.

If you’re not sure where to start with how to obtain a business license, we suggest visiting your state government's official website and reviewing its rules and regulations. Here are some resources to help you begin:

• Small Business Administration (SBA) website:The SBA provides information on state and local licenses and permits that may be required to operate your business.
• Business.usa.gov:This website is designed to help business owners navigate federal, state, and local government regulations. It provides information on licenses and permits required by various states, as well as links to state-specific resources.
• State government websites:Each state has its own website with information on the requirements for obtaining a business license. For instance, if you want to know the cost of a business license in California, you can visit theCalifornia Department of Tax and Fee Administration (CDTFA) websiteto learn more.

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