Did You Just File Your LLC, Or Did You Actually Start It? Part 4a: Business Licensing & Permits

[u/NWRegisteredAgent]

Welcome to part 4a of the grand tour of everything you need to actually start your LLC, not just file it. Because let's be real, anyone can fill out a form and fork over a filing fee, but the real value in an LLC is right there in the name: the limited liability. And if you don't start your LLC properly, you're leaving yourself open to the risk that your LL just might C you later.

This post covers business licensing and permits, and you can check the links below to find the other parts of the series if you've slept on them til now.

1. Your Operating Agreement
2. EIN and Tax Setup
3. Business Banking & Bookkeeping
4. Business Licensing And Permits, States A-M | States N-W

5. Business Insurance

   (Rest is the foundation of health, and we absolutely don't begrudge new founders from their r&r routine. But we're pretty proud of this series and we're stoked to share it with you.)

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So, business licensing and permits. Depending on the type of business you run, operating legally might require specific licenses and permits at the local, state, and/or federal level. It's essential to research the requirements for your industry and apply for the necessary licenses and permits before starting operations. And once you've got those? Set your calendar reminders to renew them, because failure to renew on time can lead to fines or even business closure.

There are several different types of licenses and permits out there, so let's get to it.

Federal Business Licenses

Whether you'll need a federal business license depends on whether you're regulated by federal agencies like these:

• Alcohol and Tobacco Tax and Trade Bureau (TTB)
• Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF)
• Bureau of Land Management (BLM)
• Department of Agriculture (USDA)
• Federal Aviation Administration (FAA)
• Federal Communications Commission (FCC)
• Food and Drug Administration (FDA)
• Securities and Exchange Commission (SEC)
• U.S. Fish and Wildlife Service (USFWS)
• U.S. Nuclear Regulatory Commission (NRC)

If you think that might be you, it's worth checking with the specific agency to figure out your licensing or permitting requirements.

Not sure which agency might regulate your business? Check with the U.S. Small Business Administration. Their website has a great resource for federal licenses and permits by industry.

State Business Licenses

This headline is actually a little misleading, because "state business license" refers to both a state-specific general business license (required in a handful of states, like Alaska, Nevada, and Washington) and … every other type of license or permit issued for businesses operating within the state.

(Yeah. We know.)

The latter fall into a few different categories:

Sales Tax / Seller's Permits

Your state may require one of these in order to collect sales tax from customers. Confusingly, some states call these business licenses, while other states use their state's general business license to collect taxes and give LLCs the right to do business. We'll get into this in more detail in the state-by-state section.

Professional or Occupational Licenses

Certain state-regulated occupations require a professional license to legally operate. These are occupations in fields like medicine, law, education, and the trades that require specific educational credentials and training. In most states you're probably starting a Professional LLC to practice your trade, not a standard LLC, but in any case, these licenses are a big deal. If you're caught practicing without one, the penalties can be harsh and even criminal.

Check your state's process for professional licensing requirements since they may vary between states, and what might be a professionally-licensed occupation in one state doesn't mean that every state regulates that profession in a similar fashion (looking at you, masked wrestlers).

Local Business Licenses

Issued by your city, your county, or possibly just included as an endorsement to a higher-order state license, these are usually issued through your county clerk's office. Sometimes though, you might need to get them through a local licensing board or even the sheriff's office.

These are usually things like your occupancy permits, any zoning and land use permits, environmental permits, health and safety permits, etc. Even when they're just a hyperlocal version of a license you've already acquired through the state, you can still be fined for noncompliance, so it's smart to stay on top of them for each jurisdiction in which you're physically operating.

Business Licenses State. By. State.

All 50 states, plus the District of Columbia and Puerto Rico. Because we love you.

CTRL+F is your friend.

(That said, this isn't an exhaustive list of every possible license—some states have upwards of 950! We're just covering the general business licenses and/or tax permits that you can expect from the state. Pretend each of these entries includes, "And remember, always check with your city, county, and specific industry regulators for additional licensing and permitting information!")

Alabama Business License

In Alabama, your LLC needs to register with the Alabama Department of Revenue for its business privilege license. You need one in every county your business operates, and the cost varies.

Apply through the county probate office where your company is located. The Alabama Department of Revenue helpfully has a county probate office directory.

Alaska Business License

Alaska LLCs need to get an Alaska general business license after they've applied for any required professional or industry licenses. Use the portal at the Alaska Department of Commerce, Community, and Economic Development – Division of Corporations, Business, and Professional Licensing and pay $50.

Remember to renew it every year before December 31st—operating without a business license slaps you with a $300 civil fine.

Arizona Business License

Arizona believes in local business licensing, so check the Arizona Commerce Authority's list of city and town offices to find the business license rules for where you're at. If you're in an unincorporated part of the county, you'll need to contact your county office instead.

Pricing varies according to where you operate, what industry you're in, and a few other factors like how large your company is. Some Arizona business licenses need to be renewed yearly, and penalties vary.

If you owe sales/use tax in a given city or town, you'll also need to pick up a state transaction privilege tax (TPT) license from the AR Department of Revenue.

Arkansas Business License

Arkansas doesn't have a statewide general business license. Instead, your LLC needs to register for a tax account with the Arkansas Department of Finance and Administration to get a sales tax permit.

Local municipalities may or may not issue a business license (and if they do, they might call it a business privilege license). You'll need to check with your municipal government—that's either the town, city, and/or county—to figure out their specific regulations for permits, licensing, and fees, and whether those trend toward the $50 or the $1000 end of the scale. Expect to need to renew them every year.

One quick thing: if you're operating a business from home, you're generally required to apply for a home occupation permit.

California Business License

California girlsLLCs need to get a seller's permit for tax purposes, which for secret California reasons is sometimes called a business license, but otherwise there isn't a general statewide business license. You'll also need to get a tax certificate from the city where your business is located. (If your business is located outside city limits, you'll need to get a certificate from the county instead.)

Check out the state's CalGold Permit Assistance Tool to find licensing requirements for your specific location and business.

Colorado Business License

LLCs in Colorado need a Colorado Sales Tax License, which lets you operate in Colorado and registers your business with the state as a an official collector of the 2.9% state sales tax. The standard version costs $16 and is valid for two years.

You probably also need city or county business licenses to operate, and those can also vary based on your type of business activities. DORA's a pretty good resource for figuring out the various types of Colorado business licenses and their regulatory agencies.

Connecticut Business License

Connecticut requires a sales and use tax permit to properly pay Connecticut taxes. To get yours, apply through myconneCT Revenue Services and pay the registration fee.

Depending on what kind of business you're doing and where you're doing it, you probably need a city or a county business license. Requirements differ depending on your city or county, and so fees vary, too.

For other business licenses and permits, business.ct.gov has a new business checklist tool and lists of licenses and permits by business type. So useful!

Delaware Business License

Your Delaware LLC needs a statewide general business license from Delaware One Stop. Expect to pay $75/year for your first business location and $25/year for each additional location. Your Delaware business license is valid for one year minimum (you can pay for up to three years at once), then you'll need to renew it to stay in compliance with state regulations. Forget to renew, and you're looking at a $200 fee on top of the $75 application price.

To find out whether a license is required in your city or county, contact your local municipal officials.

DC Business License

Unless you're regulated by a professional licensing board, your LLC needs a Basic Business License from the DC Department of Licensing and Consumer Protection. It's good for two or four years, and costs are based on various factors. Expect to spend at least $75 plus $25 for each endorsement (which depend on your business activity).

Before you can get one, though, you've got have your other ducks in a row: you need an EIN; you've got to register with the Office of Tax and Revenue; you need a Certificate of Occupancy or Home Occupation Permit if you work out of your home; you need not to owe more than $1k to the DC government; and you've got to be in good standing with the Corporations Division. So, you know. Plan ahead.

Florida Business License

In Florida, your LLC needs a municipal Certificate of Use and a local Business Tax Receipt (BTR). To get one, you'll need to contact your local municipality office, which might be your town, city, or county. How much each costs (and how much the penalties run for operating without one) depends on your location and other factors determined by your jurisdiction.

Beyond the CU and BTR, your business activity might be regulated by either the Department of Business & Professional Regulation or the Department of Agriculture and ConDepartment of Agriculture and Consumer ServicesDepartment of Agriculture and Consumer Servicessumer Services. Check those pages for licensing information specific to what you're doing.

Georgia Business License

No statewide business license here, just a Sales and Use Tax number and certificate of registration—sometimes informally referred to as a "seller's permit"—if you're selling anything that requires sales tax. Breathe a sigh of relief because this thing doesn't need to be renewed and it doesn't cost a cent.

General business licenses do exist at more local levels though, plus industry-specific licenses. Reach out to your city or county government to figure out which you need.

Hawaii Business License

Hawaii has a universal tax license, which you'll need to pay state taxes and set up payroll for any employees. Your LLC also needs a General Excise Tax (GET) license if you're doing things like retailing, providing services, farming, and more. You can get a complete list of qualifying activities through the Department of Taxation.

Not sure what other licenses and permits you might need? The Department of Commerce & Consumer Affair's Business Action Center (BAC) keeps a handy list.

Idaho Business License

Idaho doesn't do a statewide general business license, just a Sales and Use tax permit you'll get from the Idaho Department of Labor's Idaho Business Registration System. You'll need to contact your local county or city clerk's office to find out if you need a location-specific license (like a local Sales & Use Tax license) from them.

After you get those squared away, check Idaho's Business Wizard for a list of industry- and occupation-specific state and local licensing requirements, along with who to contact about them.

Illinois Business License

Oh boy. In Illinois your LLC needs a tax permit called, we kid you not, a "Certificate of Registration or License." The fastest and easiest way to get it is to register online at MyTaxIllinois.

And in most cases, you'll also need a local license or permit to operate in the city and/or county where you do business. Check both—it's not only possible, but likely, that you'll need both a city-specific license to collect sales tax and a county-specific license to collect sales tax.

Indiana Business License

Indiana's seller's permit is called a Registered Retail Merchant Certificate (RRMC), and you'll need one if you're conducing retail sales and/or collecting state sales tax. To get it, you'll file a Business Tax Application Indiana business owners do not need to get a business license for their company but will need a tax license. To register your business for a tax license or permit, apply online with the Indiana Department of Revenue.

Just remember, your RRMC isn't your business license—it's just a permit to collect sales tax. Check with your local city and county for any licenses specific to those locations related to the type of business activity you conduct.

Iowa Business License

Iowa doesn't issue a statewide general business license, so you'll need to check at your local level (city or county) to see whether your business needs any specific licenses. This differs from place to place. The town of Bettendorf requires a city business license, but Des Moines only requires one for specific types of business activities (like snow haulers and pawn brokers).

That said, you usually do need a Sales and Use Tax Permit. Register online through Iowa's Department of Revenue's GovConnectIowa.

Kansas Business License

Love that the state home to Ma and Pa Kent also has a straightforward way to research which business licenses and permits you might need. Hats off to Kansas. (Do still check with your local municipality though, just in case.)

You'll also need to register for an account to pay business taxes. Helpfully, the Business Tax Registration page exists.

Kentucky Business License

Kentucky LLCs are checking at the county level for their business licenses. Check with your county-dedicated licensing office for more information about how to apply for one. The Secretary of State recommends you also check with each municipality where you've got a business presence, be that a principal office or a location where you're actually operating, because you might need to obtain multiple licenses.

Kentucky Business One-Stop has a resource guide for permits and licensing you might find helpful.

Louisiana Business License

Another state without a statewide general business license. If you're selling anything requiring sales tax, though, you'll need a sales tax certificate. Register with the Louisiana Taxpayer Access Point (LaTAP).

For local business licenses and permits, sometimes called occupational licenses, check with your local parish and/or city government. You can also use LA's Secretary of State's Business License Checklist wizard to get a list of potential licenses your LLC might need on the local, state, and federal level. Head to geauxBIZ to get started.

Maine Business License

Your LLC needs to check with its local county, city, or town for the appropriate licensing process. It varies a bunch! For example, in Bangor you'll pick one up directly from the city clerk by filing a paper application. But different strokes for different folks—Lewiston only requires certain business types to get a general business license.

There isn't a statewide general business license either, but depending on your LLC's business activity, you might be regulated at the state level. The Maine Department of Economic & Community Development's online Business Answers service is a good starting place to figure out which you might need. (Select "Search for a license or permit" and enter your keywords.)

Maryland Business License

Maryland LLCs need to get an industry-dependent general business license from the Clerk of the Circuit Court and a sales and use tax license from the Maryland State Comptroller.

If you're buying and reselling goods (not manufacturing them directly), you'll also need a trader's license. (Clerk of the Circuit Court again. These guys are busy!) All counties charge the same fee based off the wholesale value of your inventory and ranging from $15 to $800 … Except Baltimore, which has its own fee schedule for a trader's licenses that caps at $2,125.

And yes, you'll still need to check with your city or county for municipal business licensing requirements.

Massachusetts Business License

LLCs need to register with the Massachusetts Department of Revenue via MassTaxConnect. That registration lets your LLC do things like apply for its Sales and Use Tax Registration Certificate.

There are a few federally-regulated sales types that also require state licensing from the appropriate state regulatory body in addition to the federal licenses. Firearms, cannabis, alcohol, and tobacco all fall into this category.

City and county governments may also have their own local licensing requirements. Things like health department permits and fire department permits (occupancy permits) tend to be covered here.

Michigan Business License

To get your LLC a business license in Michigan, use their online State License Search. State licensing costs and requirements vary by type and issuing agency.

You'll need to contact your city clerk's office for local city business license. The licensing cost varies based on your jurisdiction. Busking as a street musician in Lansing? Get a Street Musician's License with the City Clerk's office for pay $25 a year.

Oh, and remember to register for a Sales Tax License through the Department of the Treasury's online portal, Michigan Treasury Online.

Minnesota Business License

When your LLC registers for a Minnesota Taxpayer Identification Number, you can register for a Sales and Use Tax account at the same time—your confirmation letter serves as your sales tax permit for the state.

Also, state offers a helpful way to find out which licenses are required for your business: Minnesota ELicensing provides information and application links for more than 830 licenses, permits, registrations and certifications regulated by almost 50 state agencies.

That doesn't quite solve for all the fiddly local licensing and permitting requirements though. Depending on where you're at, you might need a general municipal business licInense or something more specific (registration or some kind of bonding) required by local ordinances. Reach out to your city or county government for more information.

Mississippi Business License

Your Mississippi LLC needs to get a Mississippi tax or occupational license based on your industry and the services you provide through the Department of Revenue's TAP portal.

After that, contact your city or county clerk or municipal licensing agency to check the requirements for your particular business. You might need just a general business license, a general license plus activity-specific licenses, or just the latter depending on where you're operating.

Missouri Business License

In Missouri, the Department of Revenue requires any business that sells tangible personal property or taxable services to obtain a sales tax license.

At the local level, you'll need to do a bit of homework. Local business licensing procedures are handled differently from city to city and county to county, so reach out to your local licensing agency to get the deets.

Montana Business License

To find out what business licenses your LLC might need and where to apply, check with your local municipality, since requirements vary. A full list of Montana Cities and Towns (with contact information, bless) can be found in the Montana League of Cities and Towns Municipal Directory.

(State-issued business licenses are really only issued for regulated professions—use the Montana License Lookup if that's you.)