State Business License

A state business license is a document that offers proof that a business is legally allowed to operate in that state. Some states require business licenses at the state level, but oftentimes business licensing is done at the city or local level.

Do I Need a Business License?

Do I need a business license? We get this question all the time, and the answer depends on the type of business you run.

Every state (as well as some counties and cities) require you to have at least one type of business license if you plan to conduct business there.

Typically, filing for the required business licenses comes after you decide on your business entity, whether that will be operating as a sole proprietor, a partnership, a limited liability company, or a corporation.

If you plan to run a business out of your home, you likely will need at least one basic business permit or license, such as a sales tax permit. If you’re opening a local business like a restaurant or daycare, you’ll need even more licenses as well as inspections that ensure you comply with industry regulations. If you are renting commercial real estate, you may need a zoning permit that ensures that what you want to do with the space is consistent with what the space was zoned for.

It’s imperative that you understand what licenses you are required to carry before you launch your business.

Where Do I Go for a Business License?

We decided to compile a list of business licensing resources by state to get business owners across the country going in the right direction. Along the way, we found a few other licensing resources worth mentioning:

• Your local SBDC or town/city clerk: If you ask a SCORE mentor, they will likely tell you that this is the best place to start, and in many cases this is true. Many of the licenses/permits you may need to start your business are city-level permits. Your city clerk should have a full list of licenses you will need, and this is the best way to make sure you have covered all your bases.
• CityApplications.com: City Applications has contact info at the city-level for business licenses and permitting information. 
• SBA.com: Not to be confused with the Small Business Administration, Small Business Advice has information on starting and running a business, including business permitting and licensing specifics by state. Some states have more detailed information than others.
• SBA.gov: The Small Business Administration has information on permits for federal licenses in different industries, but little on state licensing.

What Do I Need to Get a State Business License?

Typically, applying for a state business license isn’t that time-consuming, but you will need some information about your business as well as documents to expedite the process, so it’s worth doing a little research beforehand on business license requirements in your state.

Many will ask for your employer identification number. This is like a social security number for your business and will come in handy for everything from opening a business account to filing taxes. It’s free to get.

You may also be asked basic questions about the type of business activity you engage in as well as how much you make (or hope to make) in revenue. You will also need to provide basics like your business location and contact information.

Having any documentation that will be required at the ready will ensure you spend minimal time at the business license department of your local government and don’t risk being charged additional fees for not having everything needed to apply.

Business Licensing Resources for Each State

We found out that most states don’t have a comprehensive business licensing search website for small business owners. Some do have a searchable function, others have a “one-stop” business registration website that includes permitting and licenses, and still others have a dedicated page directing business owners to contact their local town or city clerk for business licensing information.

Below you’ll find a list of resources for each state. You can also look at your Secretary of State’s website for information on what state business licenses you need.

We found that some states had more helpful websites than others, so we’ve categorized them based on their level of helpfulness:

• Extremely helpful: this is gold standard — might have a searchable database with information on all the permits you will need for your business.
• Very helpful: offers a “one-stop” launch-your-business portal with licensing information.
• Helpful: offers many license/permit details online, but is not complete—see your local city clerk for complete license information.
• Somewhat helpful: primarily helpful for businesses that know what they are looking for; some of these sites offer contact information for your local state department authorities.
• Not very helpful: there are very few or no online resources offered. For these websites, it’s best to go straight to the county or city clerk.

Final Thoughts on State Business Licensing

You have a lot on your list of priorities when starting a business. Just make sure that filing for any business licenses or permits you need is high on that list. In some cases, you may not be able to even open for business without those licenses. If you plan to hire employees, don’t jeopardize their ability to work in your business by dragging your feet to get licenses that may take weeks to be approved.

Knowing what license fee or fees you’ll have to pay ahead of time keeps that expense from being a shock, so take some time to research those costs.

And finally, know that you will be responsible for your business license renewal. You may not receive a notice in the mail reminding you to renew it, so to remain compliant with your state and local authorities, take notice of that expiration date so you can make sure you’re ready with your renewed license.

Brick-and mortar companies, home-based businesses, B2B companies, and consumer-facing ones all need state business licenses. Failure to do your research on what you need could have serious consequences for your company.