How to Get a Business License: Permits, EIN, and Fees

To get a business license, pick your legal structure, figure out which federal, state, and local permits your industry and location require, pull together your formation documents and tax IDs, and file each application with its fee. Most small businesses need a general license from their city or county and often a state-level occupational or professional permit; only a narrow set of regulated industries needs anything from the federal government. Timelines run from a same-day online approval for a routine local license to a month or two for state boards and federal agencies.

Register Your Business Entity Before You Apply

Your legal structure has to exist before you can be licensed under its name. The SBA recognizes several common options: sole proprietorship, partnership, limited liability company, and corporation.¹ A sole proprietorship needs no formal setup; you become one automatically the moment you start doing business without registering anything else. An LLC or corporation, on the other hand, has to be filed with your state’s secretary of state office first.

The application forms will ask for your entity type, and the answer decides which identification numbers and formation documents you’ll need to attach. Trying to license a business before its LLC or corporation is on file with the state is one of the most reliable ways to get an application bounced back.

Figure Out Which Licenses Apply to You

Licensing in the U.S. comes from three overlapping layers: federal, state, and local. No single agency will hand you a full checklist, so you have to assemble it yourself.

Start at the top. The SBA maintains a lookup of business activities regulated at the federal level.² Most small businesses don’t fall into any federal category. If yours doesn’t, move on.

Next is the state. State governments license professional and occupational fields such as healthcare, law, accounting, construction contracting, and cosmetology through licensing boards that set education, examination, and experience requirements. Your secretary of state’s website is a useful starting point for identifying both state and local requirements.²

Then the local layer. Nearly every city or county requires a general business license or business tax certificate to operate within its boundaries. This is the catch-all permit that puts you on the local government’s radar for tax purposes and confirms your location complies with zoning. Some cities process the whole thing online in minutes. Others still want paper and an in-person visit. Call or check the website of your city or county clerk’s office to see which you’re dealing with.

Federal Licenses for Regulated Industries

Most small businesses skip this step entirely. Federal licenses apply only to specific activities, and the SBA lists the industries that trigger them along with the responsible agency:²

Firearms and explosives: manufacturing, selling, or importing requires a license from the Bureau of Alcohol, Tobacco, Firearms and Explosives.³
Aviation: operating aircraft or transporting goods or people by air is authorized by the FAA.
Alcoholic beverages: manufacturing, wholesaling, or importing alcohol requires permits from the Alcohol and Tobacco Tax and Trade Bureau plus your state and local alcohol board.
Radio and television broadcasting: broadcasting via radio, TV, satellite, or cable requires an FCC license.
Maritime transportation: shipping cargo or transporting passengers by sea falls under the Federal Maritime Commission.
Agriculture: importing or transporting animals, animal products, or plants across state lines requires USDA permits.
Nuclear energy: producing nuclear energy or handling nuclear materials requires a Nuclear Regulatory Commission license.

If any of these describe your business, start early. Federal applications routinely take longer than local ones, and operating without one in a regulated industry can bring federal prosecution rather than a fine.

Documents to Gather Before You Apply

Applications ask for roughly the same core information everywhere. Pull these together first so an incomplete-application notice doesn’t reset your review clock weeks in.

Your legal business name, plus any DBA or trade name if you’ll operate under something other than your legal entity’s name.
Entity formation documents (articles of organization or incorporation from the secretary of state) for LLCs and corporations. Sole proprietors generally don’t need these.
Your federal Employer Identification Number, or your Social Security Number if you’re a sole proprietor without employees.⁴
Location proof: a lease, deed, or similar document showing where the business will operate.
Zoning compliance, often a certificate of occupancy or a zoning approval letter confirming your location is zoned for your type of business.
Professional credentials such as diplomas, certifications, or exam results for licensed fields like contracting, healthcare, or accounting.
Insurance certificates. Some industries and jurisdictions require proof of general liability or workers’ compensation coverage before issuing a license; specific coverage types and amounts depend on your state and industry.
Background check materials. Childcare, financial services, healthcare, and security work commonly require fingerprinting and criminal background checks.

Get Your EIN From the IRS

An EIN is a federal tax ID for your business. You need one if you have employees, operate as a corporation or partnership, or file certain tax returns. Sole proprietors who aren’t required to have one often get one anyway to keep their Social Security Number off business paperwork.

The fastest route is the IRS online application, which is free and issues your number as soon as it’s approved.⁵ The tool is available most hours of the day and takes about 15 minutes. It must be completed in one session; there’s no save-and-return. Phone, fax, and mail applications using Form SS-4 also work, but they’re slower: faxed applications typically return a number within four business days, and mailed ones can take four to six weeks.⁶

One warning: never pay for an EIN. Third-party sites charge fees to “help” you apply, but the IRS issues EINs at no cost.⁵ If a site is asking for your credit card, close the tab and go directly to irs.gov.

Register for Sales Tax If You Sell Taxable Goods or Services

If you sell taxable goods or services, you’ll likely need a sales tax permit (sometimes called a seller’s permit or certificate of authority) from your state’s tax agency. It’s separate from your general business license, and plenty of new owners don’t realize it’s required until they’re already operating.

The requirement applies whether you sell from a storefront or exclusively online. Since the Supreme Court’s 2018 decision in South Dakota v. Wayfair, states can require remote sellers to collect sales tax once they cross certain economic thresholds in that state, commonly $100,000 in sales or 200 transactions, though some states have higher thresholds or have dropped the transaction count. If you sell into multiple states, you may need a permit in each state where you cross the line.

Applying usually takes your EIN, business address, expected sales volume, and bank account details. State tax agencies process these fairly quickly. Operating without a required sales tax permit can trigger daily penalties and, in some states, criminal charges, which is out of proportion to how easy the registration itself is.

Home-Based Businesses Still Need a Permit

Working from home doesn’t exempt you from licensing. You’ll still need whatever general business license your city requires, and many jurisdictions will also require a separate home occupation permit because residential zoning restricts commercial activity by default.

Home occupation permits come with conditions. Common ones include limits on non-resident employees (often one or two), no exterior signage, caps on customer traffic and delivery vehicles, and rules against noise, fumes, or visible equipment that would change the residential character of the neighborhood. Violating them can get the permit revoked, which shuts down the business at that address. Before signing a lease or building out a home setup, check with your city’s planning or zoning department. Auto repair, manufacturing, and restaurants are almost universally prohibited in residential zones regardless of any permit.

Submit Your Applications and Pay the Fees

Most cities and counties now offer online portals with immediate receipt confirmation and document upload. Some still require paper submissions by mail or in person. Either way, you’ll pay an application fee at the time of filing. General municipal business licenses commonly run somewhere between $50 and $400. State professional licenses tend to cost more, and federally regulated industries follow fee schedules set by the issuing agency.

Processing time depends on where you’re applying and what kind of license you need. A routine general business license from a city with an online system can be approved within a few business days. State professional licenses and federal permits routinely take 30 to 60 days or longer because they involve credential verification, background checks, or multi-agency review. Some jurisdictions offer expedited processing for an extra fee.

If your application comes back incomplete, you’ll receive a notice listing the specific deficiencies. Respond quickly. Many agencies set a deadline for supplemental materials, and missing it means starting over and paying the fee again.

If Your Application Is Denied

A denial doesn’t have to be the end. Licensing agencies are generally required to give a written explanation, and common reasons include zoning conflicts, incomplete documentation, failed background checks, or insufficient professional credentials.

Most jurisdictions offer some form of administrative appeal. Deadlines vary widely, from as few as five business days to 30 or more, so read the denial letter carefully as soon as it arrives. If the underlying problem is fixable, such as a missing document, an incorrect address, or a zoning issue you can resolve by changing locations, reapplying is usually faster and cheaper than appealing. Appeals make more sense when you believe the agency misapplied its own rules.

After You’re Approved: Display, Renewal, and Updates

Once you have your license, most jurisdictions require you to display the original document somewhere visible to the public at your place of business. Health, fire, and code enforcement inspectors check for it during routine visits, and a missing or expired license on the wall can bring fines on its own.

Business licenses don’t last forever. Most are issued on annual or biennial terms and have to be renewed before they expire.² Renewal is almost always simpler than the initial application, usually an updated form and a fee, but a lapse means you’re technically operating without a license until it’s reinstated. Some jurisdictions charge late fees or make you reapply from scratch once a grace period runs out.

Any significant change to the business also triggers an update filing: a new address, a new business name, a new partner, or a conversion from sole proprietorship to LLC. Failing to report these can invalidate your license even if you paid the renewal fee on time.

What Happens If You Skip Licensing

Penalties range from a warning-and-fine at the light end to misdemeanor charges and fines of $5,000 or more per violation at the heavy end, with escalating consequences for repeat offenses. The direct penalty is often the smaller problem. Contracts signed while unlicensed may be unenforceable. Insurance claims can be denied if your policy required proper licensing. Customers who discover you’re unlicensed have leverage in any dispute. In fields that require state board licensing, such as contracting, doing unlicensed work can permanently disqualify you from being licensed later.

Licensing fees are a small, predictable cost. The penalties, lost contracts, and reputational damage from working without one are not. Get licensed before you start selling.

1
U.S. Small Business Administration. Choose a Business Structure
2
U.S. Small Business Administration. Apply for Licenses and Permits
3
Bureau of Alcohol, Tobacco, Firearms and Explosives. Federal Firearms and Explosives Licenses by Types
4
Internal Revenue Service. Form SS-4 Application for Employer Identification Number
5
Internal Revenue Service. Get an Employer Identification Number
6
Internal Revenue Service. Instructions for Form SS-4