Business Licenses and Permits

One of the most common questions new business owners ask is “do I need a business license?” The answer depends on your business type, your location, and in some cases your specific clients. Requirements are set at the state, county, and city level — the rules vary dramatically depending on where you operate.

The Three Levels

Federal licenses apply only to businesses in federally regulated industries — transportation, broadcasting, firearms, alcohol, agriculture. Most small businesses do not need one.

State licenses are required for certain professions — contractors, healthcare providers, financial advisors, real estate agents. Some states also require a general state business license for any operating business.

Local licenses are the most common requirement. Most cities and counties require a basic business license or business tax certificate. Home-based businesses often need a home occupation permit.

How to Find Out What You Need

Start with your city or county clerk website. Your state Secretary of State website covers state requirements. The SBA business license and permit tool provides a general overview for your business type and location. Do not rely on a single source — requirements change.