How to Get a Business License in 2026: Steps and Costs
To get a business license, find out which offices regulate your type of business at your address, then apply with each one, usually online. The U.S. Small Business Administration says the licenses you need depend on your business activities and location, and that the fees vary too.
For most small businesses that means two or three applications, not one, and each comes from a different level of government.
Do you need a business license?
Yes, if you sell goods or services on a regular basis. No single U.S. business license covers the whole country. Your city or county usually issues a general license, your state handles sales tax and regulated trades, and a federal agency steps in only for activities like alcohol, firearms, or aviation.
Structure does not change the answer. A sole proprietor selling candles at weekend markets faces the same local rules as an LLC. Washington, for example, requires a state business license once your gross income reaches $12,000 a year, or sooner if you sell taxable products, plan to hire, or use a name other than your full legal name, according to the Washington Department of Revenue.
How do you get a business license, step by step?
Do the steps in this order, because each office asks for what the previous one gave you:
Which licenses and permits might your business need?
Expect at least two layers: a local license and a state tax registration. Add the others only if your activity calls for them:
| Layer | Who issues it | Common examples |
|---|---|---|
| Local | City or county | General business license, business tax receipt, home occupation permit, zoning approval |
| State | Revenue department or licensing board | Sales tax permit, professional licenses, statewide business license in a few states |
| Industry | Health department, fire department, state boards | Food permits, cosmetology licenses, street vendor permits |
| Federal | Agencies listed by the SBA | Alcohol, firearms, aviation, agricultural imports, commercial fishing |
The sales tax permit goes by many names: seller's permit, Certificate of Authority, or vendor's license. It is not the same as a resale certificate, the form you give suppliers to buy inventory without paying sales tax.
How much does a business license cost?
Expect the state part to cost $200 a year or less for a sole proprietor or LLC, and budget separately for your city. In these seven states, state fees run from free to $200:
| State | What you apply for | State fee |
|---|---|---|
| Alaska | State business license | $50 a year or $100 for two years |
| California | Seller's permit | Free |
| Nevada | State business license | $200 a year ($500 for corporations) |
| Ohio | County vendor's license | $50 |
| Texas | Sales and use tax permit | Free (a security bond may apply) |
| Washington | Business license application | $50 to open, plus endorsements |
| Florida | Local business tax receipt | Set by each county and city |
Local examples, not nationwide rules. Fees checked in October 2026. Verify the current amount with the agency that covers your address.
The state fee is rarely the whole bill. California has no general statewide license, so cities set their own, and the state's CalGold tool lists which permits apply in your city and who issues them. Industry licenses, like a food permit, carry their own fees on top.
How long does it take to get a business license?
Start at least a month before opening day and apply online whenever you can. Washington processes online applications in about 10 business days, adds two to three weeks when you need city or state endorsements, and takes up to six weeks for mailed forms.
Some offices let you start sooner. In Los Angeles, you get a temporary Business Tax Registration Certificate as soon as you finish registering, and the permanent one arrives by mail in four to six weeks. Your EIN comes instantly, so that step never holds up the rest.
Do you need a business license for a home-based or online business?
Yes, in most places. Working from your kitchen table or selling only online does not exempt you. The SBA notes that zoning rules can apply even to home-based businesses, which is why some cities ask for a home occupation permit along with the general license.
Online sellers also owe sales tax registration in the states where they have to collect it. If you sell occasionally as an individual and are not sure you count as a business yet, see how to accept card payments without a business.
Do you need to renew your business license?
Yes. Every state in these examples asks you to renew at least every two years, so set a reminder the day you get yours:
What happens if you operate without a business license?
You risk penalties, back fees, and trouble collecting sales tax legally. Penalties are set locally, so the exact amount depends on your city and state. Florida's late penalty for business tax receipts, up to 25% of the tax, shows how fast a small fee grows when you ignore it.
Sales tax is the bigger risk. New York requires you to register before you begin business, and selling taxable goods without a permit leaves you owing tax you never collected from customers. Fix it the moment you notice: apply now, and ask the agency how to handle the period you already operated.
What should you set up after you get your license?
Set up a way to get paid before your first customer shows up. Your license lets you sell; your customers still expect to pay by card. JIM works for sole proprietors and single-member LLCs in all 50 states, and you can sign up with a phone that has NFC and a photo ID. No bank account is required to start.
You saw that an Alaska license costs $50 a year. With Tap to Pay on JIM, a $50 sale costs less than $1 in fees, because JIM charges a flat 1.99% per tap with no monthly fee. For customers who are not in front of you, a payment link costs 4.99% plus $0.30. See every rate on the JIM pricing page, and for the full launch checklist, read how to start a small business.
License fees and processing times are reviewed every year. Last reviewed: October 2026.
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