If you’re planning to start a business, one of the first things you need to do is obtain the business licenses your business needs. But, how much does a business license cost exactly? 

Answering this question isn’t as straightforward as it seems since it depends on several factors, including the type and location of your business, the industry you are in, and the level of government regulation (local, state, or federal) that requires it.

In this article, we will cover the general factors that can influence your total business license cost as a business owner, and a brief overview on the common steps on how to get that license.

Business License Cost

The total cost of obtaining these licenses and permits is influenced by factors such as location, industry, and type of business that is looking to get licensed.

Below we’ve provided a brief overview of these factors and how they can affect your total business license cost:

Business Type

A business’s licensing cost can vary based on the activities it performs, as this directly influences the specific licenses it needs. For example, while most businesses will need some form of a Sales Tax Permit, businesses that involve specific activities — such as liquor sales, amusement stores, or food services — will require specialty licenses. Each of these licenses will vary in cost based on the regulation and business activity.

Industry

The industry in which your business works also plays a significant role in its total business licensing costs. This is because industry-specific licenses can have fee structures that vary at federal, state, and local levels. For example, businesses in the food industry may need to obtain health permits, food safety certifications, and liquor licenses from various local agencies.

Another example is the transportation industry, in which businesses often need to be licensed from the Department of Transportation, the Federal Aviation Administration, or the Federal Motor Carrier Safety Administration in order to operate legally.

On top of these state obligations, it’s common for local jurisdictions like cities and counties to apply their own additional licensing requirements — which can further increase the total cost of getting licensed in these industries.

Location

As touched on above, many cities and counties have their own licensing requirements which can add to the total cost of getting licensed. For instance, in San Francisco, small home-based businesses commonly need a business license, which can cost over $100 annually. This applies in addition to any state and federal requirements.

Speaking of which, at a state-level each jurisdiction has its own set of licensing requirements and fees. As an example, all businesses in Nevada are obligated to a general state business license, which can cost between $200 and $500 depending on your business type.

In addition to all of this, some industries are regulated at the federal level. For example, businesses involved in the sale of alcohol need a permit from the Alcohol and Tobacco Tax and Trade Bureau (TTB), and the fees may vary based on the type and volume of sales.

The combination of all these factors is what creates the opportunity for such variation in a business’s total licensing costs. In the table below, we’ve explored the basics of how these factors work together in every state. For more information on the situation in your state, check the links to our state-specific articles.

State	Details
Alabama	In Alabama, all businesses must get a Business Privilege License from their local county office and register it annually with the Department of Revenue. This license has no associated fees.
Alaska	Alaska requires a general business license at the state level from the Alaska Department of Commerce, Community, and Economic Development. The cost for this business license is $50 per year.
Arizona	Arizona does not have a statewide general business license. However, it’s worth noting that some cities and towns in Arizona may issue their own local licenses and set specific costs.
Arkansas	There is no general business license at the state level. However, your business may need other licenses or permits depending on your location and activities, which can have varying costs.
California	California does not have a general business license requirement. Your business might still need to obtain other local business licenses with associated fees depending on your location and the type of business.
Colorado	Colorado doesn’t issue a statewide business operating license. However, your city or county might necessitate additional business licenses with fees, which can be obtained from the city or county clerk’s office.
Connecticut	Connecticut doesn’t grant a general business license at the state level. However, local licenses and permits with associated fees might be necessary depending on your city or county.
Delaware	In Delaware, all businesses must obtain a state business license from the Delaware Division of Revenue. The cost of the license depends on the type and category of your business, typically ranging from $25 to $300 per year.
Florida	Florida does not have a general business license at the state level. You can search for the costs for various types of licenses and permits in your city or county’s offices and websites.
Georgia	Georgia does not require a general business license at the state level. However, businesses in certain industries may need to get licensed from one of the three state-level agencies, which often requires a fee to be paid.
Hawaii	In Hawaii, all businesses need to obtain a General Excise Tax (GET) License in order to pay GET and operate legally. The fee to file for a General Excise Tax License is $20.
Idaho	Idaho does not require a general business license at the state level. Most cities or counties in Idaho require businesses to obtain a local business license or tax certificate to operate within their jurisdiction, which can have varying costs.
Illinois	Illinois does not require a general business license. However, businesses may still need to obtain specific permits or licenses with varying costs depending on their location and industry.
Indiana	Indiana does not provide a general business license. However, most cities or counties in the state require businesses to obtain a local business license or tax certificate to operate within their jurisdiction, which can vary if each city or county has different licensing costs.
Iowa	Iowa does not require a general business license at the statewide level. However, depending on the nature of the business and its location, you might need specific permits and licenses which differ in cost based on your business type and where you plan to operate.
Kansas	Kansas does not require a general business license at the statewide level. But depending on the nature and location of your business, specific permits and/or business licenses might be necessary, each with their own set of fees.
Kentucky	Kentucky does not require a general business license. However, specific permits and/or business licenses might be necessary depending on the nature and location of your business. Other types of licensing in the state typically have varying fees.
Louisiana	Louisiana does not issue a statewide business license. That said, you may be obligated to obtain certain licenses specific to your industry or the city/county in which your business operates. The costs of each of these will vary.
Maine	In Maine, there’s no general business license fee at the state level. However, there are specific fees associated with other licenses or permits that certain types of businesses may be required to obtain.
Maryland	In Maryland, businesses are not required at a state level to obtain a general, universal license. However, the need for a license and the associated costs depend on the type of activities a business performs and the city or county in which they operate.
Massachusetts	Massachusetts doesn’t have a single general business license required for all businesses at the statewide level. The need for a license and the associated costs depend on the type of your business and activities.
Michigan	Michigan does not require a general business license for all businesses operating within the state. The primary business license in Michigan, the sales tax license is free. Instead, businesses are subject to the local licensing requirements of their municipality or county, which can vary based on the activities it performs.
Minnesota	Minnesota does not have a sole general business license required for all businesses at the state level. Instead, the need for licenses or permits is based on the type of business and its specific activities. The fees for these licenses are often unique to each one.
Mississippi	Mississippi doesn’t have a general business license at the state level, so there are no fees associated with it at that level. However, your business may need other specific licenses or permits depending on its nature and location.
Missouri	Missouri doesn’t have a general business license. However, depending on the nature of your business, there may be specific licenses or permits you need to obtain. Each of these licenses and permits will have different associated costs.
Montana	Montana doesn’t mandate a general business license at the state level. There may be specific licenses or permits, each with their own set of fees, you need to get based on your business niche and location (i.e. your city and county).
Nebraska	Nebraska doesn’t issue a statewide business license. However the fees associated with the specific local licenses and permits that you may need to obtain at a city or county level have fees that vary in value.
Nevada	Nevada requires businesses to obtain a state business license. The business license fee is $200 for most entities and $500 for corporations. Business licenses must be renewed annually.
New Hampshire	New Hampshire does not impose a statewide general business license for businesses so there’s no fee related to it. Instead, there might be specific licenses or permits that your business requires based on the sorts of activities it performs and its location. The fees of these various specific licenses vary on an individual basis.
New Jersey	There’s no general business licensing requirement in New Jersey. However, some business activities require a state license, which can have varying fees depending on the profession.
New Mexico	New Mexico doesn’t offer a general business license, although specific licenses may be needed for certain industries and business activities. The costs of these more specific licenses usually vary depending on where you’re located and what type of business you’re running.
New York	New York doesn’t require a general business license. However, you may need to obtain other licenses and permits depending on your business type and location.
North Carolina	In North Carolina, there’s no statewide business license. However, cities and counties require a local license. Since their cost varies between different areas, be sure to contact your city officials for an accurate estimate.
North Dakota	North Dakota doesn’t require a business license statewide, but cities and counties might require one depending on your business type. There are specific fees involved when it comes to applying for local licenses and permits.
Ohio	Ohio does not have a general business license. However, any business making taxable sales from a fixed place or institution will need to pay a $25 fee to obtain a vendor license. Specific local or professional licenses can further increase your business’s licensing fees.
Oklahoma	In Oklahoma, there is no general license required to start or own a business. However, specific types of businesses and occupations might require licenses, permits, or certifications, and each come with their own set of fees.
Oregon	Oregon issues a general business license that all businesses must obtain. Instead, the cost of getting licensed will vary depending on the specific local business licenses in Oregon required.
Pennsylvania	Pennsylvania doesn’t provide a general business license for businesses at the state level. However, depending on the city or county your business is based in, there may be some local business licensing requirements specific to your location or industry that you need to satisfy.
Rhode Island	Rhode Island doesn’t have a general business license. Instead, there might be specific licensing requirements and costs based on your city or county and the type of business you operate.
South Carolina	South Carolina doesn’t issue a general business license statewide. However, there might be specific business licensing requirements and fees depending on your location and type of business.
South Dakota	At the state level, South Dakota doesn’t mandate a general business operating license for businesses. Nonetheless, certain business types and professions may need specific licenses, permits, or certifications.
Tennessee	There is no general business license requirement in Tennessee. However, any business based in this state generating over $3,000 in gross annual receipts will require one of two mandatory licenses.
Texas	Texas does not require a general business license for all businesses. However, depending on the type of business and the municipality, there might be specific licenses or permits required with their own set of costs.
Utah	Utah doesn’t have a statewide general business license. However, businesses working in specific professions and locations may require certain additional state or local licenses with varying fee structures.
Vermont	In Vermont, there’s no general business operating license. However, your business may need a state-level occupational license or municipal-level license or permit to operate, which vary in cost on a license-to-license basis.
Virginia	Virginia doesn’t require a general business license statewide. Your business may still need other state or municipal-level licenses to operate depending on your location and your business’s activities. There are specific costs associated with these licenses and permits.
Washington	While there’s no general business license requirement in Washington, most businesses will be required to pay $50 to obtain a Business License Tax Certificate. On top of this, additional state or local licensing requirements, influenced by the industry and location your business works in, can increase this cost.
Washington DC	Yes, all businesses must obtain the Basic Business License (BBL) from the Department of Licensing and Consumer Protection (DLCP)Businesses must pay $6.60 for each BBL Duplicate Request per license on top of a fee for the license itself, which varies between $35 and $140 depending on the duration you selected.
West Virginia	West Virginia does not have a statewide general business license. While many cities in the state require businesses to be licensed, exact fee structures for business licensing will depend on the location and the type of license required.
Wisconsin	Wisconsin does not have a general business license. However, there are specific registrations and permits that your business may need to obtain, depending on your operations and location.
Wyoming	No general business licensing requirement. Nevertheless, your business may need specific licenses or permits, depending on its nature and location.

How to Get a Business License

How you go about getting a license will vary depending on several factors, including your business’s location, type, and the services it offers. We’ve detailed how these factors influence the process of getting licensed in our step-by-step guide on how to obtain business licenses and permits from various federal, state, and local agencies.

Step 1: Form Your Business

Before you can apply for a business license, you need to choose a business entity for your company. A business entity is the legal structure of your organization that determines how it operates, pays taxes, and distributes profits and losses. The most common business structures are sole proprietorships, general partnerships, limited liability companies (LLC), and corporations.

Due to the benefits of having limited liability protection, an LLC is deemed as the ideal choice to structure a small business. Many business owners use third-party services to handle LLC formation documents and applications so you don’t have to.

Step 2: Obtain an EIN

An Employer Identification Number (EIN) is a unique nine-digit number assigned by the Internal Revenue Service (IRS) to businesses. It’s used for tax reporting purposes and is required for a business entity that has employees, operates as a corporation or partnership, or meets certain IRS criteria.

Think of the EIN as a Social Security Number for your business. To obtain an EIN, you can apply directly through the IRS via online, by mail, or by phone. The process is free, and once the application is completed, you will get your EIN.

Step 3: Apply for Licenses and Permits

The next thing you need to do after choosing the right structure for your business and applying for your EIN is to get the licenses and permits that will allow you to run your business legally in your area and industry.

• Local Licenses: Different cities or counties may have different requirements and regulations for businesses, so you should contact your local city clerk or county recorder to find out what licenses or permits you need for your business
• Statewide Licenses: While most states do not require businesses to hold a general business license to operate in the state, there are some exceptions such as Washington DC and Nevada. However, even in states where this general requirement isn’t present, there are many licenses that are commonly required at a state level. For example, a seller’s permit is required from any business that sells taxable goods and services. Many professions are also regulated with specific licenses businesses must obtain from the relevant state board
• Federal Licenses: The federal government does not require licenses for general business operations, but some businesses that are regulated by the government, such as those that deal with agriculture, drilling, nuclear energy, radio and broadcasting, fishing, firearms, and alcohol sales, may need to get extra federal licenses or permits

Note: To find out what types of business licenses you need, head on over to the Small Business Administration’s (SBA) Apply for Licenses and Permits section.

Step 4: Renewal of Licenses and Permits

Once you get your general business license, you need to renew it periodically, usually every one to two years. To renew, businesses will need to pay a fee, submit updated information or documents and continue to comply with certain regulations and standards that keep your license or permit valid.

While you can conduct your own research or hire a business attorney if you’re unsure of regulatory requirements of renewing, it’s becoming increasingly popular to use third-party services that take care of the whole process of applying for and renewing licenses at an affordable price.