New York Business License

Due to New York’s lack of a general business license at the state level, starting a new business in this state can often be quite a complicated process for entrepreneurs — particularly those launching their first venture.

This can make the path to legally running your business feel somewhat overwhelming because different cities and municipalities have their own unique rules. Some even demand specific licenses, depending on the nature and location of your business.

Our New York Business License guide aims to clarify the process of identifying which New York licenses or permits your business will need and the steps you must follow to legally establish your business within the state.

Do I Need a Business License in New York

Because New York State doesn’t offer a single, universal business license, you’ll need to get a specific set of licenses and permits that vary based on your business’s location and type.

Type of Business

Below, we’ve detailed common ways in which your business type can dictate the licenses you’ll be required to obtain, as well as specific examples of these:

• Sales Tax Permits: If you plan to sell physical goods or offer certain taxable services, your business will need to apply for a Sales Tax Certificate of Authority from the New York State Department of Taxation and Finance
• Professional Licenses: If you plan to launch a business in a professional industry like architecture, medicine, or engineering (among others), you’ll need to get the relevant license from the New York State Education Department, Office of the Professions
• Health Department Permits: If your business offers services that could impact the safety or well-being of the public, it may need to obtain one of these licenses. For example, business facilities with a swimming pool will need a “Bathing Establishment With Pool” permit from the New York City Department of Health and Mental Hygiene

However, this is not the only factor influencing the exact combination of licenses you’ll need — the location of your business within New York plays an important role as well.

Location

In this section, we’ve provided a succinct overview of the potential licenses and permits that your business may need due to local, state, and federal requirements:

• Local: Although there’s no general business license at the state level in New York, many cities have their own rules for business registration. For example, general vendors, pawnbrokers, and many types of businesses in New York City must apply for a license from the New York City Department of Consumer and Worker Protection (DCWP)
• State: You also may need to obtain a number of state-level licenses, depending on the nature of your business. Some of the most common ones include general vendor, liquor, and food permit licenses
• Federal: While most small businesses in New York are exempt from federal licenses or permits, businesses involved in sectors regulated by the federal government must obtain specific credentials. These sectors primarily include agriculture, alcoholic sales, and firearms, among others

Since the exact permits and licenses your business will need are entirely unique to your situation, you’ll have to conduct thorough research into your own local, state and federal regulations to smoothly launch your business.

Alternatively, many entrepreneurs opt to leverage the expertise of third-party services to handle this on their behalf.

How to Get a Business License in New York

In order to get your business license(s) in New York, you will need to complete the following steps:

• Form Your Business
• Obtain an Employer Identification Number (EIN)
• Apply for the Required Licenses and Permits

Let’s take a look at each step in more detail below.

Step 1: Form Your Business

Before setting out to obtain a business license in New York, it’s pivotal that you first choose an appropriate structure for your business. Sole proprietorships, general partnerships, and corporations are all common choices, however, it’s often seen as the most advantageous for small businesses in New York to form a Limited Liability Company (LLC). There are a few reasons why:

• Limited Liability: Members are protected from personal liability for business debts, safeguarding personal assets
• Tax Benefits: LLCs typically enjoy a pass-through tax treatment, avoiding double taxation that corporations are subjected to
• Management Flexibility: LLCs allow for flexibility in management structure, either being member-managed or manager-managed based on the preferences outlined in the certificate of formation
• Ease of Formation: With the New York Secretary of State providing forms that meet the minimum state law requirements and the option to file online, setting up an LLC is relatively straightforward

Many small business owners opt to avoid the tricky process of forming an LLC by instead leveraging the help of third-party LLC formation services.

Step 3: Apply for Licenses and Permits

After settling on the appropriate structure for your business and initiating the application for your EIN, the next step is to focus on securing the necessary licenses and permits to operate legally within your locale and industry.

• Local Licenses: Because each municipality will have its own set of regulations governing business registration, it’s important to research the specifics of the city in which you intend to launch your business
• Statewide Licenses: Your business likely will require a sales and use tax permit in addition to other state-specific licenses based on your business type. Fill out the application on the New York State Business Express website’s Business Wizard portal to get an idea of the specific licenses or permits you’ll need
• Federal Licenses: While the federal government doesn’t mandate licenses for general business operations, if your business falls under any government-regulated category, such as agriculture, fishing, firearms, and alcohol sales, it may be required to obtain an additional federal business license or permit

Note: If you plan to launch your business in New York City, you’ll need to use the NYC Business website to research the licenses your business will need. The New York Business Express site has an interactive tool that can help you find the required licenses for your location and niche.

Step 4: Renewal of Licenses and Permits

Many business licenses must be renewed every one to four years in order to keep them valid. If you’re uncertain whether you need to renew any of your business licenses, make sure to reach out to the agency that issued it for clarification.

Alternatively, due to how complicated each step of applying for and renewing New York business licenses is, you can choose to use a third-party service instead.

How Much is a Business License in New York

Because there’s no universal business license cost in New York, the cost of getting your business licensed can vary greatly, and will depend on the specific combination of licenses and permits you require.

All in all, it’ll be up to you as a business’s owner to undertake research and discover the exact licenses you need in order to operate legally.

Two of the most common permits New York businesses often require include sales tax certificates (i.e., to collect sales tax.) and professional licenses. While there’s no fee to acquire a sales tax certificate, the cost of a professional business license typically ranges from $50 to $150.

Ultimately, it’s difficult to provide an accurate estimate of the total cost to get a business licensed in New York State because this depends on the business’s nature and location. To get a better idea of the costs involved in obtaining the business licenses you’ll need, we recommend hiring an external service to do this research for you.