Starting a business in Oregon? One of the first and most crucial steps you’ll need to take is obtaining an Oregon business license.

This license is your ticket to legally operate within the state, and it’s a requirement you can’t afford to overlook. Our guide will walk you through the entire process—making it simple and straightforward. We break down the requirements, forms, and fees into easily digestible information, so you can focus on growing your business, not getting bogged down in paperwork.

Do I Need a Business License in Oregon

In Oregon, there’s no single, all-encompassing business license issued by the state. You’ll instead need to secure a variety of licenses and permits based on multiple factors, including 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:

• No Sales Tax in Oregon: Unlike many other states, Oregon doesn’t have a general sales tax. That means you won’t need a sales tax permit to sell most goods and services, such as clothing or electronics. However, certain cities may have their own taxes on specific items like lodging or meals
• Professional Licenses: If you plan to run a business in a regulated field like healthcare, law, or accounting, you’ll need a specialized license. For instance, certified public accountants (CPAs) must get a license from the Oregon Board of Accountancy
• Environmental Permits: If your business could affect the environment, you’ll likely need certain additional permits. The Oregon Department of Environmental Quality, for example, issues water pollution control facility permits for businesses that handle wastewater

However, this is not the only factor influencing the exact combination of licenses you’ll need — the location of your business within Oregon 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: Some cities in Oregon require you to have a local business license in order to operate. If you plan to set up shop in Portland, for instance, you’ll need to get a business license from the city of Portland specifically. Remember, requirements can vary significantly by locality
• State: Contrary to many states, Oregon doesn’t require a general sales tax permit because it doesn’t have a state sales tax. However, you may need other state-level permits or licenses based on your business type (e.g., an occupational license if you’re in healthcare, law, or a skilled trade)
• Federal: Most small businesses in Oregon don’t need federal licenses or permits. If you’re involved in industries regulated by the federal government (e.g., aviation, alcohol, or firearms), however, you’ll need the appropriate federal licenses or permits to operate legally

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 Oregon

In order to get your business license(s) in Oregon, 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 Oregon, 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 Oregon to register as a Limited Liability Company (LLC). Here are a few reasons for 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 the 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 Oregon 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 2: Obtain an EIN

The second step you’ll need to complete before applying for your business license is to obtain your EIN. This is a unique nine-digit number assigned by the Internal Revenue Service (IRS) to businesses in the United States so that their financial transactions can be identified and tracked.

An EIN is often necessitated when applying for various permits and licenses as it allows local and state governments to ensure your business is operating within the confines of the law. You can obtain it in a number of ways:

• Online: You can apply for your EIN on the IRS’s official website by using the EIN Assistant. You should be granted your EIN shortly after completing this application
• By Fax/Mail: After completing Form SS-4, you can apply for an EIN by submitting it to the IRS via mail or fax.
• By Phone: International applicants and businesses located outside US Territories are required to call the IRS at (267) 941-1099 to obtain their EIN — which they should receive during this call.

Note: If you are a sole proprietor, you will be able to use your Social Security Number (SSN) instead (as long as you do not have employees).

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: Start by contacting your local city or county office to find out the specific requirements for your locality. If you plan to open a restaurant in Eugene, for example, you may need a general business license as well as a food handling permit. Your local government website likely has a dedicated section for business permits and licenses to help you understand the local requirements
• Statewide Licenses: Oregon requires industry-specific licenses. For example, a construction company will need a license from the Oregon Construction Contractors Board. The Oregon Secretary of State’s website has a business license directory page that serves as a comprehensive resource for all state-level requirements
• 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 additional federal licenses or permits

Note: For the most accurate and localized information, visit your city’s or county’s government website.

Step 4: Renewal of Licenses and Permits

Many Oregon businesses must renew their licenses every two years. However, the specific renewal period can vary based on the city or county and the type of license.

If you’re uncertain whether you need to renew any of your business’s licenses, make sure to reach out to the agency that issued your business license for clarification.

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

How Much Is a Business License in Oregon

In Oregon, business license costs can vary widely due to the different types of licenses needed for companies operating in various industries. A food establishment license can range from $100 to $500 per year, for example, while a liquor license may cost nearly $1,000 annually. If your business involves construction, you might need a contractor’s license for which you’ll have to pay around $250 initially with biennial renewals.

Many Oregon cities and counties also have their own licensing requirements, which come with additional fees. For example, Portland has a business license tax. The fee for this can depend on your gross income, ranging from a minimum of $100 to a percentage of your business’s annual revenue.

It’s also essential to factor in any industry-specific licenses. Businesses in healthcare, finance, or legal services, for example, may require specialized permits that carry their own set of fees. These could range from a few hundred to several thousand dollars, depending on the complexity and risks associated with the profession.

Due to the wide range of potential licenses and associated costs, you should budget a few hundred to a couple of thousand dollars for business licensing in Oregon. To determine the exact fees involved for your specific business, consult Oregon’s governmental websites or hire a professional to help you navigate the regulatory landscape.