Licenses and permits are one of the most confusing parts of starting a business, mainly because there is no single answer. Requirements depend on what you do and where you do it, and they can come from several levels of government at once. A home-based writer may need nothing beyond a city registration, while someone preparing food, doing electrical work or offering health services may need several licenses. This section explains how the system fits together and how to find your own requirements reliably.
The layers
In the United States, requirements can come from:
- Federal agencies, for a limited set of regulated activities.
- States, which regulate many occupations and activities and issue tax registrations such as sales tax permits.
- Counties and cities, which often require general business licenses or registrations and enforce zoning.
- Special districts and agencies, such as health departments, for particular activities.
Each layer has its own rules, fees and renewal cycles. Meeting one does not satisfy the others.
Licenses, permits and registrations
The terms overlap. Broadly, a business license or registration allows you to operate a business in a jurisdiction; an occupational or professional license allows you to practise a regulated profession; and a permit authorises a particular activity, place or event. A home occupation permit, a health permit or a sign permit are examples. The guides use the issuing office's own terms where possible.
Working from home
Running a business from home does not exempt it from rules. Many cities have home occupation rules covering customer visits, signs, employees, parking, noise and storage. Leases and homeowners' association rules can add private restrictions. The working-alone guide on permits and zoning at home goes into this in detail.
Regulated occupations
Many trades and professions require a state license based on training, exams or experience. Examples commonly include electrical and plumbing work, many health and personal care services, and some financial and legal services. If your work is in a regulated field, the license is a precondition for working legally, not paperwork to handle later.
Sales tax and selling goods
If you sell goods, and in some states certain services, you may need to register to collect sales tax. That registration is usually handled by the state revenue department. Online sellers face additional rules about where tax applies. The guides point to the official sources to check.
A method, not a list
Because requirements vary so much, the most useful thing this section offers is a method:
- Describe your activity precisely, including where it happens.
- Check the federal list of regulated activities.
- Check your state's licensing portal and any occupational board.
- Check your county and city for business licenses and home rules.
- Record every finding, with the date and source.
When in doubt, ask the issuing office in writing. Their answer is the authority.
Keeping it current
Licenses expire, fees change and requirements are updated. A simple permits record with renewal dates, kept with your business documents, prevents lapses. Review it each year and whenever you add a service, move, or start working in a new area.
The guides in this section
The guides explain whether you need a business license, how home occupation permits work, how to register a business name, how sales tax registration works, and how to approach licensing for common activities. Start with the guide on whether you need a business license; it walks through the method above in detail.
Guides in this section
- Do I need a business license? A method for finding out where you live
Whether you need a business license depends on your activity and where you work. A step-by-step method to check federal, state, county and city rules.
- Home occupation permits: running a business from home legally
Home occupation permits: typical limits on visitors, employees, signs and storage, how to find your local rules and apply, and lease or HOA limits.
- Sales tax permits: when a small business needs one and how to apply
When a small business needs a sales tax permit: what is taxable, out-of-state sales after Wayfair, registering, collecting, filing and records.