How to Get a Business License in 2026: Steps and Costs

Quick answer: To get a business license, identify every agency that regulates your activity (federal, state, county and city), choose your business structure and name, get an EIN, then apply to each agency online or in person and pay its fee. Most small businesses need a local business license plus a state sales tax permit; regulated trades also need a professional license.

Working out how to get a business license is confusing because there is no single license in the United States. Instead, you collect the specific approvals your activity and location require. A home-based copywriter might need only a city registration, while a food truck needs a health permit, a fire inspection and a vending permit on top. This guide shows you how to find what applies to you, the order to apply in, what a business license costs, and how to keep licenses current. Once you are licensed, you can start billing with our free invoice generator and add license numbers to every invoice.

This is general information, not legal advice. Always confirm requirements with the agencies that issue them.

Federal, state and local: the three levels of licensing

The SBA guide to licenses and permits splits requirements into three levels. Most businesses deal with state and local only.

Federal licenses

You need a federal license only if a federal agency regulates your activity. The SBA lists examples including agriculture (USDA), alcohol (TTB), aviation (FAA), firearms and explosives (ATF), commercial fishing (NOAA Fisheries), broadcasting (FCC) and oversize or overweight vehicles (DOT, with permits issued by states). A typical freelancer or service business needs no federal license.

State licenses and registrations

States regulate a broader range of activities. Common state-level requirements include:

• Professional and occupational licenses: contractors, electricians, plumbers, cosmetologists, real estate agents, accountants, health practitioners and many more.
• Sales tax permit (seller's permit): needed if you sell taxable goods or services. Our guide to sales tax nexus explains when out-of-state sales trigger registration.
• Employer registrations: state withholding and unemployment insurance accounts once you hire.
• Entity registration: if you form an LLC or corporation. See how to start an LLC.

County and city licenses

The SBA notes that counties and cities often regulate activities such as construction, plumbing, restaurants, retail, dry cleaning and vending machines. Many cities also require a general business license or business tax registration from anyone operating within city limits, including home-based businesses. Zoning rules may require a home occupation permit if clients visit or you store stock at home.

How to get a business license: 8 steps

1. Define what you do and where. Write one sentence: "I install residential HVAC systems in Maricopa County" or "I sell handmade candles online from my apartment in Denver". Activity and location drive everything else.
2. Choose your structure and name. Licenses are issued to a legal person or entity, so settle on sole proprietor, LLC or corporation first, and register a DBA if you trade under another name. See what a DBA is.
3. Get an EIN. Many applications ask for one, and it is free from the IRS. Follow our guide on how to get an EIN.
4. Check federal requirements. Compare your activity with the SBA's federal list. If nothing matches, move on.
5. Check state requirements. Start with your Secretary of State and state licensing board websites, and your state revenue department for sales tax.
6. Check county and city requirements. Search your city's business licensing page and your county clerk's site. Call the city if your activity is unusual; clerks get these questions daily.
7. Apply and pay. Submit each application with supporting documents: ID, entity documents, EIN, proof of insurance or bonding, exam results and lease or zoning approval where required.
8. Record license numbers and renewal dates. The SBA notes some licenses expire. Put every renewal date in your calendar with a reminder 60 days before.

Common licenses by business type

Business type	Typical licenses and permits	Usually issued by
Freelance writer, designer or consultant	General business license or tax registration	City or county
Online store selling physical goods	Sales tax permit, local business license, home occupation permit	State revenue department, city
Electrician, plumber, HVAC	State or local trade license, contractor registration, permits per job	State licensing board, city building department
Cleaning or lawn care	Local business license; sales tax permit in states that tax these services	City or county, state
Home bakery or food business	Cottage food registration or health permit, food handler card	State or county health department
Salon or barber	Individual cosmetology license, establishment license	State board of cosmetology
Brewery or liquor retail	Federal TTB permit, state and local alcohol licenses	TTB, state ABC board

Industry-specific invoicing tips are in our guides for electricians and cleaning services.

What does a business license cost?

The SBA does not publish fees because they vary by business activity, issuing agency, location and government rules. As a rule of thumb, as of 2026:

• General city or county licenses are usually the cheapest item, typically a flat annual fee, though some cities scale the fee with gross receipts or headcount.
• State sales tax permits are free or low cost in many states, though some require a security deposit for higher-risk sellers.
• Professional and trade licenses cost the most once you include exams, background checks, surety bonds, required insurance and continuing education.
• Permits such as health or building permits are charged per inspection, location or job.

Worked example: budgeting licenses for a mobile detailing business

Andre is starting a mobile car detailing business as a single-member LLC. He lists every approval he needs and phones each office to get the current fee. Using the figures he was quoted (illustrative, not national averages), his budget looks like this:

Item	Agency	Fee quoted
City business license (annual)	City	$75
Home occupation permit (no customers on site)	City planning	$50
State sales tax permit	State revenue department	$0
Stormwater discharge approval for mobile washing	County environmental office	$120
First-year licensing total		$245

$75 + $50 + $0 + $120 = $245. If the city charged its license fee as 0.1% of gross receipts instead, and Andre billed $60,000 in his first year, that line would be $60,000 x 0.001 = $60. Either way, he adds the license cost to his overheads before setting prices, and builds it into his small business budget.

License numbers on invoices and estimates

Many states require licensed contractors to show their license number on contracts, estimates and invoices, and in advertising. Even where it is not required, a license number reassures clients and speeds up approval in procurement departments. Put it in the business details block under your name, alongside your contact details and, where relevant, your sales tax permit number.

Keep your licensing tidy in your paperwork:

• Show the license number on estimates, contracts and invoices.
• Charge sales tax only once you hold a permit; use the sales tax calculator for the amount.
• Number invoices consistently with the invoice number generator; auditors and licensing boards may ask for records.
• Choose a clean layout, such as the classic invoice template, with room for license and permit numbers.

Documents to gather before you apply

Applications go faster when everything is ready in one folder. Most agencies ask for some combination of the following:

• Owner identification: a government ID for each owner, and sometimes a Social Security number for background checks.
• Entity documents: approved articles of organization or incorporation, your operating agreement or bylaws, and any DBA certificate.
• Tax identifiers: your EIN confirmation letter and, once issued, your state sales tax permit number.
• Location proof: a lease, property deed or home occupation approval showing you can operate at the address.
• Qualification evidence: exam results, education transcripts or proof of experience for professional and trade licenses.
• Insurance and bonds: certificates of general liability or workers' compensation insurance, and surety bonds where a licensing board requires them.
• Inspection approvals: fire, health or building inspection sign-offs for premises-based businesses.

Scan everything as PDF and keep the license certificates themselves in the same folder once issued. Some licenses must also be displayed physically at your place of business or carried in a work vehicle. Keep digital copies handy too, because commercial clients and online marketplaces increasingly ask for license and insurance certificates before they will approve you as a vendor.

Special cases: home-based, online and multi-city businesses

Home-based businesses

Working from home does not exempt you from licensing. Many cities still expect a general business license, and zoning rules may limit customer visits, signage, employees working on site, parking and storage of equipment or stock. A home occupation permit is the usual way to confirm you comply. If you rent, check your lease and any homeowners association rules too, as they can be stricter than the city's.

Online and remote businesses

Selling online does not move your business onto the internet for licensing purposes: you are licensed where you are physically based. Sales tax is the exception that reaches further. Once your sales into another state pass that state's economic nexus threshold, you may need to register and collect tax there, even with no physical presence. Track sales by destination state from your invoices so you can see when a threshold is getting close.

Several cities or service areas

A contractor or mobile service working across several cities may need a license in each city where work is performed, not only where the business is based. Some states have reciprocity arrangements for trade licenses, but most local registrations do not transfer. List every city you regularly work in and check each one; a single job outside your home city can trigger a requirement.

Hiring your first employee

Your first hire adds registrations rather than licenses: state income tax withholding, state unemployment insurance and, in most states, workers' compensation coverage. Set these up before the first payday, not after it.

Renewals and staying compliant

Licenses are not a one-time task. Typical ongoing obligations include annual city renewals, professional license renewals with continuing education, updating the agency when you move or change your business name, and filing sales tax returns on schedule even when you owe nothing. If a renewal fee depends on last year's gross receipts, your invoice tracker becomes the source for that number.

If you are starting part time, read hobby vs business: once you are trying to make a profit, licensing and tax rules generally apply even if the business is small.

Start invoicing as a licensed business

Now you know how to get a business license: map your activity against federal, state and local rules, apply to each agency, and track renewals. With licenses in hand, open the invoice generator, add your license and permit numbers to your business details, and send compliant invoices from day one. The user guide shows where each field goes. Every invoice exports as a PDF, so it looks the same on your client's phone, laptop or printer.