What is a business license?

A business license is an official permit issued by a government agency that allows you to legally operate a business in a particular location. Depending on the state, county, or city, this license may be required at the state level, local level, or both.

Who needs a business license?

Almost all businesses, whether you’re selling goods online, running a food truck, or opening a retail store, need some form of business license. If you form an LLC or incorporate your business, there’s a chance you need to obtain business licenses and permits. Requirements vary widely based on:

• Your business location (state and municipality)
• Your industry (e.g., restaurants, salons, construction, etc.)
• Whether your business is home-based or brick-and-mortar

What affects the cost of a business license?

The price of a business license depends on several factors:

• State vs. local requirements: Some states have flat fees, while others leave it up to counties or cities.
• Industry or profession: Highly regulated fields (like healthcare or alcohol sales) may cost more.
• Business size or revenue: Some places calculate fees based on projected revenue or number of employees.
• License type: General business licenses are cheaper than specialized permits.

Business license fees by state

Below is a snapshot of general business license fees for each state. These are base-level fees for standard business licenses, note that local jurisdictions may charge additional fees. 

State	State License Required?	Fee Range	Renewal	Notes
Alabama	Yes	$10 – $500	Annual (Varies)	Varies by city/county and business type
Alaska	Yes	$50 annually	Annual ($50)	State license required for all businesses
Arizona	No (local only)	Varies	Local (Varies)	License issued at city/town level
Arkansas	No (local only)	Varies	Local (Varies)	Check with local authorities
California	No (local only)	$50 – $500+	Annual (Local)	Local business license mandatory
Colorado	No (local only)	Varies	Annual (Varies)	State sales tax license required
Connecticut	No (local only)	Varies	Local (Varies)	Licenses issued by towns
Delaware	Yes	$75+	Annual ($75+)	Statewide license required
Florida	No (local only)	Varies	Annual (Local)	Known as a Business Tax Receipt
Georgia	No (local only)	$50 – $400	Annual (Local)	Issued by city or county
Hawaii	Yes	$20 – $50	Annual ($20–$50)	General Excise Tax license required
Idaho	No (local only)	Varies	Local (Varies)	State sales tax permit may be needed
Illinois	No (local only)	$50 – $100+	Annual (Local)	Depends on municipality
Indiana	No (local only)	Varies	Local (Varies)	Check local government offices
Iowa	No (local only)	Varies	Local (Varies)	Some cities require licensing
Kansas	No (local only)	Varies	Local (Varies)	License required at city/county level
Kentucky	No (local only)	$50 – $100+	Annual (Local)	Varies by city/county
Louisiana	Yes	$50 – $300+	Annual (Varies)	Includes sales tax registration
Maine	No (local only)	Varies	Local (Varies)	Licenses typically issued locally
Maryland	Yes	$15 – $150	Annual ($15–$150)	Most businesses need trader’s license
Massachusetts	No (local only)	Varies	Local (Varies)	Check with local clerk’s office
Michigan	No (local only)	Varies	Local (Varies)	Some industries require state licenses
Minnesota	No (local only)	$0 – $100+	Annual (Local)	Certain professions need licensing
Mississippi	No (local only)	Varies	Local (Varies)	Check local jurisdictions
Missouri	No (local only)	Varies	Annual (Local)	City-level licenses required
Montana	No (local only)	Varies	Local (Varies)	No general business license required
Nebraska	No (local only)	Varies	Local (Varies)	Check city/county rules
Nevada	Yes	$200 annually	Annual ($200)	State business license mandatory
New Hampshire	No	Varies	Local (Varies)	Some localities may require permits
New Jersey	No (local only)	Varies	Local (Varies)	Check with local business office
New Mexico	Yes	$35 – $50	Annual ($35–$50)	Gross Receipts Tax license required
New York	No (local only)	Varies	Annual (Local)	City/county license required
North Carolina	No (local only)	Varies	Local (Varies)	Some cities require licenses
North Dakota	No (local only)	Varies	Annual (Varies)	Sales tax permit needed
Ohio	No (local only)	$25 – $100+	Annual (Local)	Depends on local jurisdiction
Oklahoma	No (local only)	$25 – $100	Annual (Local)	State-level licenses for some trades
Oregon	No (local only)	$50 – $150+	Annual (Local)	Depends on city
Pennsylvania	No (local only)	$50 – $300+	Annual (Local)	Philadelphia and others require it
Rhode Island	Yes	$10 – $200	Annual ($10–$200)	Based on business type
South Carolina	No (local only)	$25 – $300+	Annual (Local)	Local licenses required
South Dakota	Yes	$50	Annual ($50)	Business tax license required
Tennessee	Yes	$15 – $100	Annual ($15–$100)	Includes business tax registration
Texas	No (local only)	$15 – $300+	Annual (Local)	Sales tax permit required by state
Utah	Yes	$22 – $100	Annual ($22–$100)	Renewed annually
Vermont	Yes	$125	Annual ($125)	Required for most businesses
Virginia	No (local only)	$50 – $200+	Annual (Local)	BPOL license required
Washington	Yes	$90	Annual ($90)	Required for most businesses
West Virginia	Yes	$30 – $100	Annual ($30–$100)	Register with State Tax Dept
Wisconsin	No (local only)	Varies	Annual (Varies)	Sales tax permit often needed
Wyoming	No (local only)	Varies	Local (Varies)	Check with city or county office

Business License Renewal Requirements and Costs

Most business licenses must be renewed regularly—typically every year—although some states or municipalities offer multi-year licenses. Here are the most common renewal practices to be aware of:

• Renewal frequency: Most states and cities require annual renewal. A few offer biennial (every two years) or even one-time lifetime licenses depending on the business type.
• Renewal fees: Usually similar to the original licensing cost, ranging from $15 to several hundred dollars depending on the location and business structure.
• Late penalties: Failing to renew on time can result in late fees, business suspension, or the need to reapply from scratch.
• Updates required: Some states require you to confirm or update business information (e.g., address, ownership) during renewal.

To stay compliant, mark your calendar and check your local government’s licensing division for renewal timelines.

Final Thoughts

Business licenses may seem like just another formality, but they’re a crucial step in making your business legal and official. Whether your fee is $50 or $500, it’s a small price to pay for staying compliant and avoiding penalties down the line.

Always double-check with your local government or Secretary of State’s office for the most accurate and up-to-date information based on your business type and location. If you need help to get a business license, we can assist you in the process – check out our business license and permits service.

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