Whether you have already launched your venture or are just researching how to start a business in New York, there are mandatory licenses and permits you might need. New York oversees business activity to keep the general public and others safe, and licensing is an essential component of the state’s oversight system. Many businesses operating within the state must be licensed.
What are licenses and permits?
Small businesses might need licenses and/or permits. Both are issued by government agencies and grant permissions, but there are subtle differences between the two.
Business licenses
Licenses generally grant businesses and people the ability to carry out actions otherwise prohibited. Only those who hold the license are allowed to carry out the action, and it’s expected that they adhere to any stipulations in how the action is carried out.
Business permits
Permits generally grant businesses and people the opportunity to conduct specific activities. Permits are often restricted to a place and/or time and are different from licenses in this way.
Driving example
Driving is one of the most common state licenses, and it’s illustrative of this difference.
A driver’s license grants someone the ability to operate a motor vehicle on New York’s public roads, and truck drivers might get a CDL-A license that allows them to operate the heaviest trucks. Before a licensed driver can take a truck on a specific road, however, the driver might need a permit that’s specific to the truck, road, and time frame.
How to register for licenses and permits
Licenses and permits are issued at all levels of government, and they’re issued by many government agencies.
Since each government and agency can issue licenses and permits, there isn’t one uniform way to apply for every license. There isn’t even one uniform list of all licenses that a business might need.
To ensure your small business is properly licensed, you must check with local, state, and federal agencies.
What happens if I fail to obtain a license?
Failing to obtain a required license from any government agency with jurisdiction can result in severe consequences.
Depending on the specific license you failed to obtain, your business could potentially face financial penalties, liability risks, and possibly even criminal penalties. Jail time isn’t unheard of for certain licenses, and the resulting fines and lawsuits can cost many thousands of dollars (or more).
Your business may also be ordered to stop operating until the issue is fixed. The shutdown could be permanent in select circumstances.
Even if the licensing infraction isn’t severe enough to cost thousands and shutter your business, any licensing issue can have negative consequences for your business. A short-term pause in operations is inconvenient and can negatively impact production, customers, and revenue. The violation also can carry smaller financial penalties that still must be paid.
Local business licenses
Both municipalities and counties may institute local business licensing requirements and almost all have permitting requirements.
Since each local government sets its own license and permit requirements, you should check with the local governments where your business operates to see whether any permits are required.
Check with local clerks
Municipalities of any size might have licensing and permitting requirements, and the best source for information on licenses is the local clerk.
Check with your city, town, or village clerk to see whether your business’s location or activities necessitate any licenses or permits. The clerk will also know how to apply for any required local permits (and they may personally handle your application).
If you’re unsure how to reach your local clerk, check the municipality’s website. The current clerk’s location, phone number, and name will likely be listed under “Departments” or a similar heading.
Check with the county you’re in
Counties can also set licensing and permitting requirements, and the best source for county-required permit information is the county clerk.
The New York State Association of Counties maintains a directory of county clerks, where you can find the name, address, phone, and fax of your county clerk. They’ll be able to inform you of any applicable permitting requirements.
Your county clerk probably also knows how to contact your local municipality clerk too, if you’ve had trouble finding that clerk’s information.
Common local licenses you might need
While local licensing and permitting requirements vary by municipality and county, many have requirements for:
- Building permits (e.g., for construction and renovation)
- Event permits (e.g., for public or major private events)
- Health permits (e.g., for food service)
- Zoning permits (e.g., for a business’s location)
There are many other activities that might require a business license or permit. Be sure to check with your local and county clerk to find out what permits are required where your business is located.
New York City business licenses
New York City uniquely maintains a long list of licenses that businesses operating in the city might be required to obtain. The list can be filtered by type of regulation, industry, and other criteria. You can check the list for any licenses that might apply to your business.
If you’ll operate under a brand name, you’ll also need to file a DBA in New York.
State business licenses
New York has no general state business license, but many businesses need at least one state license or registration, such as a sales tax Certificate of Authority.
Seller’s permit
Perhaps the most common state license or permit is the Seller’s Permit, which essentially functions as a license to sell tangible goods within the state. The permit is officially called a Certificate of Authority.
Your business will need a seller’s permit if the business intends to sell and/or lease products or provide taxable services subject to New York State sales tax. The permit essentially grants your business authority to collect and remit sales tax. Register at least 20 days before you start doing business. You need a certificate for each business location.
How to obtain a seller’s permit
You can apply for a Certificate of Authority (seller’s permit) online with the Department of Taxation and Finance.
- The provided instructions have a helpful checklist of what you’ll need to apply. You can also go through a printed copy of the questionnaire you’ll answer online.
- If you don’t already have a NY.gov business ID, create one, so you can access Business Express. New York Business Express is the state’s online business portal, which the Tax Department uses for Certificate of Authority applications. (You’ll need a business-specific NY.gov ID even if you already have a personal one.)
- Log into Business Express using your NY.gov ID, and you’ll be able to apply for a Certificate of Authority (seller’s permit).
- Complete the self-guided prompts, and submit your application. There is no fee to apply.
More information is available from the Department of Taxation and Finance if you need further details.
Seller’s permit fees & renewal
Certificates are issued for at least three years, and the Tax Department may require you to renew. It will notify you before your certificate expires.
When the time comes, you can apply for renewal through Business Express.
Selling without a Certificate of Authority can cost up to $500 for the first day and $200 for each day after, up to $10,000.
Other common state licenses
Many businesses need licenses in addition to the Certificate of Authority. For example, New York commonly requires businesses in the following industries to secure certain licenses:
- Real estate (e.g., brokers, agents, appraisers, home inspectors, etc.)
- Appearance enhancement (e.g., cosmetologists, nail artists, hair stylists, barbers, etc.)
- Security services (e.g., armored vehicles, private investigators, fire alarm installers, etc.)
- Miscellaneous (e.g., document shredding contractors, hearing aid businesses, pet cemeteries, etc.)
The Department of State has a sortable list of businesses that may need additional licenses. The list also details how to apply for each license listed.
The New York Office of the Professions oversees the many different professions that require a state license. However, these licenses are issued to individuals, so you’ll usually already hold the license your field requires. Some professions also require the business itself to register.
Federal business licenses
The federal government has its own licensing requirements for various businesses. Most federal business licenses are overseen by specific government agencies.
Are there mandatory federal licenses?
There isn’t any one federal license that every business in the United States must have. However, certain industries generally come with federal licensing requirements. Obtaining a federal license isn’t optional if your business is required to have one.
Common federal business licenses
You might need a federal business license if your business is in a regulated industry, such as agriculture, alcoholic beverages, aviation, firearms/ammunition/explosives, fish/wildlife, commercial fisheries, maritime transportation, mining/drilling, nuclear energy, television/radio broadcasting, and transportation/logistics. There are still other industries that have federal licensing requirements.
If your business falls into one of these industries, the best way to check licensing requirements is to contact the overseeing federal agency.
What do I need to file for a license?
Licensing filing requirements vary by government agency and license type. You usually must provide some basic business information (e.g., business name, location, member names, member addresses, industry, etc.), and many licenses have an associated fee.
For additional licensing requirements, including how to submit the proper form(s), you should contact the local, state, or federal agency providing the license.
Conclusion
If you’re starting or already have a small business in New York, be sure it has all the licenses and permits required. Check for local permits, New York business licenses, and federal licenses that you might need, and apply for any that are required.
And if you’re also exploring how to start an LLC in New York, many of the same state and local resources can help you navigate both the licensing and formation process with ease.