To answer the question: How much does a business license cost in Texas? You must first ask 2 others:
Does your business need a license?
And if so, which one?
We ask which one because Texas doesn’t implement a general business license, so there isn’t a fixed cost. Instead, you must apply for separate business licenses (and often permits) relative to your niche and location. Costs depend on what you do and where you operate.
That can be confusing, and trading without the appropriate license is illegal.
Fear not, though, because this post untangles the Texas web of business license requirements so you know which you need, where to apply, and how much they cost.
Does Texas require a state business license?
Texas doesn’t have a one-size-fits-all state general license, but when starting your business, you might need several permits and licenses at the federal, state, and local levels, including municipal and occupational licenses, a sales and use tax permit, a resale certificate, or an environmental permit relative to your location and business type.
Do you need a general business license in Texas?
Many Texas cities and counties have their own license and permit requirements for certain activities, and the Lone Star State regulates some occupations and not others, so you must apply for the licenses (and permits) relevant to your business from the correct government department.
Texas doesn’t have a general business license. Registering your LLC with the Secretary of State (learn how to register an LLC in Texas), or an assumed name with the county clerk for a sole proprietor, serves the same purpose. Your Certificate of Formation shows your Secretary of State file number. It isn’t a tax ID: your federal EIN comes from the IRS, and a Texas taxpayer number comes from the Comptroller.
Once you’re registered, you can apply for a sales and use tax permit and give suppliers a resale certificate.
Texas general business registration costs:
- Sole proprietorships and general partnerships: No state registration. If you use an assumed name, file it with your county clerk (fees vary by county).
- Limited Liability Partnership: $200 per partner
- Limited liability company: $300 (Certificate of Formation)
- Corporation: $300
See our Texas LLC cost guide for the full list of state fees.
Check out the Texas Business Licenses and Permits Guide from the Governor’s Business Permit Office for further information on general business license requirements.
Now, let’s look at the licenses specific to your location and niche:
The costs of the different types of business licenses in Texas
Municipal business license
Cities and counties issue various local licenses and permits depending on your industry; for simplicity’s sake, I’ll refer to them as municipal licenses.
Of these, 2 types exist.
- General business license: Many Texas cities don’t issue a general business license, but some require registration or permits for certain activities. Check with your city hall or county clerk’s office.
- Industry-specific license: Most Texas locations have industry-specific business licenses or permits relative to your industry.
For example, food truck operators and restaurant owners need an industry-specific food handling permit. For entrepreneurs leasing or purchasing real estate, zoning permits apply.
Note:
Entrepreneurs operating in multiple cities or counties might need separate local licenses or permits for each location.
How much does a Texas Municipal business license cost?
Fees vary. Ask your city or local county clerk’s office for its fees.
Texas occupational license
An occupational license (also called licensure) is a government regulation that requires specific professions and vocations to meet minimum requirements (like education, experience, and competence) to operate in their profession.
These include business activities that expose people to potential hazards or require extensive training and include:
- Architects and engineers
- Accountants
- Building contractors
- Barbers and cosmetologists
- Construction-related occupations
- Insurance agents
- Lawyers
- Medical professionals
- Private investigators
- Other security services
- Real estate brokers, sales agents
For example:
A Texas real estate sales agent license application costs $185 with the Texas Real Estate Commission, before the cost of the required courses and exam.
You can learn more about Texas occupational license requirements and costs on the following government websites:
- Texas Commission on Environmental Quality: Occupational Licensing, Permits, and Registrations.
- Texas Department of Licensing and Regulation, which licenses many trades and professions.
Texas sales tax permit
Sales tax is a percentage that most US states add to specific products and services.
Businesses that sell taxable goods or services in Texas, including out-of-state (foreign) LLCs, must get a sales and use tax permit from the Texas Comptroller and collect sales tax. The state rate is 6.25%, and local taxes can add up to 2%.
Use the Texas Online Tax Registration Application guide to see whether you need a sales and use tax permit and how to apply.
For more sales and use tax information, read these resources:
- Sales and Use Tax: How to register and report Texas sales and use tax
- Sales and Use Tax: Popular FAQs
- Sales Tax Permit Requirements
How much does a Texas sales tax permit cost?
Texas does not charge for a sales tax permit, though the Comptroller may require a security bond.
Texas resale certificate
If you buy items to resell, you can give your supplier a Texas resale certificate (Form 01-339) so you don’t pay sales tax on those purchases. You need a sales and use tax permit to issue one.
Read the Texas Comptroller Resale Certificates FAQs to learn more about a resale certificate and how to get one.
How much does a Texas resale certificate cost?
Resale certificates are free in Texas.
Texas environmental permits
Entrepreneurs who own businesses that could negatively affect the environment need permits from the Texas Commission on Environmental Quality (TCEQ), such as a Texas Pollutant Discharge Elimination System (TPDES) permit.
How much do Texas environmental permits cost?
For a complete list of Texas environmental permits and fees, visit the Texas Commission on Environmental Quality website.
Federal business license requirement
Let’s finish with federal license requirements and costs.
Businesses operating in federally regulated sectors need a federal license or permit.
Those sectors include:
- Aviation
- Agriculture
- Alcoholic beverages
- Commercial fisheries
- Fish and wildlife
- Maritime transportation
- General transportation and logistics
- Mining and drilling
- Firearms, explosives, and ammunition
- Nuclear energy
- Radio and television broadcasting
Entrepreneurs operating in a federally regulated sector must apply for a license from the agency relative to the activity. For example, agricultural businesses would contact the U.S. Department of Agriculture.
For further information on Federal business license fees, visit the Small Business Administration website.
How to get a business license in Texas
Fortunately, getting a Texas business license is the simple part of this endeavor. Once you know which licenses and permits you need and the relevant agency, you only need to file your application and pay the fee.
However, you’ll likely need to provide the following information:
- Social Security Number (SSN) or Federal Employer Identification Number (FEIN)
- Business activity description
- Registered business name or fictitious name (DBA)
- Registered business address and contact information
- All business owner’s contact information
- Business sales tax number (if you have one)
- Business start date
- Number of employees
- Expected annual sales
How to find the licenses your business needs:
- Texas Department of Licensing and Regulation website: Lists all regulated industries with license application services.
- Texas Business Licenses and Permits Guide: the state’s guide to licenses by business type.
How much is a Texas business license?
As we now know, you may as well ask, How long is a piece of string? Because the cost of a business license depends on which license you need and where you operate.
Conclusion
Remember, you get the answer to the question ‘How much does a business license cost in Texas’ by answering the following 4 questions:
- The type of business you are starting: Does it need specific licenses or permits to operate? (Like a food handling certificate or a retail license).
- Your Texas location: Are there municipal requirements? (Such as a local business license).
- A sales and use tax permit: Will you sell or provide taxable products and services?
- And your industry licensing regulations: Does your business require an occupational or federal license? (Like an agricultural license or Alcohol sales permit).
Once you answer those and apply to the correct local, state, and federal departments, you’ll know how much your business license will cost in Texas and can add it to your Texas startup costs. Tailor Brands can help you file the licenses and permits your business needs.
FAQ
Texas doesn’t require a general business license. Most businesses still need to register (an LLC with the Secretary of State, or an assumed name with the county clerk), and many need specific licenses or permits for their industry or city.
It depends on what business you want to start. You can learn all about small business expenses that apply to any US state in our small business start-up costs post.
No. An LLC refers to a specific business structure that provides its members with liability protection. In contrast, a business license allows you to operate in a particular Texas municipality.
It depends on the business they are in. For example, a sole proprietor that sells taxable goods needs a sales and use tax permit. To buy items for resale without paying sales tax, they can also give suppliers a resale certificate.
You apply to the relevant local authority or government agency for most business licenses and permits. However, suppose you start a legal entity (like an LLC in Texas) by registering with the Texas Secretary of State’s office but don’t need specific licenses or permits. In that case, your Secretary of State filing serves the purpose of a general business license, since Texas doesn’t issue one.