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Starting a business is an exciting proposition. It can also be a bit confusing. After all, knowing what you need to do and not do as it relates to owning and operating your business in this state can be a bit murky if you aren’t a legal expert. Understandably, you want to get started on the right foot and learn how to properly set your business up for success.
Thankfully, at Tailor Brands, we can help you determine the specific type of licensing you will need to do business in Illinois. The following will tell you everything you need to know about this subject and more related to earning an income and owning a business in Illinois, including what a business license cost:
Do you need a business license in Illinois?
Illinois is unique when it comes to business licenses. Instead of offering a single statewide Illinois business license, like many other states, Illinois has a multi-layered process. This means that the type of business license you need will vary.
All businesses have to register with the Illinois Department of Revenue and obtain a Business Tax or IBT number. This is a de facto business registration that is required for paying and collecting state taxes, like sales tax. You also need to register with the Secretary of State as an LLC, nonprofit or LLP.
So, to answer the question, yes, in nearly all cases, you do need a business license to do business in Illinois. The type will vary, though, including both local city and county government agencies and permits, which is what we look at in more depth in the following information.
How much does a business license cost in Illinois?
Again, how much you will have to pay for your business license will vary since Illinois doesn’t have a set licensing amount, and overall general business license cost can differ widely depending on the state and type of business. For example, when you register with the Illinois Secretary of State, this is a fee of $75 annually along with an initial filing fee.
City-specific licensing will be another story altogether. This range is massive, from $75 to $6,000, with the more costly registration being in large cities like Chicago. Therefore, your fees will greatly depend on your business location, structure, and the specific permits and licenses that are required.
Types of business licenses in Illinois and their cost
The following is a breakdown of the types of business license and their cost in Illinois, for more specific information:
- City Business License: A city business license will vary based on the location. Fees can range from under $100 to several hundred or thousands of dollars. Applications can also include fees of $25, which are nonrefundable. You have to contact the specific city or municipality in which you want to do business to determine the amount you are expected to pay.
- County Business: There is no standard cost for county business registration. You do need an assumed name certificate and will need to register with the county clerk. This cost varies. As an example, Madison County has a fee of $31, and Cook County is $40, and is good for 2 years.
- State-Level Permits: When it comes to seller’s permits and professional licenses at the Illinois state level. A seller’s permit cost is $75 annually for retailers. Local permits will vary and range from that minimum cost up to $6,000.
- Federal License: Costs vary widely because there is no single federal license cost. It’s good to plan for multiple costs, including state registration, local permits, and federal licensing when starting a business.
Examples of different industries & different licenses they require in Illinois
The following is a quick breakdown of the type of industries and the various licenses they need to do business in Illinois:
Manufacturing: This includes food processing, fabricated metal products, electrical, and working on machinery. This requires a state manufacturing license, and industry-specific permits, such as food processing allowances.
Social Assistance/Healthcare: This includes therapy centers, clinics, and hospitals. State professional licenses are required as well as program certifications and facility permits.
Energy: Examples of this industry include renewable energy and power production. State energy production licensing and environmental permits are required.
Agriculture: Thisincludes food processing, agtech, and farms. Specific food processing permits and business licenses for sales along with state licensing for certain products are required.
Innovation and Technology: This includes quantum computing and software development, requiring a general business license and can include state permit requirements as well.
Professional Services: Examples of this industry include engineers, accountants, and lawyers. There are state professional license requirements for these professions.
Transportation and Logistics: This includes warehouse distribution and trucking businesses. State and federal operating authority and specific permits are needed to handle certain goods.
Renewing your business license in Illinois
Illinois allows businesses to renew their license either on an annual or biannual basis, which varies based on the municipality or specific city regulations. To determine what schedule you need to adhere to, it’s best to contact your local municipality. You should get an email indicating when the expiration of your Illinois business license is expected, usually about 60 days prior to it expiring. Renewal fees range from $30 to $75 or more.
Late fees and other penalties are associated with failing to renew your business license by the time it expires. Penalties can even result in you being put in “not in good standing.” If an LLC files late with the Illinois Secretary of State, penalties will include a $100 late fee and another $75 filing fee. Reinstatement of a dissolved LLC includes a $200 reinstatement filing fee. Other industry-specific fees for missing renewal deadlines could apply.
Conclusion
At Tailor Brands, we get it. Knowing what is involved in an Illinois business license cost can become overwhelming. Thankfully, if you are ready to start a business in Illinois and don’t know where to start, we are here for you. We can help you determine the type of licensing you need and direct you towards the agencies you need to register with in order to ensure you are operating your business legally and aboveboard in Illinois. This will also keep you from facing unexpected fees due to you simply not knowing you needed to register with certain agencies. Let us help you with the entire process. Contact us today to learn more.
FAQ
Yes, in most cases, you will need a business license in Illinois even if you are just selling online. You will need to register with the state in order to collect sales tax, which is usually called a seller’s permit, and then you also need to check with your local municipality for specific business license requirements.
To get a business license in Illinois, you have to register with the Illinois Secretary of State then register with the Illinois Department of Revenue. This process via mail takes between 6–8 weeks. It can be done faster online, sometimes only taking as little as a few days.
Getting a business license in Illinois usually takes less than 2 weeks if you are applying online. However, when doing it in person or mailing it to the Illinois Department of Revenue, it can take between 6–8 weeks. So, online or in-person, 1–2 weeks, online, 2 business days, in-person, same day, and mail, 6–8 weeks. Getting a tax account ID can be as quick as 2 business days, online, while in-person, you might even get it the same day.
Yes, even if you have an Illinois LLC, you likely still need a business license and permits related to your company. The requirements for your business license will vary based on your location and your industry.
No, an LLC or Limited Liability Company is a legal structure for your business. It doesn’t exempt your business from any specific licensing or permits you need to do business in Illinois. This means you still need to register with the state and get any local permits required by the municipalities where your business is located, not only obtain an LLC.
You can face penalties as well as temporary or permanent closure, fines, and have a future license declined if you fail to get a business license in Illinois and try to operate a business without one. You can also be held personally liable for business debts or damages done relating to your business. Therefore, it’s important to never operate a business in Illinois without a business license.
No, your business license will be approved by the government agency or local authority within a certain jurisdiction. You will also need to register your business with the IRS as well as with the Illinois Department of Revenue. This means that getting a business license is not the same as registering a business, but both are imperative.