Find out how to apply for a Texas business license. This article will help you get a business license in Texas and explain the costs involved.
Summary: Texas Business License
| The only state-level permit or license in Texas is the sales tax permit, also known as a seller’s permit.
You must obtain a sales tax permit if you:
Visit the Texas Comptroller website to obtain a sales tax permit. |
We have created a guide to help new entrepreneurs navigate the complex and confusing steps involved in obtaining all the necessary licenses.
Is a Business License Required in Texas?
Texas does not require, nor issue, a generic business license at the state level. Although state regulatory agencies might issue licenses specific to certain types of professions or businesses, the only statewide licensing requirement for nearly all businesses is the “sales tax and use permit”, also known as a seller’s permit.
What are the requirements for a Texas business license?
Businesses in Texas must obtain a general license for business operations. However, each municipality may have different rules and restrictions. Dallas, for example, requires all businesses to obtain an “occupational tax certification” (business license). San Antonio does not require any businesses that sell alcoholic beverages.
Each city and county have its own license regulations. The state may regulate certain professions, but not others. We encourage business owners to do some research on what is required for their particular businesses. You can find information about the required statewide licenses at the Texas Business Permit Office’s Texas Business Licenses & Permits guide, or go directly to the Texas Department of Licensing and Regulation website.
Visit your local clerk’s office or city website to learn more about licensing.
Types of business licenses
Nearly all Texas businesses must obtain a permit or license to operate legally in Texas. Identifying the licenses you need to do business in your area or industry can be hard. You will need the appropriate licenses for your business type, whether you apply at the local, state, or federal levels.
Texas Local Business Licenses
A general business operating license is the most common type of license that you will need from your local government. However, some Texas cities might require licensing for certain types of businesses. Texas cities like Dallas require special licensing for certain business activities that are considered “vice” and “immoral,” such as entertainment centers, dance halls, or sexually explicit activities. Check with the local clerk to determine whether you require a general or special license for your business activities.
Additional local permits
You may need additional licenses or permits from the county or city where you are opening a business in Texas. You may need an occupancy permit, or you might have to apply for a home occupation license depending on the location of your business.
A building permit may be required by the county planning department if you plan to do any renovations or new construction. Some municipalities may require your business to obtain a sign permit before adding any outside advertising.
Additionally, your business may need to comply with specific requirements from the health department if it serves food or offers accommodations. In addition to local permits, you may also need a state permit to provide public accommodation or food service. These permits are not part of a business license. You should investigate what permits you might need before you open a business.
Texas Statewide Licenses
Texas-based companies must obtain a sales tax and use permit. This permit is sometimes called a seller’s license. Remote businesses selling products or services in Texas will also need a sales permit. For more information, visit the Texas Comptroller webpage.
Certain professions require licensing by the Texas Department of Licensing & Regulation. For more information about the special licenses and permits that your business might need, visit the Texas Department of Licensing & Regulation website.
Federal Permits and Licenses
Most small businesses do not require permits or licenses from the federal government. However, you might need a federal license if your business involves any federally regulated activities. The federal government controls the majority of businesses.
- Agriculture
- Serving, distribution, or importing alcohol
- Aviation
- Explosives, ammunition, and firearms
- Wildlife and fish
- Commercial fisheries
- Transport maritime
- Drilling and mining
- Nuclear energy
- Broadcasting on radio and television
- Transport
Texas Business Tips
When you’re looking to form an LLC in Texas, conducting a Texas LLC name search is crucial to ensure that your desired business name is available and compliant with the state’s requirements.
Once you’ve confirmed name availability, you can proceed with the formation process and get your Texas business name registered.
Drafting a Texas LLC operating agreement is highly recommended to establish the internal rules and regulations of your LLC. You have the option to act as your own registered agent in Texas, handling the receipt of important legal and tax documents on behalf of your LLC.
The length of time to get an LLC in Texas may vary based on several factors, including the filing method and the workload of the Texas Secretary of State. It typically takes around 2-3 weeks for the formation documents to be processed and the LLC to be officially recognized.
As part of the process, you will need to obtain an Employer Identification Number (EIN) for your TExas business from the Internal Revenue Service (IRS). This unique identifier is necessary for tax purposes, opening bank accounts, and hiring employees.
Several online platforms and registered agents offer comprehensive LLC services, including name availability searches, document preparation, and filing assistance. Researching and selecting the best LLC services and registered agents in Texas can help streamline the formation process and ensure compliance with state regulations.
Additionally, depending on the nature of your business activities, you may need to acquire specific Texas business licenses at the state or local level. The cost to form an LLC in Texas typically includes filing fees and any additional expenses related to name reservation, certified copies, or expedited processing. The cost is the same even for a single-member LLC in Texas.
Lastly, if you ever decide to change your registered agent or dissolve and close your LLC in Texas, there are specific legal requirements and procedures that must be followed to formally terminate the entity.
Most Frequently Asked Questions
What types of business licenses are available?
The term “Business license” can refer to various licenses and permits that businesses must obtain from the state, city, or federal governments before they can start operating. These are the most popular types of business licenses:
- A business operating license sometimes referred to as a business license
- A sales tax license allows businesses to sell products and services.
- If your business sells, distributes, or trades in alcohol, you will need a liquor license
- Licenses for specialties, such as plumbing, accounting, massage therapy, or legal counsel, are available.
Who is required to get Texas business licenses?
A Texas sales tax permit is required for any company that offers taxable products or services. Businesses in specific places or professions could also need additional unique licenses or permits.
What is the cost of a Texas business license?
A Texas business license may be required by your county or city. It can cost between $15 and a few hundred dollars. Businesses that are “vice” (e.g., amusement centers, dance halls, or other sexually-oriented businesses) will be charged significantly more, between $500 and $1,000. The fee will vary depending on where you live.
To sell online, do I need a Texas business license?
Even if your business is run from a coffee shop on a laptop, you still need to register it at a physical address. If your physical location is in Texas or if you sell products in Texas from outside of Texas, you will need a Texas sales and use tax permit. If your physical location falls within a specific county or city, you may need to apply for local business operating licenses.
Is it possible to run a business in the absence of registering it?
Instead of creating a corporation or LLC, you can operate a business as a sole proprietorship or general partnership. Sole proprietorships and partnerships will still need to register DBAs with government agencies and get business licenses. Find out more about the differences between a sole proprietorship and an LLC.
What is a sales-use tax permit?
Any business that sells or rents property, services, or tangible goods in Texas must have a sales and use tax permit. This license allows businesses the ability to sell their products or services in-store or online and collect the appropriate sales taxes on any taxable goods.
Although a sales and use tax permit is sometimes called a business license, there are other types of licenses that you might need.
Steps to Obtaining Your Texas Business License
Step 1. Name and Form Your Business
Before you can apply for any type of Texas business license, it is important to have all your affairs in order. Before you can proceed with any other steps, it is important that you have all your affairs in order before you apply for any Texas business license.
We offer many articles that will help you get started. These include guides on starting a business, setting up an LLC, and best LLC services. This information is required to apply for a business license.
- Name of the business
- An EIN (Employer Identification Number) or SSN (Single Owner Number) is required if you are a sole proprietor.
- Type of business entity (LLC, partnership, or corporation)
- An address for your business and a phone number
- A business plan which includes expected revenue and expenses
- Certificate of insurance (COI), for your business insurance policy
Step 2. Apply for your Texas business license
Next, you will need to apply for your general operating license. The second step is to apply for your general business operating license. This type of license might not be required by your municipality. To find out, check with your county recorder or city clerk. Visit the Texas Municipal League website for a complete list of Texas municipalities and websites.
Step 3. Determine whether your business will require additional licenses or permits.
These licenses could be for the sale or operation of a coin-operated entertainment center or specialized licenses to sell alcoholic beverages. They may also include permits from the health department that allow the sale or offering of accommodation.
Step 4. Apply for Additional Permits and Licenses
If you rent or sell property, taxable goods, or services (often tangible), the fourth step is to apply online for the sales-use tax permit. To determine if any additional licenses are required in Texas, you can also check the Texas Business Licenses and Permits Guide. These licenses can be applied for at the Texas Department of Licensing and Regulation Website.
Step 5. Apply for Federal Licenses if Needed
The federal government doesn’t issue licenses for general business operations. However, depending on the industry of your business, you might need to apply for licenses at specific agencies. Many industries require permits, including agriculture, fishing, and firearms.
What is the Texas Business License Price?
The cost of a standard or specialized business operating license for your municipality can range from $15-30 to several hundred to several hundred.
Specialized licensing is required for amusement machines (arcades and billiards). A machine or pool table usually costs between $15 and $50 annually. Other businesses that are “vice”-based should expect to pay higher fees. A Dallas dance hall, for example, must pay almost $2,500 to get its first zoning survey done, and $526 per year for a license.
Texas Business License Renewal
There are many Texas municipalities and agencies that handle business licensing. However, most require that licenses be renewed annually or biennially. If you are unsure, contact the agency that issued the license.
