The state of Texas requires individual business licenses for a range of occupations. Each trade and profession has its license, renewal, and certification requirements. If your firm requires a special license, you’ll need to get the necessary training, qualifications, and licensing.
Because of its cheap company costs and great economic climate and development potential, Texas comes second on our list of top states for business. Launching a new firm might seem daunting even in the business-friendly Lone Star State. To establish a successful business, you don’t need an entrepreneurship degree; all you need is a willingness to work hard and accept the risk of failure—oh, and at least one type of business license.
Licensing to manage in the state and municipality where you’re conducting business is one of the most important components of beginning a new business. A business operating license is required in most Texas towns and counties, while some demand extra or separate specialized licenses for specific sorts of firms. The numerous processes required to secure all necessary and appropriate licenses might be hard or perplexing for new entrepreneurs, so we’ve produced a guide to help anyone take the next stages on their new company journey.
Is a Texas business license required?
Texas does not require or issue a general company operating license on a state level. While state regulatory bodies may grant certain companies or professions licenses, the “sales usage and tax permit,” often known as a seller’s permit, is the only real statewide licensing requirement that applies to practically all firms.
When Do They Require a Texas Business License?
Businesses in most Texas localities need to get a general license to operate, although each town may have different laws or limitations. For example, all firms in Dallas must get an “occupational tax certificate,” which is a type of company license. Only establishments that sell alcoholic drinks or have coin-operated amusement devices in San Antonio must get a business license.
We recommend that company owners explore what particular licenses may be necessary for their enterprises because each city or county has distinct specialized license rules. The state governs certain professions but not others. Go to the Business Permit Office’s Texas Business Licenses & Permits Guide or the Texas Department of Licensing and Regulation’s website. Visit the website or office of your city or county clerk to learn more about local business licensing.
Business License Types
To operate lawfully in Texas, practically all companies must first get a license or permission. It will be difficult to determine which licenses you’ll need to do business in your area or sector. Your type of business determines the particular licenses you need to apply for local, statewide, or federally.
Texas Local Business Licenses
A general business operating license, often known as a “business license” or a “general license,” is the most frequent business license you’ll require from your local government. Some Texas communities may not need a general business license but may do so for specific types of businesses. Many Texas communities, including Dallas, need special licenses for any commercial operations that are historically deemed “vice” or “immoral,” such as amusement parks, dance halls, alcoholic drinks, or “sexually oriented” activities. Determine whether you require a basic business license or any special licensing for your business activity by speaking to your local city or county clerk.
Permits for Additional Localities
When you start a business in Texas, the city or county may demand extra permissions or licenses. You may need occupancy permission or even file for a home occupation permit, depending on your business. You may need a building permit from the city or county planning department if you intend to conduct any new construction or improvements. Before installing any external advertising, certain towns may require you to get signage permission.
Additionally, if your company sells food or provides lodging, it may be subject to health department regulations. In addition to municipal permissions, you may need to seek a statewide permit for public accommodations or food service. Because none of these permissions is included in a business license, you should determine what permits you’ll need before starting a business.
Statewide Texas Licenses
If engaged in business in Texas and sell, lease, or rent property in Texas, or sell any taxable products or services within the state, all Texas-based enterprises must get a sales use and tax permit, also known as a seller’s permit. A sales usage and tax authorization are required for remote firms selling items or services in Texas. Visit the Texas Comptroller’s website to apply for this permit.
Certain businesses, such as electricians and HVAC maintenance, dieticians and massage therapists, polygraph examiners and weather modifiers, must additionally get licensure from the Texas Department of Licensing and Regulation (TDLR). To find out the specific licenses and permissions your company may need, visit the Business Permit Office’s Texas Business Licenses & Permits Guide or apply directly to the Texas Department of Licensing and Regulation website.
Federal Permits and Licenses
Most small companies do not require federal licenses or permits; nevertheless, you may be required to obtain one if you engage in any federally controlled activity. The federal government influences the following areas of business:
- Agriculture
- Alcoholic beverages are sold, served, distributed, or imported.
- Aviation
- Ammunition, firearms, and explosives
- Wildlife and fish
- Fisheries for profit
- Transportation via sea
- Drilling and mining
- Nuclear power
- Broadcasting on radio and television
- Transportation
The Procedure for Obtaining a Texas Business License
Step 1: Create a firm name and structure.
Putting your business affairs in order is the first step in acquiring any type of Texas business license. If you haven’t launched your business yet, you’ll need to do so before moving on to the next stage. Forbes Advisor provides some articles that might assist you in getting started, including advice on how to establish a business, register an LLC, and the best LLC services. When applying for a business license, you’ll need some, if not all, of the following information:
- A company name
- If you’re a sole owner, you’ll need an EIN (Employer Identification Number) or SSN (Sole Proprietorship Identification Number).
- A sort of corporate entity (LLC, partnership, corporation, etc.)
- A company address and telephone number
- A revenue and cost forecast is included in a company plan.
- Your company insurance policy’s certificate of insurance (COI) such as Texas errors and omissions insurance.
Step 2: Obtain a Texas business license.
The next step is to apply for a general business operating license. Your town may or may not require this form of license, so check with your city clerk or county recorder to see what is necessary. Visit the Texas Municipal League’s website to list all Texas municipalities and pertinent websites.
Step 3: Find out what additional local licenses could be appropriate.
The next stage is to establish whether your company need any additional local, specialized licenses or permissions. Specialized licenses for the sale of alcoholic drinks or the operation of a coin-operated entertainment centre are examples, as are health department permits for the sale of food or lodging.
Step 4: Obtain any extra statewide licenses you may require.
If you are leasing or selling any property or taxable (frequently physical) products or services, this step is to apply for a sales and use tax permit on the Texas Comptroller’s website. See the Texas Business Licenses & Permits Guide maintained by the Business Permit Office. Visit to learn if you need any other statewide licenses. You may apply for these on the Texas Department of Licensing and Regulation’s website.
Step 5: Obtain federal licenses and tax benefits (as necessary)
Although the federal government does not need licensing for ordinary company operations, you may need to apply for licenses with certain government authorities, depending on your industry. Agriculture, fishing, weapons, alcohol sales, and transportation are all activities that require permission from the federal government.
How Much Does a Texas Business License Cost?
The cost of a basic company operating license or a specialty license, depending on your municipality, can range from $15 to $30 on the low end to several hundred on the high end. Amusement machine (arcades, billiards, etc.) specialized license typically costs $15 to $50 per machine or pool table per year. Other “vice”-based enterprises might anticipate paying a lot of money. A dance hall in Dallas, for example, must spend about $2,500 for its initial zoning survey and $526 each year for a license.
Renew a Business License in Texas
Different Texas agencies and towns have different renewal dates for business licenses, but the bulk need licenses to be renewed yearly or biennially. Contact the agency that granted your company license if you’re not sure.
