For most small businesses, the federal government doesn’t require licenses or permits. But before you break out that happy dance, you should know that if you’re doing business in Texas you may need to get a state or local Texas business license.
It might sound daunting to figure all of that out, but we’ve got your back. Keep reading for a complete guide to getting a business license in Texas.
Federal Business License Requirements
What business activities are regulated by federal agencies and may require a federal license or permit?
- Alcoholic beverages
- Firearms, ammunition, and explosives
- Fish and wildlife
- Commercial fisheries
- Maritime transportation
- Mining and drilling
- Nuclear energy
- Radio and television broadcasting
- Transportation and logistics
If you’re involved in any federally regulated activity, the next step is to contact the federal agency that’s in charge of that activity. Find out what its requirements are and then follow through so that you can conduct business legally.
For example, if your business is involved with agriculture, you’d be regulated by the U.S. Department of Agriculture and that would be the place to go for more information.
Tip: You can access a list of all federally licensed activities, along with links to more information, by visiting this website maintained by the U.S. Small Business Administration.
State of Texas business license requirements
There are a few states where all businesses need to obtain state business licenses, in addition to any required local licenses. Those states are:
Rejoice! Texas doesn’t require you to obtain a state-wide Texas business license.
But, just like all other states, it does have license and/or certification requirements for business activities and occupations that require extensive training or expose consumers to potential hazards, including:
- Medical professionals
- Building contractors and other construction-related occupations
- Barbers and cosmetologists
- Insurance agents
- Architects and engineers
- Real estate brokers and sales agents, and
- Private investigators and other security services
For example: If you want to work as a real estate sales agent in Texas, you’ll need to get a license from the Texas Real Estate Commission.
To view a comprehensive list of all of the occupations that are regulated by Texas state agencies, and access their website, click here and scroll down to “Work.” You can also download a business permit guide here.
Just keep in mind that the procedures for getting your business license will vary by occupation. You might have to meet specific educational or training requirements or need experience in the field. Or you may have to take and pass a written exam. And, you’ll need to pay a licensing fee.
Do you really need to worry about getting a state business license in Texas?
In the event that the state discovers that you’re working in an occupation without a required Texas business license, all sorts of bad things can happen.
First, You’ll undoubtedly be ordered to stop doing business, for one thing. But you might also be fined and, depending upon your occupation, failure to obtain a license might even constitute a crime.
The bottom line? Taking the time to get the proper licenses for your profession can protect you in the long run.
Getting a local Texas business license
Let’s say that you aren’t required to get a federal or state license. Are you in the clear? Maybe, maybe not.
Most Texas cities and counties don’t require a local Texas business license or permit.
But there are exceptions. Each Texas city and county has its own licensing requirements, which vary based on the nature of your business.
If you’re conducting business within a city’s limits, check with your city clerk to determine its licensing requirements. If you’re in an unincorporated area, check with the county clerk. If you have an office in more than one city or county, you might need to get a license for each one.
You can find links to all Texas county clerk’s offices. These offices are where you’ll be able to find out if you need a Texas business license and search your county’s requirements.
How to get a business license in Texas
The good news is that getting a Texas business license is pretty easy. You’ll need to file an application and pay a license fee.
How much does it cost to get a business license in Texas? Fees vary by locality and could range from as low as $15 to as high as a few hundred dollars. Fees can also be based on your projected gross revenue (for example, 10 cents per $1,000 of projected revenue).
Once you know where to go, you might have the option of applying for your license online. Otherwise, you might be able to download an application and email it to the appropriate party or just mail it in.
You’ll likely be asked for the following information when you apply for a business license in Texas:
- Social Security Number or Federal Employment Identification Number
- Description of your business activities
- Legal business name and any assumed name or “dba”
- Business start date
- Number of employees and your expected annual sales
- Business address and contact information
- Each business owner’s contact information
- Business sales tax number, if any
After submitting your application, usually you’ll receive your Texas business license or certificate with a business license number within a few weeks in the mail. Once you have it in your possession, you may be required to post it at your place of business.
Finally, you’ll be required to renew your license periodically and that might involve an additional fee. Oftentimes, a renewal is required every one to three years, so be sure to mark your calendar so you don’t end up paying late fees.
Need Help? Let’s Talk!
Want to be sure you stay on top of all your business license requirements? When you sign up with Hyke we’ll support you and your business at every step, including when it comes to getting the appropriate Texas business license(s). Plus we’ll send you reminders when it’s time to renew your licenses, so you can focus on what you do best- running your business.
Stephen has dedicated his career as an attorney and author to writing useful, authoritative and recognized guides on taxes and business law for small businesses, entrepreneurs, independent contractors, and freelancers. He is the author of over 20 books and hundreds of articles and has been quoted in The New York Times, Wall Street Journal, Chicago Tribune, and many other publications. Among his books are Deduct It! Lower Your Small Business Taxes, Working with Independent Contractors, and Working for Yourself: Law and Taxes for Independent Contractors, Freelancers & Consultants.