If you run a business, you might need a license, permit, or certificate of some kind in order to operate. And you might even need more than one of these documents, depending upon the work that you do. If that’s the case, you certainly aren’t alone, as many businesses have to apply for licenses or permits from local, state, and federal governments.
What are the types of business licenses out there, as well as the requirements associated with them? This article should help clear up some of your questions. Just keep in mind that, while we’ve made every effort to ensure the information below is up-to-date and accurate, it doesn’t constitute legal advice, and it isn’t a substitute for legal advice. If you have specific questions about your particular business, contact your attorney for guidance.
The Basics on Federal Licenses and Permits
For most small businesses, the federal government doesn’t require licenses or permits. But there are certain types of activities that are regulated by one or more federal agencies, and those activities might require a federal license or permit.
What are the types of business activities that 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
So, if you’re involved in any federally regulated activity, the next step would be 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.
As an example, if your business is involved with aviation, you’d be regulated by the Federal Aviation Administration, so 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.
What About Florida State Requirements?
There are a few states in which all businesses need to obtain state business licenses, in addition to any local licenses required. Those states include Alabama, Alaska, Delaware, Ohio, Nevada, and Washington State.
Florida doesn’t have a license requirement for all businesses across the state. However, just like all other states, it does have license and/or certification requirements for an array of business activities and occupations that require extensive training or that expose consumers to potential hazards. Those include:
- Medical professionals
- Building contractors and other construction related occupations
- Barbers and cosmetologists
- Architects and engineers
- Real estate brokers and salespersons, and
- Private investigators and other security services
Let’s use an example here to clarify: If you want to work as an architect in Florida, you’ll need to get a license from the Florida Board of Architecture and Interior Design. Makes sense, right?
Most Florida business licenses are issued by the Florida Department of Business and Professional Regulation. If you want to look through a comprehensive list of all of the occupations that are regulated by the DBPR, click here. The Department of Agriculture and Consumer Services also licenses certain occupations.
Note: The procedures for getting your business license will vary from one occupation to the next. You might have to meet specific educational or training requirements, or you might need experience in the field. You might even have to take a written exam and pass it before getting your license. And, as you might have guessed, there is a license fee that you’ll need to pay as well.
Do you really need to worry about getting your Florida business license?
Yes! In the event that the state discovers that you’re working in an occupation without a required license, a host of bad things can happen. 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 as well. So going through the proper steps to get your license before you start conducting business is always a wise move.
What About Local Licenses?
Let’s say that you aren’t required to get a federal license or a state license. You might think that you’re in the clear. Think again. There’s a strong chance that you’ll need to get a local business license.
Almost all Florida counties require businesses to obtain a license before doing business in the county. This requirement applies to all businesses, including one-person, home-based operations. This general business license is confusingly called a “business tax receipt.” You obtain the license by registering with the county tax collector.
In addition, many Florida cities require businesses to obtain a local business tax receipt, in addition to the business tax receipt issued by the county. So, if your business is located within a city limits, you may have to register with your city, as well as with the county tax collector. Check with the city government where your business is located. If you have an office in more than one city or county, you might need to get a license for each one.
You have to pay a fee to get a business tax receipt. Fees will vary by locality and the nature and size of your business. They could range from as low as $25 to as high as a few hundred dollars. You must renew the license and pay the fee every year.
The good news is that getting your local license is pretty easy. Basically, your city and/or county has a website that will explain its requirements to get a business tax receipt. You can find searchable links to all Florida county tax collectors here.
You usually 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.
What will you need to provide when submitting an application for a county and/or local business tax receipt? Well, you’ll likely be asked for the following information:
- Social Security Number or Federal Employment Identification Number
- A description of your business activities
- Your legal business name and any fictitious name or “dba”
- Your business start date
- The number of employees and your expected annual sales
- Your business address and contact information,
- Each business owner’s contact information
- Your business sales tax number, if any
- Your industry code under the North American Industrial Classification System (NAICS)
- Evidence you have all needed professional or commercial certifications or licenses for your occupation or business
After submitting your application, you’ll usually receive your business tax receipt within a few weeks in the mail, or you may be able to download it from your county or city website. Once you have it in your possession, you might be required to post it at your place of business.
Do you really need to worry about getting your business tax receipt?
Yes! It’s true that a lot of self-employed individuals, particularly those who work from home, never get a local business license. But if your county or city government were to find out that you’re running an unlicensed business, you might be fined, and you might even be prevented from doing business until you obtain the business tax receipt. So it’s always best to avoid problems by researching the license(s) you need and applying for them so you can do business without having to worry.
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.