How to Get a Business License in Texas

Depending on the products or services your business sells, you may be required to have a Texas business license. After choosing your business structure and naming your company, the next step in starting a business in Texas is determining whether you need a business license and how to apply for it.

Here’s what to know about getting a business license in Texas.

What is a business license in Texas?

Texas does not require a general business license to conduct business in the state. However, all businesses in Texas must register with the Texas Secretary of State or their local county clerk. A business’s certificate of formation from the Texas Secretary of State or an assumed name certificate from a county clerk’s office can fulfill the general business license requirement found in other states. 

Types of business licenses

In Texas, the type of business you have determines the local, state, or federal business licenses or permits you will need to obtain. 

Local business licenses and permits

Texas cities and counties may require businesses to obtain licenses or permits on the local level in order to sell products or services or engage in activities such as building or remodeling storefront property. 

For example, the city of McKinney, Texas, requires businesses to acquire a license from the Texas Alcoholic Beverage Commission (TABC) as well as a local permit from the McKinney City Secretary Office in order to sell alcohol. Businesses that sell alcohol without a city-level alcohol permit can be fined up to $200.

State business licenses and permits

Businesses in certain industries may also be required to obtain licenses from state agencies before they can operate.  

For instance, a company that provides pest control services must apply for a commercial business license with the Structural Pest Control Service (SPCS) via the Texas Department of Agriculture (and pay a $300 fee and any applicable service fees) before they can advertise their services or do business in Texas. The license serves as proof that the company has required insurance and is in good standing. 

Texas sales use and tax permit

Businesses that sell or lease tangible personal property or sell taxable services (such as amusement, cable TV, data processing, debt collection, telephone answering, and telecommunication services) in Texas must obtain a Texas sales and use tax permit. 

The permit enables businesses to register for the following types of taxes:

• Sales and use tax
• 911 surcharge and fees
• Sales tax surcharge on diesel equipment

Federal business licenses and permits

You may need to obtain a federal license or permit if your business is engaged in certain federally regulated activities, such as selling alcohol, mining or drilling, or radio or television broadcasting.

Steps to apply for a business license in Texas

While many businesses in Texas are required to register for a sales and use tax permit, local, state, and federal business license requirements depend on your business type and location. 

Here’s how to apply for local, state, and federal business licenses and obtain a Texas sales tax permit.

Step 1. Contact your local government

Business licensing requirements in Texas vary by jurisdiction. You can contact the county clerk or city government office where your business is located to find out whether you need to get a local license for your particular business activities.

Step 2. Research state requirements online

The Texas Business Licenses and Permits guide lists over 300 business types and the corresponding state agencies that may require licenses or permits. Look for your business category to find out if you need to get a business license through a state authority. 

State agencies typically allow businesses to apply for licenses online and may provide the option to mail in a paper application. Keep in mind that if you submit a paper application, you may have to wait longer to receive your business license than you would if you applied online. 

Step 3. Apply for a Texas sales and use tax permit

Businesses in Texas that sell or lease personal property or sell taxable services in Texas are required to apply for a Texas sales and use tax permit.

To apply for the permit, you will need your Social Security number. If your business is a partnership, you will also need the Social Security numbers or federal employer’s identification numbers (EINs) of each of your partners. If you have a corporation, you will need the Social Security numbers of each of the corporation’s directors or officers. 

You will also need the file number your business was assigned by the Texas Secretary of State and your business’ North American Industrial Classification Sys. (NAICS) code.

You can apply for the sales tax permit online by creating an account on the Texas Comptroller’s website. You should receive the permit within 2-3 weeks of submitting your application.

Step 4. Apply for federal licenses

If your business is engaged in federally regulated business activities, you will need to apply for a permit with the relevant federal agency. 

Here are some common types of business activities subject to federal regulation and the federal agencies you can contact to find out more about required licenses or permits:
 

• Agriculture: U.S. Department of Agriculture
• Alcoholic beverages: Alcohol and Tobacco Tax and Trade Bureau
• Aviation: Federal Aviation Administration (FAA)
• Firearms, ammunition, and explosives: Bureau of Alcohol, Tobacco, Firearms and Explosives
• Fish and wildlife: U.S. Fish and Wildlife Service
• Commercial fisheries: National Oceanic and Atmospheric Administration Fisheries Service
• Maritime transportation: Federal Maritime Commission
• Mining and drilling: Bureau of Safety and Environmental Enforcement
• Nuclear energy: U.S. Nuclear Regulatory Commission

Radio and television broadcasting: Federal Communications Commission (FCC)

How much does a business license cost in Texas?

The cost of a business license in Texas depends on the type of licenses you need and your location. 

For instance, businesses that manufacture, distribute, or sell alcohol in Texas need to obtain a license from the TABC. Two-year TABC licensing fees range from $30 for a Water Park Permit to $10,000 for a Consumer Delivery Permit. These fees are on top of any fees individual cities may charge for local business licenses, although the TABC does set fee maximums (ranging from $30 to $1,875, depending on the license or permit type) for local alcohol licenses. There is no fee to apply for an alcohol permit with the federal Alcohol and Tobacco Tax and Trade Bureau.

There is no fee for a Texas sales and use tax permit, although you may be required to pay a security bond. 

How to search for a Texas business license

You can search for Texas business licenses by using the Texas Department of Licensing and Regulation’s (TDLR) free license data search tool.

The license search tool enables you to look up licenses using any of the following criteria:
 

• License type 
• License number
• License expiration date
• Individual’s name or business name
• City
• County
• ZIP code

Once you get your search results, you can click on a business’ license number to view more details, including the name and location of the business, whether the license is active, and the license number, type, expiration date, and original issue date.  

Additionally, the TDLR maintains an Administrative Orders search tool that allows users to search for sanctions and/or administrative penalties that licensed businesses have incurred for breaking the TDLR’s rules. 

You can also search for business licenses through various licensing agencies’ websites. For instance, the Texas State Board of Public Accountancy provides a searchable database of individual licensees that shows the license expiration date and status in the search results. 

Do I need a business license in Texas?

Whether you need a business license in Texas depends on the nature of your business and your location. 

All Texas businesses that sell or lease tangible personal property or sell taxable services and are engaged in business in Texas will need to get a Texas sales and use permit. 

Depending on your business activities, you may also need to obtain business licenses or permits from local, state, and federal agencies.   

Business entities that may need a business license in Texas include the following:

• Home-based businesses
• Sole proprietors
• Limited liability companies (LLCs)
• Partnerships
• Corporations

Maintaining your business license in Texas

The steps you need to take to maintain your business license in Texas depend on the license type.

Texas sales and use tax permit holders must take the following measures:

• Post the permit at their place of business
• Collect sales tax on taxable sales
• Pay sales and use tax on taxable purchases
• Report and pay sales and use taxes on time
• Maintain accurate records
• File a sales and use tax return even if your business has no taxable sales or purchases

You may need to renew your business license with the appropriate local, state, or federal licensing authority before its expiration date. 

For instance, electrical contractors in Texas must maintain a required minimum amount of business liability insurance and renew their business license (and pay a renewal fee) annually to remain in good standing.

Consider setting a reminder in your calendar of important business license expiration and renewal dates to avoid potential penalties for late renewal. 

FAQs

How long does it take to get a business license in Texas?

The length of time it takes to get a business license can depend on a variety of factors, including whether you apply online or submit a paper application via the mail and the individual licensing agency’s average processing time.

For example, the standard processing time for a federal alcohol permit from the U.S. Department of the Treasury’s Alcohol and Tobacco Tax and Trade Bureau is 75 days.

Do I need a business license to operate a small business in Texas?

You will need a Texas sales and use tax permit if you sell or lease tangible personal property or sell taxable services in Texas. You may also need to obtain business licenses or permits from your city, county, or state, depending on your location and business type. 

If your business engages in federally regulated business activities, you will need to get a license or permit from the applicable federal agency.  

Can I apply for a business license online in Texas?

Many city, county, and state agencies allow you to apply for a business license online. 

How do I look up a business license in Texas?

You can look up a business license in Texas by using the TDLR’s free license search tool. 

How often do I need to renew my business license in Texas?

How frequently you need to renew a business license in Texas depends on your license type. If you have a local business license, check with your city or county government office to find out about renewal dates. If you have a business license through a state or federal agency, you can contact the agency for license renewal details. 

What happens if I don’t get a business license in Texas?

If you don’t get a required business license in Texas you may be subject to fines or may be prohibited from operating your business. 

In addition to getting a business license, you may need to meet other requirements to stay legally compliant. Check out the Stay Legally Compliant guide by the Small Business Administration for more information. 

Are there different business licenses for different cities in Texas?

Yes, there are different business licenses for different cities in Texas. Some cities may require certain categories of businesses to procure local business licenses, while others may not. 

Is a business license the same as a sales tax permit in Texas?

No, a sales tax permit is not the same thing as a general business license in Texas. Many Texas businesses are required to get a sales tax and use permit in order to sell goods and services and collect sales tax on their taxable sales. 

Depending on their business type and location, many small business owners must apply for local licenses and/or state or federal business licenses before engaging in specific business activities.