Business license guide: what small sellers need and where

Business license requirements vary by state, county and city, and by what you sell. This is general information. Check with the offices where you live and where you sell before you open.

A business license is permission from a government, usually your city or county, to operate a business in its area. Many small sellers need one, but it’s rarely the only piece of paper. A food truck or market stall might also need a seller’s permit, a health permit, a DBA and a temporary event permit. This guide explains what each one is, who issues it and how to find out what applies to you.

What is a business license?

A general business license, sometimes called a business tax certificate or business registration, records that you run a business in a particular place. Cities and counties use it to keep track of local businesses, check zoning and, in many places, collect a local business tax. It doesn’t say you’re qualified to do anything in particular. That’s the job of other licenses and permits.

There is no single national business license. The US Small Business Administration’s guide to licenses and permits explains that federal licenses are only needed for specific regulated activities, such as alcohol, firearms or agriculture, while the licenses you need from your state, county or city depend on your business activities and location.

Business license vs seller’s permit vs DBA vs health permit

These four get mixed up constantly. They do different jobs and usually come from different offices.

Seller’s permit

If you sell taxable goods in a state with sales tax, you’ll usually need to register with the state before your first sale. Names vary: seller’s permit, sales tax permit, sales and use tax license. It’s separate from the city business license, and you can need both. Our guide to sales tax for small business covers registering, collecting and filing.

DBA

If you sell under a name that isn’t your own legal name or your registered company name, many places require you to register it as a DBA, also called an assumed name or fictitious business name. The SBA notes that a DBA doesn’t provide legal protection for the name by itself, but you may need one to open a business bank account in that name. If you’re still choosing a name, see our business name ideas.

Health permit

Anyone selling food to the public generally deals with the local health department. That can mean a permit for the business or vehicle, inspections, and food safety training for you and your staff. Our guide to the food handlers permit covers the training side.

Who issues business licenses?

Expect to deal with several levels of government:

• City: the general business license if you’re inside city limits, plus zoning and sometimes sidewalk or vending permits.
• County: the business license if you’re in an unincorporated area, often DBA filings, and usually the health department.
• State: sales tax registration, business entity registration if you form an LLC or corporation, and professional or occupational licenses for regulated trades.
• Federal: only for specific regulated activities. Most shops, carts and makers don’t need a federal license, though you may need an EIN from the IRS for taxes and hiring.

If you sell in more than one city or county, each one may want its own license. A food truck that works three towns can end up with three local licenses.

What different sellers typically need

These are common patterns. Your local rules decide the real list.

Market stalls and craft fair sellers

• A state seller’s permit if you sell taxable goods
• A business license from your home city or county, and sometimes from the city where the market is held
• A temporary vendor or special event permit for some events
• A health or temporary food permit if you sell food or drink
• The market’s own vendor application, insurance and fees, which are separate from government permits

See our guides on selling at a farmers market and craft fair booth ideas for the practical side.

Food trucks and coffee carts

• A business license in each city or county where you operate
• A mobile food facility or vehicle health permit, often with an inspection
• Food handler cards for staff and a food manager certification where required
• A commissary or base of operations agreement in many areas
• Fire safety inspection if you cook with propane or open flame
• Parking or street vending permits, and zoning limits on where you can set up
• A seller’s permit, since prepared food is often taxable

Home-based sellers

• A business license or home occupation permit from your city or county
• A check of zoning rules. The SBA notes zoning ordinances can apply even to home-based businesses, for things like customer visits, signs and deliveries.
• A seller’s permit if you sell taxable goods, including online
• For homemade food, your state’s cottage food rules, which often limit what you can make and where you can sell
• HOA or lease rules, which aren’t government permits but can still stop you

How to find your business license requirements

1. Start with the SBA. The SBA licenses and permits page explains federal requirements and links to state resources.
2. Search your city and county websites. Look for “business license,” “business tax certificate” or “vendor permit.” Many cities have a small business portal or a one-stop checklist.
3. Call the health department if you sell any food or drink, before you buy equipment or a truck.
4. Check your state revenue department for sales tax registration.
5. Ask event organizers what permits they require from vendors and which ones they handle for the whole event.
6. Talk to your local Small Business Development Center or SCORE chapter if you get stuck. Both offer free help.

Put everything in one list: the document, who issued it, the number, the expiry date and the cost. You’ll want it for your business plan, for vendor applications and when an inspector asks.

Renewals and keeping licenses current

Most business licenses aren’t one-time. Many renew every year, some on your anniversary date and some on a fixed date for everyone. Health permits often renew yearly and may need a new inspection. The SBA points out that it’s often easier to renew a license than to apply for a new one, so don’t let one lapse.

• Put every renewal date in your calendar with a reminder a month ahead.
• Update your license if you move, change your name or business structure, or add a new kind of product.
• Some cities base the renewal fee on last year’s gross receipts, so keep clean sales records.
• Keep copies, digital and paper, where you sell. Some events and health departments require you to post them.

Temporary event permits

Festivals, fairs, pop-ups and holiday markets often need a temporary permit on top of your regular license. Common ones include a temporary food facility permit from the health department, a special event vendor permit from the city, and sometimes a fire permit for cooking. Deadlines can be weeks before the event, and some organizers file a group permit for all vendors. Ask early, and keep the permit at your booth.

How SleepingFire helps once you’re licensed

SleepingFire doesn’t issue or track licenses and can’t tell you which ones you need. What it does is handle the selling once you’re set up: ringing up cash, card on your own reader, gift card and split payments, tracking stock, and producing reports like a daily Z-report and a sales tax summary CSV, which help when a renewal asks for gross receipts or when you file sales tax. It runs in the browser on a phone, tablet or computer with a data connection. See how it works for food trucks.

Frequently asked questions