How To Get A Business License In Texas In 2024

Texas is one of the best states to start and run a business^[1] because of its low costs and excellent economic climate. If you are starting a business in the state, you will need at least one kind of business license.^[2] This is a government-issued document that proves your new business is legally allowed to operate in this state. It can be an operating license that allows you to sell specific products.

Most cities and counties in Texas require a business operating license and some additional or separate specialized licenses for certain types of businesses. While states require licenses at the state level, entrepreneurs can obtain business licenses at the city or local level. This article provides information and resources to get federal, state, and local, state licenses and permits for your business.

How To Get A Business License In Texas? 

If you have an existing business, find out if your business structure requires a license. There is no statewide license requirement, though you may need to apply for specific licenses and permits if your business requires a specific license. States require at least one type of business license when planning to conduct business there. Obtaining a Texas business license^] varies depending on your state, city, or county government. 

Business Name & Form Your Company

Before obtaining a Texas business license, the first step is to have your business affairs in order. If you haven’t started a business, you will need to form your company where you file with the Texas Secretary of State.

You will need to file a business name, an EIN, or SSN if you are a sole proprietor, a business entity type, a business address, and a phone number to form a legal structure. You also need to write a business plan that includes anticipated revenue and expenses. These are the best registered agents in Texas, who can help you get the business license faster.

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Apply For Your Texas Business License Online

Texas’s most common business license is from local governments, known as a general license. This is a business-friendly state that doesn’t require a state-issued general license. Many cities and counties in Texas don’t require a general business license. Rather than a general license, Texas requires businesses to get a sales use and tax permit. You will need a tax permit in TX if you sell the property within the state, lease or rent property, or sell taxable services. 

Either apply for a Texas business license online or by mail. Visit the Texas Comptroller’s website and apply for a permit without paying a fee. The Texas Department of Licensing and Regulation is the appropriate regulatory agency that allows applying for a Texas business license online. Texas’s only state-level permit or license is the sales tax for a permit or seller’s permit.

Determine Which Other Local Licenses May Be Applicable

Some additional licenses or permits from your local government are needed to operate a business in Texas. While you won’t be required to get a state-based license, you may still need to get licensed depending on your service or the product you sell. Texas makes it easy to locate your business and determine which websites you need to visit to get licensed. 

The type of business license depends on your location and business activity. For instance, the city of San Antonio, TX, requires sole proprietorships to get a peddler’s license if they sell items door-to-door or in public spaces. You can check with your local city or county government office to determine which other license applies to you. 

Apply For Additional Statewide Texas Business Licenses

In the fourth step, apply for the sales and use tax permit if you want to rent or sell a property or taxable services. You will need a seller’s permit to operate a business in the state of Texas. This is the only state-level permit or license that applies to people engaged in business in Texas, those who intend to sell or lease tangible personal property, or those intending to sell taxable services. 

All Texas-based businesses must get sales use and tax permits, including. At the Texas business permits office, you’ll see a guide that provides a comprehensive list of permits and licenses. The Texas Department of Licensing and Regulatory website has information on some statewide professional business licenses. 

Apply For Federal Licenses And Tax Treatment

Lastly, apply for federal licenses and tax treatment as required. You can get Texas business licenses by applying with the Texas Department of Licensing and Regulation. Most small businesses don’t need a federal license or permit. However, if your business activities are regulated by the Federal Government, you’ll need to apply for federal licenses and permits with the appropriate Texas department. 

The most common businesses controlled at the federal level include agriculture, aviation, nuclear energy, transportation, alcohol sales, mining, maritime transportation, commercial fisheries, and radio broadcasting.

Types Of Business Licenses In Texas

A business license refers to a license and permit your business needs to obtain from a city, county, state, or Federal Government before starting operations. Texas has three main licensing jurisdictions: federal, state, and local. The local business licenses, known as the general license, are the most common type of license you will get from your local government. 

Some cities may not require this general business license but will require specific licensing for specific kinds of businesses. For example, Dallas, TX, requires special licensing for traditionally considered immoral activity, such as alcoholic beverages or amusement centers. You also need to obtain an occupational tax certificate to function. 

Here are the common business licenses required in Texas:

• A business operating license
• A sales tax license – This license allows businesses to sell goods and services
• A liquor license if your business sales of distributes alcohol
• Specialty licenses such as legal counsel, accounting, massage therapy, or plumbing in some TX states.

If you operate several businesses, you may need to file for more than one business license. There are additional permits or licenses, such as occupancy permits, depending on your business. Other municipalities require a business to file for a signage permit before adding exterior advising. 

What You Should Prepare To Get A Texas Business License?

Business licensing requirements depend on your business activity and location. Every city or county has different licensing requirements. You will need to research if your business requires a specific license. 

The Texas Economic Development and Tourism Division has a website called Texas Wide Open that allows businesses to determine which Texas business license or permit they might need. Getting Texas business licenses can be a smooth process. You need an employer identification number to file for a business license, similar to having a social security number for a sole proprietorship.

Since each city or local county has different specific license regulations, visit your city or county clerk’s office website or their physical office to learn more about the licensing requirement. Even when running your business online, you still need to register your business and get the license. In some cities like Houston, TX, you will be required to hold a sales or use tax permit from the Texas government. 

How Much Does A Business License Cost In Texas?

There is no fee to pay in applying for a Texas sales tax permit or business license. However, if a municipality requires a standard business operating license or specialized license, you may pay between $15 and $30 on the low end. You will pay several hundred for the Texas business licenses on the high end.

In some states like Austin, TX, specialized licenses for amusement machines like arcades cost up to $50 per machine. Depending on the industry, state, or city, you will pay different fees to obtain a Texas business license. Check with your local area and identify how many licenses you need.

Final Thoughts

Opening a business in Texas can be daunting because you must keep it state-compliant. A big part of running the business is to obtain the permits and licenses needed to operate it legally within the state. Most businesses need licenses and permits depending on the location, industry, and activity. You may need to obtain a state, local, or federal license by applying with the Texas Department of Licensing and Regulation. 

Frequently Asked Questions (FAQs)