The cost of a business license in Texas varies. If your municipality requires a standard business operating license or a specialized license for the type of business you want to run, it will cost from $15 to $30.
Note that you will require specialized licensing for amusement machines (arcades, billiards, etc.) and this license usually costs about $15 to $50 per machine or pool table annually. Other “vice” businesses should expect high fees. For example, a dance hall in Dallas pays almost $2,500 for its initial zoning survey and $526 for a license annually.
Aside from the cost to obtain the license, you should also have a budget for the renewal of your license. In Texas, different agencies and municipalities handle business licensing on different renewal schedules but the majority require licenses to be renewed either annually or biennially.
You can contact the agency from which your business license was issued if you need further clarifications on their renewal requirements. In Texas, you will be required to apply for and obtain licenses before you legally operate a business.
Texas is one of the states that does not require or issue a generic business operating license at the state level. Though state regulatory agencies may issue specific licenses for certain kinds of businesses or professions, the only statewide licensing requirement applied to almost all businesses is the “sales use and tax permit” sometimes generically called a seller’s permit.
The type of business license you need to obtain from your local government is a general business operating license, often called a “business license” or a “general license.” Some Texas cities may not require a general business license but may require specific licensing for a particular business.
Cities like Dallas—require special licensing for business activities traditionally considered “vice” or “immoral” such as amusement centers, dance halls, alcohol bars, or sexually oriented activities. If you are still not clear, then, you have to check with your local, city, or county clerk to determine if you need a general business license or any special licensing for your business.
Step By Step Process to Get a Business License in Texas
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STEP ONE. Name and Form Your Company
When planning to get a business license in Texas, the first step is to name and form your company. Nobody will issue you a business license if you don’t have a name for your company. You are required to choose a business structure for your company and follow the process of registering it, which includes getting;
- A business name
- An EIN (Employer Identification Number) or SSN (if you’re a sole proprietor)
- A business entity type (LLC, partnership, corporation, etc.)
- A business address and phone number
- A business plan that includes anticipated revenue and expenses
- Certificate of insurance (COI) for your business insurance policy
STEP TWO: Apply for Your Texas Business License
Once you are done with naming and forming your company, the next step is to apply for your general business operating license. This type of license may or may not be required by your municipality hence, you have to check in with your city clerk or county recorder to determine what is needed.
STEP THREE: Determine Which Local Licenses Will Be Applicable In The Business
It is important to know that obtaining a business license is not all that is required to operate a business in Texas, hence you should ask to know if your business would require other licenses and permits. So, the third step is to determine if your business will need to obtain other local, specialized licenses or permits.
These may include specialized licenses for the sales of alcoholic beverages or for operating a coin-operated amusement center, or they may be permits from the health department for the sale of food or offering of accommodation.
STEP FOUR: Apply For Additional Statewide License(s) You Need
After getting all the licenses and permits required to operate your business, the fourth step is to apply for the sales and use tax permit on the Texas Comptroller website if you are renting or selling property or taxable (often tangible) goods or services.
You will also want to check out the Texas Business Licenses and Permits Guide to see if you are required to hold any other statewide license. You can apply for these at the Texas Department of Licensing and Regulation website.
Step FIVE. Apply For Federal Licenses and Tax Treatment (as Required)
The last step to obtaining a business license in Texas is to apply for federal licenses and tax treatment as required by your business.
Though the federal government does not issue licensing for general business operations, you may need to apply for licenses with specific government agencies depending on your business’s industry. The federal government requires permits for a number of industries, such as agriculture, fishing, firearms, alcohol sales, and transportation.
It is important to note that businesses are required to obtain a general license to operate in Texas cities, however, there may be differences in the rules or restrictions imposed by each municipality. For example, all businesses in Dallas must obtain a business license called an “occupational tax certificate.”
In San Antonio, only those businesses engaged in the sale of alcoholic beverages or that have coin-operated amusement machines must obtain a business license. Because each city or county has specific license regulations and the state regulates certain professions but not others, it is advisable for business owners to research what is required for their business.