All states, as well as municipalities and counties, regulate businesses. These governments usually require individuals and businesses who sell goods and services to have one or more business licenses or permits, depending on the types of items offered for sale. If you want to open a business, check with your local city hall to find out what kind of permits you need.
Licenses and Permits
Business licenses and permits give you the right to operate a business and to do business with either the public or other businesses. In some areas, you may be required to hold only one basic business license, or you may be required to hold multiple licenses and permits, each addressing one aspect of your business. For example, if you open a restaurant, you may be required to hold a business license, a resale license and permits from both the health department and the fire marshal.
Many states, counties and cities charge taxes on the sales of goods and, in some cases, services. If you want to do business in these areas, you must obtain what is often called a "resale license" from the government authorities that collect sales tax. The resale license serves two purposes: the first gives you the ability to purchase stock and other items for your business without having to pay sales tax on those items. The second gives you an account with the tax authority or authorities that allow you to collect sales tax from your customers.
Some types of goods and services come under special regulation and you may need to apply for special permits to sell them. For example, in some areas, you may need a special permit to sell live animals, food, liquor or weapons. Such licenses or permits may require you to submit to a lengthy application process, which might even require a background check.
Finding out what licenses and permits you need to run a business can be difficult, particularly if you have to deal with regulators at different levels of government. A good place to start is city hall. Ask the clerk for information on getting a business started. Your public library may also have information on local and state business requirements. Be prepared to talk to more than one government officer about your business permit needs.
Lainie Petersen lives in Chicago and is a full-time freelance writer. She has a long career in business and media and focuses her writing on business, legal, and personal finance issues. She holds a master's degree in library and information science from Dominican University.