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State Legal Requirements For Starting a Small Business

State Licenses, Permits, Registrations, and Filings


Each state has its own unique set of laws and guidelines for starting a small business. Places to find specific information about your own state's requirements include:

State Tax Agency: All for-profit business owners need to contact the state's Department of Revenue, Treasury Department, and/or Franchise Tax Board.

If you're engaging in retail sales, you will also need to obtain a sales tax license. This license allows you to collect sales tax and is required by most wholesalers before you can purchase goods at wholesale cost.

Some states require nonprofits to apply for special tax-exemption from the state and will not accept an IRS tax-exempt ruling. If you do not register as tax-exempt in your state you will need to pay taxes as a for-profit business.

Secretary of State: All corporations must register with a secretary of state. Where and how you do business affects what state you should seek incorporation from.

Many businesses used to incorporate in Delaware because it was once the easiest state to file for incorporation. But it is best to incorporate where your business headquarters are located, or in the state where you will conduct most of your business.

Business.gov: Your state may require a business license for tax purposes and to regulate how you are permitted to conduct your business. State licenses are frequently required for many professions and trades including contractors, medical professionals, accountants, real estate agents, private security guards, and cosmetologists. You can find you state's licensing requirements on Business.gov, or Google "business license requirements" and the name of your state.

State Department of Labor: Information for all business that have one or more employees.

Special Licenses for Retailers: If you plan to sell liquor, lottery tickets, gasoline, or firearms, you will probably need a special license from your state. Each state has licensing boards that are usually broken down by industry. To find your state's licensing boards visit your state's main government website.

Find a Small Business Development Center: Small Business Administration (SBA) Small Business Development Centers (SBDCs) are scattered throughout the United States. They can assist you in finding your own state's resources and contact information for state licenses and registrations.

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