Jacqi is a seasoned legal professional committed to simplifying complex legal issues. With her in-depth knowledge of tax laws, she thrives on helping individuals and businesses navigate the maze of financial obligations. Clients trust Jacqi to provid.
Jacqueline Nguyen, Esq. Small Business and Tax Expert WriterJacqi is a seasoned legal professional committed to simplifying complex legal issues. With her in-depth knowledge of tax laws, she thrives on helping individuals and businesses navigate the maze of financial obligations. Clients trust Jacqi to provid.
Written By Jacqueline Nguyen, Esq. Small Business and Tax Expert WriterJacqi is a seasoned legal professional committed to simplifying complex legal issues. With her in-depth knowledge of tax laws, she thrives on helping individuals and businesses navigate the maze of financial obligations. Clients trust Jacqi to provid.
Jacqueline Nguyen, Esq. Small Business and Tax Expert WriterJacqi is a seasoned legal professional committed to simplifying complex legal issues. With her in-depth knowledge of tax laws, she thrives on helping individuals and businesses navigate the maze of financial obligations. Clients trust Jacqi to provid.
Small Business and Tax Expert Writer Chauncey Crail ContributorChauncey grew up on a farm in rural northern California. At 18 he ran away and saw the world with a backpack and a credit card, discovering that the true value of any point or mile is the experience it facilitates. He remains most at home on a tracto.
Chauncey Crail ContributorChauncey grew up on a farm in rural northern California. At 18 he ran away and saw the world with a backpack and a credit card, discovering that the true value of any point or mile is the experience it facilitates. He remains most at home on a tracto.
Written By Chauncey Crail ContributorChauncey grew up on a farm in rural northern California. At 18 he ran away and saw the world with a backpack and a credit card, discovering that the true value of any point or mile is the experience it facilitates. He remains most at home on a tracto.
Chauncey Crail ContributorChauncey grew up on a farm in rural northern California. At 18 he ran away and saw the world with a backpack and a credit card, discovering that the true value of any point or mile is the experience it facilitates. He remains most at home on a tracto.
Contributor Rob Watts Managing Editor, SMBWith over a decade of editorial experience, Rob Watts breaks down complex topics for small businesses that want to grow and succeed. His work has been featured in outlets such as Keypoint Intelligence, FitSmallBusiness and PCMag.
Rob Watts Managing Editor, SMBWith over a decade of editorial experience, Rob Watts breaks down complex topics for small businesses that want to grow and succeed. His work has been featured in outlets such as Keypoint Intelligence, FitSmallBusiness and PCMag.
Rob Watts Managing Editor, SMBWith over a decade of editorial experience, Rob Watts breaks down complex topics for small businesses that want to grow and succeed. His work has been featured in outlets such as Keypoint Intelligence, FitSmallBusiness and PCMag.
Rob Watts Managing Editor, SMBWith over a decade of editorial experience, Rob Watts breaks down complex topics for small businesses that want to grow and succeed. His work has been featured in outlets such as Keypoint Intelligence, FitSmallBusiness and PCMag.
| Managing Editor, SMB
Updated: Feb 13, 2024, 7:28pm
Editorial Note: We earn a commission from partner links on Forbes Advisor. Commissions do not affect our editors' opinions or evaluations.
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Texas ranks second on our list of best states for business because of its low business costs and excellent economic climate and growth prospects. But starting a new venture can seem difficult, even in the business-friendly Lone Star State. You don’t need a degree in entrepreneurship to start a successful business; you only need to be willing to work hard and take on the risk of failure—oh, and you probably need at least one kind of business license.
Texas does not require or issue a generic business operating license on the state level. While state regulatory agencies may issue specific licenses for certain kinds of businesses or professions, the only true statewide licensing requirement applied to nearly all businesses is the “sales use and tax permit” sometimes generically called a seller’s permit.
In most Texas cities, businesses are required to obtain a general license to operate, but 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 different specific license regulations and the state regulates certain professions but not others, we encourage business owners to research what specifically may be required for their businesses. For information on the appropriate statewide licenses, head to the Business Permit Office’s Texas Business Licenses & Permits Guide or directly to the Texas Department of Licensing and Regulation website. To find out more about local business licensing, visit your city or county clerk’s website or office.
In Texas, nearly all businesses are required to obtain some kind of license or permit to operate legally. It can be difficult to determine exactly which license(s) you may need to conduct business in your region or industry. The type of business you operate determines the specific licenses you need to apply for locally, on the state level or federally.
The most common type of business license you will need to obtain from your local government is a general business operating license, often called simply a “business license” or a “general license.” Some Texas cities may not require a general business license but may require specific licensing for specific kinds of business. For example, many Texas cities—such as Dallas—require special licensing for any business activities traditionally considered “vice” or “immoral” such as amusement centers, dance halls, alcoholic beverages or “sexually oriented” activities. Check with your local city or county clerk to determine if you need a general business license or any special licensing for your business activities.
There may also be additional permits or licenses required by the city or county when you start a business in Texas. It might be necessary to have an occupancy permit or even to apply for a home occupation permit depending on where your business is located. If you are planning on doing any new construction or renovations, you may need a building permit from the city or county planning department. Some municipalities might require your business to get a signage permit before adding any exterior advertising.
Furthermore, if your business serves food or provides accommodations, it may be subject to specific health department requirements. You may need to obtain a statewide permit for public accommodations or food service in addition to local permits. Neither of these permits is part of a business license, so you should research what permits, if any, you may need before opening a business.
All Texas-based businesses are required to obtain a sales use and tax permit, sometimes known as a seller’s permit, if engaged in business in Texas and sell, lease or rent property in Texas or sell any taxable goods or services within the state. Remote businesses that sell products or services in Texas must also obtain a sales use and tax permit. To apply for this permit, head to the Texas Comptroller website.
Businesses engaged in certain professions, including everything from electricians to HVAC repair, dieticians to massage therapists and polygraph examiners to weather modifiers, must also obtain licensing from the Texas Department of Licensing & Regulation (TDLR). To learn about which special licenses and permits your business may have to obtain head to the Business Permit Office’s Texas Business Licenses & Permits Guide or directly to the Texas Department of Licensing and Regulation website to apply.
The majority of small businesses don’t require federal licenses or permits; however, if you are involved in any activities regulated by the federal government, you may need a federal license. The most common areas of business controlled by the federal government include:
