What should I know about business licenses in Texas?
They say that everything is bigger in The Lone Star State and that includes the potential for your business in a state that is home to more than 28 million buyers of your product and users of your service.
Needless to say, Texas has an outsized reputation for low taxes and minimal regulations, but that doesn't mean that governmental compliance is easy to achieve. Even when the state government doesn't require a business to obtain a general business license, that's typically because they think the business license on the state level is redundant.
In other words, they expect their county and city governments to create regulations for their local businesses and enforce compliance with the rules. Somewhere/somehow, a Texas business license is required for your company and it's your job to find out where/how.
For example, consider how hard it is to obtain Texas business license requirements to operate an auto repair or auto detailing business. The requirements vary from city to city and in the case of Houston, there are no less than 11 different types of required business licenses ranging from a Body Shop Facility with Storage Privileges License to a Whole Jobber and Retail Supply Dealer License.
Even the seemingly simple Texas business licenses are more complex than you might imagine. If you plan to serve beer in a bar or a restaurant in Texas, you might rejoice at the news that the only alcohol license you'll need is on the state level. But your relief will be short-lived. It turns out that the single state-level Texas business license you need to serve liquor requires the complex sign-off of many different local agencies from the zoning board to the police department and/or city clerk.
Common Texas business license questions
Big plans to run a business in the Lone Star State? Texas is well-known for its thriving business ecosystem, so this is a great place to start your own. Here we have some of the most common business license questions to help you get up and running quickly in the big state of Texas.
No, the state of Texas does not have a general business license, but you do have to register your new business with the Secretary of State’s Office (SOS). Some additional regulatory agencies may require certain licenses and permits based on the products and/or services your business offers as well.
Even though there is no business license requirement, if your business is an LLC, you are subject to what is called a state franchise tax and the certification of formation for an LLC. In Texas, this currently runs at a flat rate of $300 for filing.
Only state permits, certifications, licenses, and authorizations are required for certain business enterprises in Texas. This can be required at the federal and local levels too.
Avalara can help you determine what steps you need to take based on your business type.
Licensing information for Texas cities
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