Once you have formed a business in Tennessee, what is the next step towards making your business operational? A business license in Tennessee is one of the important requirements though not every Tennessee business requires a license. At the same time, there are several types of businesses that may require one or more licenses or permits. Different types of licenses and permits are issued by different state agencies and some of the important issuing authorities include:
- The Department of Agriculture’s Consumer and Industry Services
- The Alcoholic Beverage Commission
- The Department of Health (DOH)
- The Department of Environment & Conservation
What is the process for issuance of a business license?
Step-by-Step Guide to a Business License in Tennessee
Here is a step-by-step approach towards acquiring a business license in the state of Tennessee:
Step#1: The Industry or Business Type
How would you know what type of business or professional license is required to operate in Tennessee? The type of industry or the activities of a business entity helps in identifying the type of business license required.
It is important to note that you may have to apply for a standard business license in the state if your business is located in Tennessee and is subject to business tax, where your taxable sales are $10,000 or above. Depending on where your business is located you will be required to apply to the office of the County Clerk or City Official.
The license can also be obtained from various state agencies directly depending on the type of business you have. Let’s take a look at some examples to understand this better:
These kinds of business licenses are issued to some business types like food service establishments and hotels while permits are issued to others like bed and breakfast.
- Issued by: Tennessee Division of Environmental Health
- Example: If you were to establish a “food service establishment” then this will include any establishment, permanent or temporary, place or location, where food is being prepared and served to the public and consists of foods, vegetables, and even alcoholic beverages. Requirements of a food service establishment
A Tennessee company license will be issued only after proper inspection procedures have been completed and approved.
- Fees: The fee for a license or permit for a food service establishment like a restaurant will vary according to the seating capacity and have been established by the statutes of the state. An establishment with a seating capacity of 50 or less will have to pay a fee of $210 per year while the ones with more than 51 seats will pay $360 per year.
- Renewal of Business License: The license or permit year begins on July 1st and it will expire on June 30, the following year.
- License Issued by: Tennessee Alcoholic Beverage Commission issued Liquor-By-the-Drink (LBD) licenses also known as “On-Premise Consumption” licenses. The business license is normally issued to hotels, restaurants, private clubs and other similar establishments, which are eligible under the Tennessee law. The LBD licenses are issued for the following:
– Special Occasion
– Hotel Motel
– Limited Service Restaurant
– Wine Only Restaurant
- You can apply for this license through the Regulatory Licensing and Permitting System (RLPS)
- Apart from this, several other types of business licenses in Tennessee are also issued by the Tennessee Alcoholic Beverage Commission for the following:
– Retail food store wine license
– Farm Winery
– Wine making on premises
Step#2: Licenses issued by City/County
If your business or industry type doesn’t fall under a state-wide license then you will have to check with the local city or county office. A Tennessee company license can also be issued by local counties or cities in which the business is located.
If your business is situated in any county like Shelby County then you will require either of the following types of Tennessee company license:
Standard License: You will require a “Standard Business License” if your business has gross above $10,000 annually, which is not exempt. Application Form
Minimal Activity Business License: This is a type of license that is issued to businesses that have a gross of more than $3,000 but less than $10,000 annually. Application Form
Step#3: Issuance of a Business License
How is a business license in Tennessee issued? You have to identify the following to complete the process:
- The type of business or industry
- Do you need a license or a permit?
- Will it be issued by the state or the city or county?
Once you have identified the above, all you need to do is either download the application online or contact the concerned state department or city of clerk office.
It is important to note that a business license or permit will have to be renewed annually unless specific dates have been mentioned, to keep the business operational.