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How to get a business license in Texas?

Texas is one of the top destinations where setting up a new business is concerned. Once you have registered your LLC, Corporation, or any other business, all you require is a Texas business license to make the company operational. Different states have different licensing requirements and hence we have created this guide to provide you with information pertaining to Texas business license and permits, state licensing requirements, licensing costs, licenses for specific occupations and professions, documents required, and zoning regulations among others.

Business License in Texas

Texas is considered as one of the economically resilient states and has made some astounding economic recoveries in the past. It is home to 25 Fortune 500 companies including American Airlines Group, Hewlett Packard Enterprise, Energy Transfer, Valero Energy, and Dell Technologies among others. If you are planning to become a part of the growing economy then one of the important requirements is a Texas business license.

What business license do I need in Texas?

Texas is home to some of the strongest industries known for faster and higher growth include retail trade, leisure and hospitality, business and professional services, manufacturing industry, financial services, and the energy sector among others. The type of Texas business license you require will depend on the industry your business is in and the type of activity your company specializes in. The State of Texas does not require you to obtain a Texas business license or general license. If your business is transacting in the state then the certificate of formation from the office of Secretary of State along with an assumed name certificate provided by the office of the county clerk is considered as a general business license.

Your business may require a single license or multiple licenses and permits. Once you obtain a Texas business license, in order to ensure the operational status, you will be required to renew licenses and permits annually or as required by the state and counties. Business licenses can be divided into the following categories in Texas:

  • Sales Tax Permit
  • Licenses and Permits for specific business activities
  • Professional and occupational licenses

Sales Tax Permit

There are no general business licenses applicable in Texas but a sales tax permit is a type of general Texas business license for entities that have a physical presence in the state. A sales tax permit is required if:

  • You are conducting a business in Texas
  • You intend to lease or sell taxable services and tangible personal property
  • You maintain a physical presence in the state like distribution center, warehouse etc.
  • Your company has a sales representative operating within the state responsible for direct sales of any taxable goods
  • You promote an event that involves selling of taxable goods

In order to obtain a Texas business license like the sales tax permit, you will have to submit AP-201: Texas application for sales and use tax permit. It has to be submitted with the office of the Texas Comptroller of Public Accounts. You can also submit the permit application online with the Texas Comptroller Office through their eSystems Menu.

Texas Licenses or Permits for Specific Business Activities

Different types of business activities require different Texas business licenses , and permits. Comprehensive state-level permit information and licensing requirements in Texas are provided by the Business Permit Office, which is a division of the Governor’s Economic Development and Tourism Division. The management of business licenses and permits is the responsibility of the Texas Department of Licensing and Regulation (TDLR). The licenses and permits have been divided under more than 150 categories of activities thus enabling a proper Texas business license search by entrepreneurs and new business owners. Let’s look at an example to understand this well.

Example: If you start a new business that provides a “Day Activity and Health Services (DAHS)” facility then it needs to be licensed to operate in the state. You will have to complete a Texas business license application online using the Texas Unified Licensure Information Portal (TULIP) portal. You will also be required to submit additional documents like the fire marshal inspection report and a health authority letter. The license fee is $75 and the license is valid for a 3-year period. This license is issued by the Texas Health and Human Services.

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Texas Business Licenses for Specific Occupations and Professions

There are several businesses where the sole proprietor, single or multiple owners start a company offering a specific service. According to the type of service offered, the owners may require occupational, professional and facility business licenses in order to operate. You can conduct a Texas business license search to choose from over 250 professional, occupational, and facility business licenses available. Some of the licenses would require you to take an exam in order to get licensed.

Example: If you set up a plumbing business then you need to first obtain a Texas business license for plumbing occupation. You will have to take an examination like the “Master Plumber Examination” organized by the Texas State Board of Plumbing Examiners. The examination fee is $175 and the initial license fee is $75.

Similarly, the Texas Medical Board provides Texas business licenses and permits as well as regulation requirements for specific medical occupations and professions like acupuncturists, physicians, surgical assistants, and medical technologists among others. The board also provides provisional licenses and Faculty Temporary License (FTL).

You can conduct a Texas business license search to find your specific occupation or profession and the corresponding licenses and permits.

Texas Department of Licensing and Regulation

The Texas Department of Licensing and Regulation (TDLR) is one of the top state agencies and is primarily responsible for business licensing and regulating a wide variety of businesses, occupations, equipment, and facilities in Texas. You can conduct a Texas business license search based on your business activity or occupation. You can also apply for and obtain a Texas business license online, and also handle yearly renewals.

Texas Business Licenses for Home Businesses

Due to the high accessibility to the internet and the convenience of working from home, many entrepreneurs in Texas are opting for home-based businesses. The question is do you need to obtain a Texas business license for such a business. You will require licenses or permits for your home-based business depending on the type of business activity.

If you start an online business from home that is into selling goods then you may even require a sales tax permit issued by the Texas Comptroller of Public Accounts. If you are selling a service and if it falls under the programs licensed and regulated by TDLR then you will have to apply with the Texas Department of Licensing and Regulation for a Texas business license.

Example: If you start a business as a “Behavior Analyst” working or meeting your patients at your residence or providing advice and therapy to clients over the internet then you will need to apply using the Behavior Analyst / Assistant Behavior Analyst License Application. You will be required to provide your Behavior Analyst Certification Board (BACB) certificate number and expiration date. The license fee for Behavior Analyst is $165 and you will have to submit the license application along with this fee.

It is important to remember that the fee will vary depending on the type of Texas business license you are applying for. IncParadise, one of the top registered agents in Texas offers a specialized “Business License Research Report” service, which constitutes supporting document requirements, a list of filing instructions, and fees for all types of Texas business license and permits.

TDLR License Data Search (Active license only)

Once you obtain a Texas business license and want to check its expiration date and other relevant details, how do you do it? You can conduct a Texas business license search by accessing the Texas Department of Licensing and Regulation (TDLR) database. You can search this database only if your license is active. You can also access this portal to download the file format for license applications of different types of business activities.

Documents Needed for Your Texas Business License Application

When you apply for a Texas business license there are several types of documents that you may need to submit along with the application. There are some business specific documents that vary according to business activity and there are documents that are generic and applicable to all entities. The most common documents that you might need to submit in order to obtain a Texas business license are:

  • Tax ID Number – Depending on the type of business, you will need to submit a copy of your tax ID number along with the Texas business license application. Businesses like sole proprietorship or home based single owner businesses require to provide Social Security Number (SSN) while LLCs and corporations require Employer Identification Number (EIN) disclosure to obtain Texas business license. If you haven’t applied for a tax ID then IncParadise can assist you with EIN application.
  • Articles of organization or Articles of incorporation – In the state of Texas, you have to file a “Certificate of Formation” to register your entity with the office of the Secretary of State. The certificate of formation is applicable for LLC, For-Profit Corporation, Nonprofit Corporation, Professional Corporation, Professional Association, Professional Limited Liability Company, and Limited Partnership. A copy of the formation documents have to be submitted to obtain a Texas business license.
  • Any insurance policies for your business – Depending on the type of business activity, you may need to apply for and obtain insurance policies like construction companies are required to possess general liability insurance. Some of the other types of insurance that companies may opt for includes workers’ compensation insurance, commercial auto insurance, and liability and property insurance among others. The Texas Department of Insurance (TDI) provides detailed information on the type of business insurance your company can invest in. You may need to submit certificates of insurance along with your Texas business license application.
  • A statement detailing your organization’s mission – An organization’s mission statement is an integral aspect of the growth and business plan of any company. It provides a brief explanation of the reasons for the existence of the said company. The mission encompasses the organization’s purpose as well as its short-term and long-term goals and objectives. The mission statement is sometimes required during filing license or permit application and to obtain a Texas business license.
  • Your tax ID for selling retail goods – A new business in Texas is required to obtain sales and use tax permits in Texas if they are selling tangible personal property, sales of taxable goods, or maintaining a warehouse in the state. The tax ID for selling retail goods is also known as the seller’s permit and you can obtain this by filing the required application with the Texas Comptroller of Public Accounts (CPA). A copy of this tax ID would be required when applying for a Texas business license.

Building & Zoning Permits

One of the key components of a Texas business license is building and zoning permits. The Department of Planning and Development of each county or city of Texas oversees, regulates, and issues building and zoning permits. Each city or county in Texas has its own Zoning and Building Code and pursuant to these codes, a business owner has to first apply for a Zoning Permit followed by application for a Building Permit if required.

Building & Zoning Permits are often categorized under Texas business license and permits as it is mandatory for certain businesses. If you start a construction company then you will need to apply for a building permit prior to applying for a Texas business license. A zoning permit on the other hand is a type of permit that is issued by a city to allow the use of property or a building for business purposes. The need for these permits also varies according to the city like Austin has building and zoning permits while Houston does not have any zoning permits.

Need any Assistance in Obtaining Your Texas Business License?

If you plan to start a new business in the state of Texas then there are certain requirements you have to fulfill to make your business operational. One of the most important requirements is that of applying for and obtaining a Texas business license. A business may require single or multiple licenses and permits, which is where the Business License Research Report service by IncParadise can provide you with the right information and guidance.

IncParadise, one of the reputed registered agents in Texas can also assist you with fulfilling various requirements associated with obtaining Texas business license and permits. In order to help you with different requirements related to business formation and licensing, we offer a wide variety of additional services. These services vary from helping you obtain a tax ID (EIN), or apply for a Texas Certificate of Good Standing among others.

Do you have any questions regarding Texas Business License?