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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