Starting a business in Texas comes with a common misconception. Many entrepreneurs waste hours searching for a general state business license that doesn’t exist. Then they assume they’re completely off the hook for any licensing requirements.
Neither assumption is correct. Understanding how to get a business license in TX means recognizing that Texas uses a different approach than most states. Instead of one blanket license, you’ll need specific licenses and permits based on your business type, location, and activities. This comprehensive guide breaks down exactly what you need and how to get it right.
Key Takeaways
- Texas has no general business license requirement, but your Certificate of Formation or Assumed Name Certificate serves as the equivalent state registration
- Most Texas businesses need a sales tax permit, plus industry-specific state licenses and local business licenses depending on activities and location
- Operating without proper licenses and permits can result in fines starting at hundreds of dollars, forced shutdowns, and even criminal charges
What Is a Business License in Texas?
A business license is government authorization to conduct specific business activities in a particular jurisdiction. The term can be confusing in Texas because the state doesn’t issue a general business license requirement that applies to everyone.
Your business registration itself functions as your baseline authorization. For LLCs and corporations, that’s your Certificate of Formation from the Texas Secretary of State. A sole proprietor or partnership operating under an assumed name files an Assumed Name Certificate with their county clerk. These documents satisfy what other states call a “general business license.”
You’ll still need various licenses and permits based on three factors:
- What you sell or do (business activities and type of business)
- Where you operate (state, county, and city requirements)
- How your business is structured (sole proprietorship, limited liability company, or corporation)
A restaurant in Houston faces different requirements than a consulting firm in Austin. Understanding what business licenses you need starts with identifying your specific situation.
Why Texas Business Licenses and Permits Matter
License requirements exist to protect public safety, ensure fair business practices, and maintain industry standards. When you obtain proper authorization, you’re demonstrating that your business meets legal requirements for your activities.
Beyond compliance, licenses also create competitive advantages. Customers trust licensed businesses more. In fact, many contracts require proof of proper licensing before you can bid. Banks and investors want to see you’ve handled legal obligations correctly.
Most importantly, licenses keep you operational. Without them, you risk enforcement actions that shut down your business enterprise entirely.
Consequences of Operating Without Proper Licenses in Texas
The penalties for missing license requirements hit harder than most small business owners expect.
Direct financial penalties include:
- Sales tax violations: Up to 50% of taxes owed plus interest
- Professional licensing violations: Often $1,000+ per day
- Local business license violations: $500 to $2,000 in major cities
- Industry-specific fines varying by permit type
Cease and desist orders stop revenue immediately. State and local authorities can even force you to halt operations until you obtain proper licensing. That means your employees can’t work, your customers can’t buy, and revenue stops while overhead continues.
Criminal charges apply in certain cases. Eleven worse, operating without required professional licenses in healthcare, law, or financial services can result in misdemeanor or felony charges. Even selling alcohol without proper permits from the Texas Alcoholic Beverage Commission carries potential criminal liability.
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Other consequences:
- Contract enforceability issues—some courts rule contracts by unlicensed businesses unenforceable
- Payment disputes where clients legally refuse payment
- Reputation damage through public enforcement actions
- Competitive disadvantage when others use your compliance failures against you
For businesses across multiple states, these consequences of non-compliance multiply across every jurisdiction.
6 Steps to Get Your Texas Business License
Getting licensed in Texas requires working through federal, state, and local requirements systematically. The process varies based on your business structure, industry, and location. Here’s how to handle each level.
Step 1: Choose Your Business Structure and Register
Before applying for most licenses, establish your business structure. Whether you form an LLC or corporation determines which registration path you follow.
For LLCs and corporations, you’ll need to:
- File a Certificate of Formation with the Texas Secretary of State office
- Pay the $300 online filing fee
- Wait 5-7 business days for processing (expedited options available)
LLCs provide liability protection while maintaining tax flexibility—they can choose how they’re taxed and avoid double taxation. Corporations offer liability protection too, but require more formal structures like board meetings and corporate minutes. Learn more about forming an LLC in Texas for detailed guidance.
Sole proprietorships and partnerships don’t need state registration unless operating under an assumed name. If you’re doing business under a name different from your legal name, file an Assumed Name Certificate with the county clerk office in each county where you maintain a physical location. Filing fees typically run $15-$25 per county.
After registration, obtain an Employer Identification Number (EIN) from the Internal Revenue Service for federal tax purposes. It’s free and available immediately through the IRS website.
Step 2: Obtain Your Texas Sales Tax Permit
The Texas sales tax permit is the most common statewide requirement. You need this tax permit if you sell tangible property, lease or rent property, or provide taxable services.
To apply for your Texas sales tax permit, you’ll need:
- Your EIN from the Internal Revenue Service
- Business structure information
- NAICS code for your industry
- Business address and ownership details
Apply through the Texas Comptroller’s online system at no cost. The Texas State Comptroller office processes most applications immediately, though some may require additional documentation. Get details about what a sales tax permit is and how it works.
Operating without one when required means you’re still liable for all taxes owed, plus penalties and interest.
Step 3: Identify Industry-Specific State Licenses
Certain business activities require specialized state licenses. The Texas Department of Licensing and Regulation office oversees many of these, though other agencies handle specific industries.
Common state licenses by business type:
- Food service: Health permits from Texas Department of State Health Services
- Alcohol sales: Permits from Texas Alcoholic Beverage Commission
- Contractors: Trade-specific licenses through TDLR
- Healthcare providers: Certification through professional boards
- Auto dealers and repair: Licenses from Texas Department of Motor Vehicles
- Professional services: State board licensing for accountants, engineers, and real estate agents
The 2024-2025 Texas Business Licenses & Permits Guide from the Texas Business Permit Office covers requirements for over 300 business types and provides permits by business type. Check business license compliance by state for broader context.
Fees range from under $100 to several thousand dollars. Processing typically takes 4-8 weeks. Your approved license will include a unique license number for tracking and renewal purposes.
Step 4: Research Local City and County Requirements
Local requirements catch many owners off guard. Cities and counties often have their own licensing despite no state general business license requirement.
Major Texas cities have distinct requirements:
- Houston: Business registration plus industry-specific permits
- Austin: Certificate of occupancy for commercial locations
- Dallas: “DallasNow” system for applications and renewals
- San Antonio: City license plus zoning approval
Common local permits include:
- General business operating licenses
- Zoning permits for your location
- Sign permits for exterior signage
- Health permits for food businesses
- Home occupation permits
- Building permits for renovations
Contact your city clerk office or county clerk office directly. Ask specifically about requirements for your business type and get everything in writing. If you’re starting a business in Texas, understanding local nuances is crucial.
Step 5: Check Federal Licenses and Registration
The federal government requires licenses for businesses in regulated industries.
Industries requiring federal licenses include:
- Agriculture
- Aviation and aerospace
- Firearms and ammunition
- Alcohol production and distribution
- Commercial fishing
- Maritime transportation
- Mining and drilling
- Broadcasting
- Transportation services
Federal licenses come from the specific agency overseeing your industry. The Small Business Administration website lists all requirements. Applications go directly to federal agencies. You’ll also need to ensure your federal tax registration is current for your business structure.
Step 6: Set Up License Tracking and Renewal Systems
Getting initial licenses is only the beginning. Maintaining compliance requires tracking renewal deadlines across jurisdictions.
Common renewal tracking challenges:
- Renewal schedules vary by license type (annual, biennial, or other intervals)
- Different agencies have different due dates throughout the year
- Late fees pile up quickly when deadlines are missed
- Some licenses require restarting applications if they lapse
- Staff turnover means tracking knowledge walks out the door
- Spreadsheets become unmanageable with multiple locations
The Texas Business Permit Office offers a license and permit tracker template as a starting point for small business owners managing basic requirements. However, growing companies face manual compliance risks that spreadsheets can’t solve.
Missing renewal deadlines triggers new violations with the same penalties as operating without a license in the first place.
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Managing Texas Licenses Across Multiple Locations
Operating in multiple Texas cities multiplies your compliance workload. Each location brings separate applications, fees, and renewal schedules.
Out-of-state companies hiring employees or doing business in Texas may need foreign qualification with the Texas Secretary of State office—separate from activity-based licenses.
Growth triggers new licensing needs:
- Additional locations mean new local licenses
- Product expansion might trigger new state permits
- Hiring creates business employer requirements through Texas Workforce Commission
- New cities require researching each municipality’s requirements
- Crossing state lines adds entirely new regulatory frameworks
Multi-state compliance automation centralizes license tracking across locations, monitors deadlines automatically, and alerts you before permits expire.
Keeping Your Texas Licenses Current
Common renewal mistakes:
- Waiting until the last minute to apply
- Forgetting to update business information after moves or ownership changes
- Missing renewal notices sent to old addresses
- Letting prerequisite certifications lapse
- Failing to pay fees on time despite correct paperwork
Set renewal reminders 60 days before expiration. When your business changes—address, ownership, additional locations—update licenses immediately. Operating with outdated information can void licensing even though you paid for coverage.
A professional tax consultant can help ensure you’re meeting all requirements, especially as your small business grows more ambitious. Small Business Development Centers provide free small business resources for navigating compliance questions. However, professional guidance still requires you to implement and track ongoing obligations.
If managing multi-state registered agent requirements alongside licensing, the administrative burden grows substantially.
Simplify Texas Business Licensing With Mosey
Texas business licenses involve more moving parts than most entrepreneurs expect. Between state registration, sales tax permits, industry licenses, and local requirements across different cities, compliance burdens add up quickly.
For businesses in multiple Texas locations or expanding to other states, manual tracking can go off the rails quickly. Thankfully, Mosey automates the challenging parts so you focus on running your business.
- Entity compliance tracking across all 50 states
- Automatic license renewal monitoring
- Alerts before deadlines pass
- Immediate notifications when regulations change
- Centralized dashboard replacing scattered spreadsheets
- Employee handbook updates staying current with legal requirements
Ready to stop worrying about compliance gaps? Schedule a free consultation with Mosey to see how we help Texas businesses stay compliant.
Texas Business License FAQs
What is needed to get a business license in Texas?
To get a business license in Texas, you need to register your business entity, obtain a sales tax permit if you sell goods or taxable services, and secure any industry-specific state licenses and local permits required for your business type and location. Texas doesn’t have a single general business license, so requirements depend on your specific business activities.
Is an LLC a business license in Texas?
An LLC is not a business license in Texas—it’s a business structure providing liability protection to owners. However, your LLC’s Certificate of Formation from the Texas Secretary of State serves as your official business registration, functioning similarly to what other states call a general business license.
How long does it take to get a business license in Texas?
Getting a business license in Texas typically takes 4-8 weeks depending on which licenses you need and which agencies are involved. LLC registration processes in 5-7 business days, sales tax permits are usually immediate, and industry-specific licenses can take several weeks to months.
How much does a business license cost in Texas?
A business license in Texas costs anywhere from $0 to several thousand dollars depending on requirements. The sales tax permit is free, LLC formation costs $300, local business licenses range from $15 to a few hundred dollars, while specialized professional licenses can exceed $1,000 with various fees for renewals.
What are the penalties for not obtaining necessary licenses and permits in Texas?
Penalties for not obtaining necessary licenses and permits in Texas include fines ranging from $500 to $2,000 for local violations, up to 50% of taxes owed for sales tax violations, and $1,000+ per day for professional licensing violations. Authorities can force your business to cease operations, and certain violations may result in criminal charges.
Is obtaining a business license the same as registering your business in Texas?
Obtaining a business license is not the same as registering your business in Texas, though they’re related processes. Business registration establishes your legal entity with the state or county, while business licenses authorize you to conduct specific activities—you must register before applying for most licenses and permits.
