How to get a business license in Texas

Do you need a business license in Texas?

While Texas does not have a general, state-level business license, doing business in Texas typically requires obtaining one or more licenses and permits to operate legally.

Many Texas businesses need to obtain a sales and use tax permit from the Texas Comptroller's office. A sales tax permit is required if you sell, lease, or rent tangible goods, property, or services in Texas that are ordinarily subject to sales tax. Remote sellers shipping goods into Texas may also need a permit, as may marketplace providers and sellers operating in Texas.

For certain professions and industries, there are additional state-level licensing, registration, or certification requirements. You may also need local permits, such as certificates of occupancy, signage permits, health department permits, and more.

Texas also requires businesses to file an annual business personal property rendition with their appraisal district by April 15. Business personal property includes all tangible, income-producing property that isn't real estate. Starting in 2026, businesses may claim a $125,000 exemption per location (subject to aggregation rules for related entities).

Steps to obtaining a business license in Texas

Business license requirements and the process for obtaining a license, can vary based on your business activities and where you operate. Below are the general steps for obtaining a business license in Texas.

Step 1: Research licensing requirements

Research all licensing requirements early in your business planning process. This should be done for every location where you plan on operating. Check zoning requirements, as these may restrict where you can do business. State and various local Texas government websites have online resources to help you identify your specific requirements.

For more information, see Research: The first step in business license compliance

Step 2: Register your business entity

To form a corporation or LLC in Texas, you must register with the Secretary of State's office. Out-of-state businesses operating in Texas must register as a foreign business entity. All Texas LLCs and corporations (domestic and foreign) must also appoint and maintain a Texas registered agent in the state.

Step 3: Obtain an EIN

A federal employer identification number (EIN) is issued by the IRS and is required for many businesses. An EIN is used for filing federal taxes, opening a business bank account, and managing tax reporting for vendor payments (such as issuing 1099s).

Step 4: Register a fictitious business name (optional)

If you plan to operate under a name other than your legal business name — known as an assumed name or "doing business as" (DBA) — you must register that name with the state or the county in which the business is headquartered, depending on the business type. Formal business entities such as LLCs and corporations file for an Assumed Name Certificate with the Secretary of State. Unincorporated businesses such as sole proprietorships and general partnerships file with the county.

Step 5: Obtain state-level licenses, registrations, and permits

Texas businesses are responsible for obtaining all required state-level licenses, permits, and registrations. Common requirements include obtaining a sales and use tax permit from the Texas Comptroller's office; registering with the Texas Workforce Commission if you have employees; and obtaining industry- or occupation-related licenses and permits.

The Texas Department of Licensing and Regulation licenses and regulates a range of occupations, businesses, facilities, and equipment in nearly 40 programs.

Step 6: Apply for local business licenses and permits

Most businesses need at least one license, permit, or registration at the city or county level to operate legally.

Common local requirements include business-specific licenses and permits (such as health permits), zoning approval, certificates of occupancy, and signage, alarm, and home occupation permits.

Keep in mind that these requirements apply in every jurisdiction where you operate, and some cities require a separate license for each physical location.

Business license and permit requirements in Texas

Depending on your business type, location, and industry, you may need a combination of local, state, and federal licenses and permits. Here's an overview of the common license and permit requirements in Texas.

State

• Texas sales and use tax permit: Required for the selling, leasing, or renting of tangible personal property and the selling of taxable services. A separate sales tax permit is required for each business location.
• Industry and professional licenses: Many industries and professions require a license or registration issued by a state agency. These requirements may apply to the business, the individual, or both. Common examples include professional services (such as healthcare or law), restaurants, and contractors. The Texas Department of Licensing and Regulation issues many of these licenses.
• Special state permits: Businesses that sell regulated products such as alcohol or tobacco must obtain special state-issued permits.

Local

• Local licenses and permits: Cities and counties may impose additional licensing and registration requirements, such as certificates of occupancy, certificates of use, and permits from zoning, health, and other departments.

Federal

• Federal licenses and registrations: Federal licenses are typically required for businesses regulated by a federal agency, such as the Securities and Exchange Commission (SEC), the U.S. Department of Agriculture (USDA), or the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF). For example, food businesses that buy or sell more than 2,000 pounds of fresh or frozen fruits or vegetables in any given day must obtain a USDA PACA license.

How much does a Texas business license cost?

The cost of business licenses in Texas varies widely based on the location and type of license or permit. While there is no fee to apply for a sales tax permit, local permits like a certificate of occupancy can cost $100 or more. In Houston, for example, fees range from $94 to $537.

Costs can be significantly higher in heavily regulated industries. For example, Texas Alcoholic Beverage Commission (TABC) licensing fees range from $300 to $10,000 for a two-year period.

What are the penalties for not having a business license in Texas?

Conducting business without the required state or local licenses can result in fines and penalties. For example, engaging in business as a seller without a sales tax permit or with a suspended permit is a criminal offense, with penalties that increase with each violation and can include fines and jail time.

How to renew a business license in Texas

Texas business licenses and permits require periodic renewal, typically every one to two years, with requirements varying by license type. Professional licenses, for example, may require completed continuing education hours or passing an exam before renewal.

Most city and county business permits renew annually. Local governments may also require you to notify them if you need to cancel a permit. It's important to track renewal deadlines and update your licenses promptly if any business details change, such as your name or address. Failing to renew can result in penalties, fees, and the inability to legally operate.

Conclusion

Navigating Texas business licensing can be complex. While there is no general state-issued business license, most businesses still need a mix of state permits (such as a sales and use tax permit), industry-specific registrations, and local approvals in every city or county where they operate—plus ongoing renewal and reporting deadlines.

If you want help identifying requirements, completing filings, and keeping everything current, CT Corporation can provide the expertise and support to help you stay compliant from startup through expansion.

Texas business license resources

• Business license requirements: Compliance guide
• Texas Secretary of State
• Texas Comptroller
• Texas Department of Licensing and Regulation