A bakery business, as with any company that sells food to the public, must obtain the required state, county, or city licenses and permits.
In fact, in most jurisdictions, bakeries are treated as food establishments and must obtain a permit from the health department.
Licensing requirements to open a bakery business can vary by state, county, and city. Other considerations include the scale of your operations and whether you operate a storefront bakery or a home-based bakery business.
If you’re asking, “what licenses do I need to open a bakery?”, read on.
Retail bakery business license requirements
Brick-and-mortar bakery businesses are subject to several licensing, permit, and tax registration requirements. Below is a list of the most common licensing requirements for a bakery business with a storefront.
1. Food-related licenses, permits, and certifications
These are generally issued by your local health department. You may need more than one license depending on the business activity you conduct. For example, New York City issues one type of permit for food service establishments and a separate one for food processing and/or food preparation.
In some jurisdictions, this permit may also be referred to as a “building health permit” (not to be confused with a building permit).
Some jurisdictions also require all employees involved in the preparation, storage, or service of baked goods in a food facility to obtain a food handler permit.
The application process for food service licenses and permits can be lengthy and must include building plans and inspections. Check with your city’s small business department to find out licensing and application requirements to open a bakery.
2. General business-related licenses, permits, and registrations
In addition to a food service license or permit, you may need other business-related licenses, permits, and registrations. Examples include the following:
- Federal tax ID (EIN) number: Issued by the IRS, an EIN (also called a tax identification number or employer identification number) is required for many business types, including partnerships, LLCs, and corporations. If you are a sole proprietorship that plans on hiring employees, you will also need to obtain an EIN.
- State tax ID number: Issued by your state’s department of revenue or taxation, the state tax ID number is often called a tax registration number.
- Sales tax license/sellers permit/resellers permit: This license/permit has many names, and those names vary by state. But this license/permit is required for the selling of almost all products and services.
- Workers’ comp insurance: In most states, workers' compensation coverage is mandatory if you have at least one employee. Many states also require that businesses report new or rehired employees to the Department of Revenue or other state agency.
- DBA/fictitious business name registration: The doing business as (DBA) or fictitious business name registration happens with the appropriate state or local jurisdiction.
- General business license: This license (sometimes referred to as a business privilege license or a tax certificate) is typically issued by your county or city and grants you legal permission to operate a business in your city or state. If you plan to open several locations, you might need a general business license in each city where you operate. Some states, such as Washington and Nevada, have state-level licensing requirements in addition to local business licensing requirements.
- Zoning and land use permits: Local governments’ zoning laws may prohibit certain business activity in designated areas.
- Certificate of occupancy: A certificate of occupancy states a legal use and/or type of permitted occupancy of a building.
- Building permit: If you plan on remodeling or building a commercial space, you'll need to get a building permit.
- Sign permit: Before you put up a sign outside your business, you’ll need a sign permit from your city.
- Dumpster permit: This allows your bakery to place a dumpster near your business for the proper disposal of food waste. Check with your city to see if you need one.
