Like any business that sells food to the public, a bakery must obtain the required state, county, and city licenses and permits before opening its doors. In most jurisdictions, bakeries are classified as food establishments, which means securing a permit from the local health department is usually required.
Exact licensing requirements vary by state, county, and city. They can also depend on factors like the scale of your operations and whether you're running a storefront (retail) bakery or a home-based bakery operating under cottage food laws.
If you're exploring what licenses and permits you need to open a bakery, this guide breaks down the licensing requirements that can apply to your business.
Business licensing for retail bakeries
Brick-and-mortar bakery businesses are subject to several licensing, permit, and tax registration requirements. Below is a list of the most common general business and food-related licensing requirements for a bakery with a storefront.
1. General business-related licenses, permits, and registrations
Like most businesses, retail bakeries are subject to a range of general licensing, tax, and regulatory requirements that apply regardless of industry. These fall into three categories: business registration and tax, employment and payroll compliance, and zoning and building permits.
Business registration and tax
- Secretary of State registration. If you form your bakery as an LLC or corporation, you must register with your state's Secretary of State (or equivalent state agency) to legally establish the entity.
- Employer identification number (EIN) . Issued by the IRS, an EIN (also referred to as a federal tax identification number) is required for many business types, whether or not you have employees.
- State tax ID number and seller’s permit. Most states require businesses to register with the state's department of revenue or taxation for a state tax ID number. If your bakery sells taxable goods or services, you'll also need a seller's permit, which allows you to collect and remit sales tax. Other common names for a seller's permit include sales tax license or sales tax permit.
- DBA/fictitious business name registration. If your bakery operates under a name different from its legal business name (such as your own name or your LLC's registered name), you may need to register a "doing business as" (DBA)" or fictitious business name. Requirements vary by state, and in some cases by business entity type, so registration may be handled at either the state or county level.
- General business license. This license (sometimes referred to as a business privilege license or a tax certificate) is typically issued by your city and grants you legal permission to operate a business there. 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, also require a state-level business license in addition to any local licensing.
Employment and payroll compliance
- New hire reporting. Employers are required to report newly hired and rehired employees to a state directory (often run by the Department of Revenue or a similar agency) within a set window after their hire date.
- Payroll withholding. Employers must register with their state's tax agency to withhold state income tax from employee wages, in addition to federal withholding requirements administered by the IRS.
- State unemployment insurance (SUI). Most states require employers to register for a state unemployment insurance account and pay SUI taxes.
- Workers’ comp insurance. Most states require workers' compensation coverage once you have at least one employee.
Zoning and building permits
- Zoning and land use permits. Local zoning laws determine where certain business activities are allowed. Before opening, confirm your location is zoned for retail food service, and obtain a permit if required to verify compliance.
- 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 to remodel or build out a commercial space, you'll need a building permit before construction begins.
- Sign permit. Most cities require a sign permit before you install exterior signage. Local zoning codes strictly regulate the sign's size, lighting, placement, and design.
- Dumpster permit. If your bakery needs a dumpster for waste disposal, you may need a permit from your city authorizing its placement.
- Fire safety permits. You may need separate permits for fire safety systems, such as a sprinkler system or fire alarm system issued by your local fire marshal or fire department.