Once you have formed an LLC or incorporated your small or medium sized business in Texas, you will be required to apply for a business license to make your LLC or Corporation operational.
What type of license is applicable for your business will depend primarily on the business type. There are almost 250 occupational, professional, and facility business license in Texas to choose from and they can be obtained directly from the Texas Department of Licensing and Registration.
At the same time, it is important to keep in mind that the county or local city you are operating your business from may require an additional business license or even permits. Let’s take a look at the licenses in detail and how to obtain them.
How to Obtain Texas State Business License
Any small or medium sized business working in the State of Texas may require a combination of business licenses and permits from State as well as Federal agencies. The fees and licensing requirements will vary in accordance to type of business activities, the county or city your business is operating from, and specific government rules.
How and where can you get your Texas company license from? You can obtain your Texas State business license by downloading Form 3301, which is primarily for application or renewal of license.
The fee for business license in Texas is $285 and this includes $250 licensing fee plus $35 application fee. Apart from this, you will be required to pay a royalty fee to the state. The royalty fee is 3 percent of the annual gross received related to the licensed use if it is in excess of $5,000.
You will also be required to submit a quarterly report to the Texas Secretary of State. The royalties will have to be submitted along with the report on a quarterly basis. The schedule for submission is as follows:
- First Quarter: Jan 1 – Mar 31 -> Report Due Date: April 15
- Second Quarter: Apr 1 – June 30 -> Report Due Date: July 15
- Third Quarter: July 1 – Sept 30 -> Report Due Date: October 15
- Fourth Quarter: Oct 1 – Dec 31 -> Report Due Date: February 15
The completed form 3301 can be:
- Mailed to Registrations Unit, P.O. Box 13550, Austin, Texas 78711-3550
- Hand delivered to the James Earl Rudder Office Building, 1019 Brazos, Austin, Texas 78701.
- Submit ONLINE at TDLR (Texas Department of Licensing and Regulation).
Once the completed application has been approved, the Secretary of State will issue a business license that will enable you to operate in the State of Texas.
Types of Business License in Texas
As far as business license in Texas is concerned, the state does not require a general business license. This is considered to be an initiative towards creating a more business-friendly approach.
Texas company license can be broadly categorized under the following headings, which are:
- Texas professional license
- Federal license
- Environmental licenses
Licenses that permit businesses to operate in the State of Texas vary from one county or city to another. Let’s look at Dallas for example. You will require a business license for 4 different categories, which are home, alcohol, vending carts, and Sexually-Oriented Businesses. The fee for the above licenses can vary from $25 to $500 except for liquor permits, which will cost you $7,202 plus $690.
On the other hand, if you are planning to operate from Plano, then you will require specific permits under professional business license. The permits include Food Vendor Permit (includes mobile food vendors), Alcoholic Beverage Permit (this is enforced by TABC as well as the City of Plano), Special Event Permit, Commercial Permit (this includes sexually oriented businesses), and Solicitor Permit. The base fee for these permits is $20.
Note: The review and processing of the license application form varies from one county to another but as a norm it can take anywhere from take 5 to 14 business days for professional business license in Texas. The maximum processing time for a liquor permit though is approximately 75 business days.