Do I need a business license?


By Andrew Hudson Published: September 27, 2011 Updated: November 18, 2016

Probably yes. Many U.S. states and cities require a business license (costing around $50 per year) for any type of business, including individuals selling photography online. Business licenses are local (e.g. state, county or city) law, so the rules depend upon where you live.

Where I am — in San Diego, California — a business license is called a Business Tax Certificate and is “required for all businesses located within city limits” including “all home-based businesses, self employed persons, and independents contractors.” So I need a business license.

“Most states and many cities or counties require that you obtain a license, permit or registration when you start a business, typically for tax purposes and sometimes to protect public health and safety.”
The Wall Street Journal

Search your location (U.S.)

SBA.gov’s Permit Me tool

Enter your ZIP code or City/State in the box below to see which licenses and permits apply to you.

How much does a business license cost?

My license costs $34 per year.

Can I apply online?

Probably yes. Many localities allow online applications. I used the San Diego Business Tax Online Application.

Do I need a license for an online (Internet) business?

Probably yes. If you need a business license in your locality, that would likely apply even for Internet-only businesses.

“Even if your business has no physical presence and exists solely as an Internet storefront, all regulations that apply to offline businesses also apply to your business. You will need a General Business License.”
Sacramento County

“A few states — including Alaska and Washington — require all businesses to get a state business license.”
Nolo

Example requirements

States:

“A business license is required for the privilege of engaging in a business in the State of Alaska.”
— State of Alaska

“State law requires that every person or entity doing business in the State of Nevada obtain a business license annually. … sole proprietors doing business in Nevada must maintain a State Business License.”
Nevada Secretary of State

Some cities near me:

“The City of Del Mar requires all businesses conducting ‘transactions and carrying on of business within the city’ to obtain an annual business license. Home-based businesses and those that operate through a post office box are also required to obtain a business license.”
— City of Del Mar

“Every company/person doing business based in a commercial building in the City of Poway must obtain a business certificate.”
City of Poway

“business certificates (licenses) are no longer required for businesses in the unincorporated portions of the County of San Diego.”
County of San Diego

What if I don’t get a business license?

Good point. For a simple, online, innocuous, photography-selling business, you may not get noticed. But for about $50, why not be safe — and get an official acknowledgement of your business.

“Many self-employed people, particularly those who work at home, never bother to get a local business license. If your local government discovers that you’re running an unlicensed business, it may fine you and bar you from doing business until you get a license. However, the chances of discovery are probably quite small (especially if you’re not doing anything to annoy your neighbors — and thereby increase the chances that they might report you to the local authorities).”
Nolo

Other licenses you may need

  • Federal Employer Identification Number (EIN) if you’re a sole proprietor with employees, or a partnership, LLC or corporation.
  • State Seller’s Permit if you’re selling goods or services, which would be a good definition of “business”
  • State Labor Department Registration if you have employees
  • State Incorporation Filing if you want to operate as a business type other than a sole proprietorship
  • Local Doing Business As (DBA) (also known as Fictitious Name Filing) if your business name is different than your personal name with the type of business, e.g. “Bob Smith Photography.”
  • Local Registration Form for Employers if you are paying wages to one or more employees
  • Local Building and Construction Permits, Land Use, Zoning, Sign Permits if you’re getting really wild.

“Businesses that operate within California are required to register for one or more tax-specific identification numbers, licenses or permits, including income tax withholding, sales and use tax (seller’s permit), and unemployment insurance tax.”
— SBA.gov

“A seller’ss permit allows you to collect sales tax from customers and report those amounts to the state on a regular reporting period.”
CA.gov (California Tax Service Center)


For more information, see business.

Comments

Comments


Reply by Anonymous

January 12, 2016

So, if you are based in San Diego but do a photoshoot in Carlsbad, do you technically need a business license in Carlsbad as well?


Reply by Andrew Hudson, PhotoSecrets

January 13, 2016

No. You just need the one license, for where you are based (in your case, San Diego).


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