If you’ve started a business as a side hustle and made a little money, then congratulations! You have a business. If you want to continue to make money, you may have asked yourself, “Do I need a business license?” In short, you might!
Getting a business license and understanding business tax can make aspiring entrepreneurs feel nervous. This article explains the business license basics, how to apply for a business license, and what to expect when filing business tax renewals.
Why Get a Business License?
Your business license validates your business and gives you the proper documentation to have access to resources such as business loans.
Businesses are regulated by the government because it gives your local government notice of what you’re doing, and it helps them make sure you’re not doing any public harm. It will also become a source of revenue for your city or county. Since the community depends on local businesses to supply income to schools, libraries, and other publicly funded systems, you may have to pay penalties if you don’t register a business license.
How To Get a Business License?
1. Have a business name and determine your business structure.
You must have a name and have an understanding of what you want your business to do when you apply for a business license.
2. Visit your local county office’s website to learn what you need for your business license.
Each state, county, and city have different regulations. Each industry can even have individual requirements, which is why you must research your specific area and business industry.
3. Fill out the required forms.
Fill out the forms from your local city’s office or online. The Small Business Administration has resources to help you find what you need for your state, federal, and industry permits.
4. Pay your fee.
Your fee will probably be between $25-50, but it can range depending on the agency. Some licenses and permits expire, so you’ll also pay a fee to renew your license or apply for a new one.
Renew Businss License/Tax Renewal
Your business tax is based on how much gross income your business produced in the tax year. Any person who has a business is required to pay the tax. You must renew your business tax every year.
1. Check your city tax renewal process.
Most cities mail tax renewal applications to businesses as a courtesy. In most cases, business licenses expire in December and need to be renewed before mid-February. You can renew them by mail, in-person or online.
2. Fill out your application.
You can mail the tax receipt back by mail, do it online, or do it in person. It’s the business owner’s responsibility to turn the application in before the expiration date to avoid penalties.
Whether you’re starting your business at home or opening up a store on Main Street, understanding business license and tax renewals will keep your conscience clear and make you a responsible business owner.