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The year 2020 has been a time of great uncertainty for small business owners. But looking ahead to 2021, there is one thing that many small business owners can be certain about: you may need to renew business licenses for your company.
There are many types of business licenses that your business might need, depending on your location and industry. Some business licenses are issued by the state, local or federal governments. Making sure you know how to renew a business license or how to renew business permits can keep your business in good standing with the authorities. When you renew business licenses, you are also investing in the reputation of your company. Many customers prefer to work with businesses that are fully up to date and in compliance with the relevant rules and regulations for your industry.
Here are some details and advice on how to renew business licenses in 2021.
Business License Renewal Depends on Your State
There is no single, simple answer for how to renew a business license. Different states have different regulatory authorities that issue business licenses. Not all business licenses need to be renewed; some licenses exist for as long as your business exists. But some need to be renewed annually or every few years; it depends on what type of business license you have and where your business is located.
Most business licensing authorities should send you a notice if your license is up for renewal or if your license expiration date is approaching. For example, the State of Washington sends a courtesy renewal notice to business owners 45 days before the business’s license is due to expire.
These reminders help your renewals not come as a surprise and give you adequate time to pay any necessary fees or file required forms.
Different License Renewals for Different Types of Business
Even within one state, there can be different rules for business license renewal for different types of businesses.
For example, in California, if you own a contracting business, you are required to renew your contractor’s license. Active licenses expire every two years. Sixty days before your license expiration date, the California Contractors State Licensing Board (CSLB) will send you an application to renew your license. The active renewal fee is $450. If you do not pay your license renewal fee by the deadline, you will have to pay an additional delinquency fee.
California businesses that are regulated by the State Department of Insurance, such as insurance brokers and agents, self-storage companies and rental car companies, can use the state’s Online Renewal Service to renew their Business Entity Licenses.
Some businesses in California, such as trucking companies or convenience stores that sell gasoline, are required to renew their International Fuel Tax Agreement (IFTA) and Use Fuel Tax licenses annually.
In Texas, businesses that need liquor licenses and permits, such as restaurants and bars, are required to renew their licenses after two years. Depending on what type of food and beverage business you run, you might need special liquor licenses and permits. These details will depend on your exact state and city.
For example, some regulatory authorities have different fees and requirements for liquor licenses for catering businesses vs. bars vs. restaurants. If your business has changed since you last got your liquor license, you might need to update your licensure as part of the renewal process.
City Governments Require Business License Renewals, Too
Depending on your type of business and what city you’re in, you might have to renew your license with your local city government. For example, Chicago, Illinois, requires business license renewals for several types of businesses, including vacation rentals, animal grooming, daycare facilities, dry cleaners, mobile food trucks, salons and spas and even home-based businesses. Most Chicago business licenses need to be renewed every two years and require a license fee to be paid as part of that renewal.
Check with your local city government authorities to see if your business might require a renewal of your city business license, even if you are a solo entrepreneur or in an industry that is not heavily regulated. You might owe, or need to renew, a business license.
What If You Don’t Know How to Renew a Business License?
The processes for renewing a business license or permit are not always clear or easy to find. Different states and cities have their own rules and requirements. Especially if it’s been a year or more since you started your business and you’re uncertain about how to renew a business license, start with this quick checklist:
- Check the federal government Small Business Administration: The SBA website has a detailed list of the types of businesses that are regulated by federal agencies. If your business is in any of these industries or areas of operations, you can check with the relevant federal agency directly to see what the federal renewal requirements are for your business license or permit.
- Check with your state regulatory authorities: Every state has its own regulatory authorities for licenses, depending on the type of business. You might be able to get information on renewing business licenses from your state’s Secretary of State, Department of Revenue or Comptroller’s office, or your state’s Economic Development authority. For example, the Washington Department of Revenue and Texas Business Permit Office offer detailed guidance on which businesses need to renew licenses and how it works in those states.
- Check with your local government: In addition to federal and state business licenses, you may need to renew business licenses or permits with your local city or county government. Check with your city and county for more details about what is required for your local area.
Use the Bizee Business License Research Tool
Want to use a quick, free tool to get a full list of business licenses that you might need for your company, based on your industry and state? Check out the free Bizee Business License Research tool. Or for even more help, get the Bizee Business License Research Package to make sure you’re up to date on all the licenses you need for your business at the federal, state, city and county. We'll provide you with a comprehensive package of all the licenses, permits and tax registrations required for your business, as well as the application forms to file with the appropriate licensing authorities. This service can take the guesswork out of how to renew your business licenses and permits and ensure you stay in compliance each and every year.
Ben Gran is a freelance writer from Des Moines, Iowa. Ben has written for Fortune 500 companies, the Governor of Iowa (who now serves as U.S. Secretary of Agriculture), the U.S. Secretary of the Navy, and many corporate clients. He writes about entrepreneurship, technology, food and other areas of great personal interest.
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