Business License Requirements in Texas
Common State-Level Licenses and Permits
Texas does not require a general business license to operate. However, depending on your industry, you'll need specific licenses and permits from state agencies and local authorities before you can legally conduct business.
Sales Tax Permit
You must register for a sales tax permit with the Texas Comptroller of Public Accounts if you sell taxable goods or services. The permit is free and required before you make your first sale. Register online at https://comptroller.texas.gov/taxes/sales/.
Texas charges a 6.25% state sales tax, plus up to 2% in local taxes, for a combined maximum of 8.25%. You'll collect and remit these taxes monthly or quarterly depending on your sales volume.
Employer Identification Number (EIN)
You need an EIN from the IRS if you have employees or operate as a partnership, corporation, or LLC (in most cases). The EIN is free and you can apply online at the IRS website. Even sole proprietors without employees often obtain an EIN to keep business and personal finances separate.
Professional Licenses
Texas requires licenses for specific professions through the Texas Department of Licensing and Regulation (TDLR) and various state boards. Common licensed professions include:
- Real estate agents and brokers — licensed by TDLR
- Electricians and plumbers — licensed by local jurisdictions and TDLR
- Cosmetologists and barbers — licensed by TDLR
- Nurses and physicians — licensed by state medical and nursing boards
- Accountants and attorneys — licensed by state boards
- Contractors and engineers — licensed by TDLR or local authorities
Contact TDLR at https://www.tdlr.texas.gov to determine licensing requirements for your profession. License fees and renewal periods vary by profession.
Food Establishment Permit
If you operate a restaurant, food truck, catering business, or other food service operation, you must obtain a food establishment permit from the Texas Department of State Health Services (DSHS). The permit requires compliance with food safety regulations and health inspections.
Submit your application to your local health department, which coordinates with DSHS. Permits are typically renewed annually.
Alcohol License
You need an alcohol license from the Texas Alcoholic Beverage Commission (TABC) if you sell beer, wine, or spirits. License types include on-premise (bars, restaurants) and off-premise (liquor stores, grocery stores).
TABC requires background checks, local approval, and compliance with advertising and operational rules. Application fees and license costs vary by type and location. Visit https://www.tabc.texas.gov for application details.
Building and Construction Permits
Local city or county governments issue building permits for construction, renovation, or structural changes to property. You cannot begin work without a permit, and inspections are required at various stages.
Contact your city or county building department to apply. Permit costs depend on project scope and location. Some jurisdictions require contractor licensing in addition to permits.
Home Occupation Permit
If you operate a business from your home, your city or county may require a home occupation permit. Restrictions typically apply to signage, customer traffic, and the type of work allowed.
Check with your local city or county zoning office to determine if your business qualifies and what restrictions apply. Permits are usually inexpensive and renewed annually.
Franchise Tax Registration
Texas imposes a franchise tax on most business entities, not a corporate income tax. You must register with the Texas Comptroller of Public Accounts if your business meets the threshold. Under Tex. Tax Code Ch. 171, no tax is due if your annualized total revenue is $2,650,000 or less (2026 threshold).
The standard franchise tax rate is 0.75% of taxable margin, with lower rates for retail and wholesale businesses (0.375%) and an optional EZ computation rate (0.331%). Franchise tax returns are due May 15 each year. Register at https://comptroller.texas.gov.
Industry-Specific Permits and Licenses
Certain industries require additional state or local permits:
- Oil and gas operations — Railroad Commission of Texas permits
- Water and wastewater systems — TCEQ permits
- Childcare facilities — Texas Health and Human Services Commission licensing
- Nursing homes and assisted living — DSHS licensing
- Pesticide application — Texas Department of Agriculture licensing
- Firearms dealers — Federal and state licensing
Contact the relevant state agency for your industry to confirm requirements before launching your business.
Local and Municipal Licensing Requirements
Texas does not require a general state business license. However, local governments and municipalities impose their own licensing requirements that vary significantly by location and industry type.
City and County Business Licenses
Most Texas cities and counties require you to obtain a local business license or permit before operating within their jurisdiction. These requirements are established and enforced at the municipal level, not by the state. You must contact your specific city or county government to determine what licenses apply to your business location.
The cost, application process, and renewal requirements differ by municipality. Some cities charge annual fees ranging from $50 to several hundred dollars, while others may charge based on your business type or revenue. Contact your local city hall or county clerk's office for specific requirements in your area.
Industry-Specific Local Permits
Beyond general business licenses, you may need additional local permits depending on your industry:
Food Service Operations: If you operate a food establishment, you need a food establishment permit from the Texas Department of State Health Services (DSHS), plus local health department approval from your county or city.
Alcohol Sales: Alcohol licenses are issued by the Texas Alcoholic Beverage Commission (TABC). You must also comply with local ordinances, which may restrict where alcohol businesses can operate or impose additional local licensing fees.
Construction and Building: Construction projects require building permits from your local city or county building department. These permits are mandatory before you begin any construction work.
Home-Based Businesses: If you operate a business from your home, many cities require a home occupation permit. Check with your city or county zoning office to determine if your business use is permitted in a residential area and what permits are required.
Professional Licenses
Certain professions require state licenses issued by the Texas Department of Licensing and Regulation (TDLR) or specialized state boards. These include contractors, electricians, plumbers, real estate agents, and many other regulated professions. Visit https://www.tdlr.texas.gov to determine if your profession requires a state license.
Some municipalities also impose local professional licensing requirements in addition to state requirements. Verify with your local government whether additional local permits are needed for your profession.
Sales Tax Permit
You must register for a sales tax permit with the Texas Comptroller of Public Accounts if you sell taxable goods or services. This registration is free and available at https://comptroller.texas.gov/taxes/sales/. The permit is required before you can legally collect sales tax from customers.
Employer Identification Number
If you have employees, you must obtain an Employer Identification Number (EIN) from the IRS. This is free and can be applied for online at the IRS website. You'll need your EIN to hire employees and file payroll taxes.
Next Steps
Contact your city or county clerk's office to request a list of required local licenses and permits for your specific business type and location. Requirements vary significantly across Texas municipalities, so local verification is essential before you begin operations.
Building and Construction Permits
Building and construction permits are issued and regulated at the local level in Texas, not by the state. You must obtain permits from your city or county before beginning any construction, renovation, or structural work on real property.
Local Permitting Authority
Your city or county building department issues construction permits. Texas has no statewide building permit requirement—instead, each municipality sets its own permitting standards, fees, and timelines. Contact your local building official or visit your city/county website to learn specific requirements for your project.
What Requires a Permit
Most construction work requires a permit, including:
- New building construction
- Additions or renovations to existing structures
- Structural repairs or modifications
- Electrical, plumbing, and HVAC installations
- Roofing work
- Foundation work
Minor repairs and maintenance may be exempt. Your local building department can clarify what work requires permitting in your jurisdiction.
Application Process
You'll typically need to submit:
- Completed permit application form
- Detailed construction plans or blueprints
- Proof of property ownership or authorization
- Contractor license information (if applicable)
- Engineering certifications for complex projects
Processing times vary by municipality. Some jurisdictions process permits within days; others may take several weeks.
Contractor Licensing
If you're hiring a contractor, verify they hold a valid license from the Texas Department of Licensing and Regulation (TDLR) at https://www.tdlr.texas.gov. Unlicensed contractors cannot legally perform construction work in Texas.
Inspections and Compliance
After permit approval, you must schedule inspections at various construction stages (foundation, framing, electrical, final). Work cannot proceed to the next phase without passing inspection. Failure to obtain required permits can result in fines, stop-work orders, and difficulty selling the property.
Related State Requirements
While permits are local, you may need state-level licenses or approvals:
- Professional licenses: Engineers, architects, and certain contractors need state licensure through TDLR
- Sales tax permit: Required if you're purchasing materials for a business construction project (free through Texas Comptroller at https://comptroller.texas.gov/taxes/sales/)
- Employer identification number: Required if you're hiring employees (free through IRS)
Contact your local building department first—they'll direct you to any additional state or local requirements for your specific project.
Industry-Specific Licensing Requirements
Texas does not require a general business license to operate. However, specific industries must obtain licenses from state agencies or professional boards before conducting business. The Texas Department of Licensing and Regulation (TDLR) and various state boards oversee these requirements.
Healthcare Professions
You must obtain a license from the appropriate Texas health board if you practice medicine, nursing, pharmacy, or mental health services. These licenses are mandatory before you can legally provide services to patients