What a Business License Actually Costs
There's no single price. Your total is a stack: the state fee to form the entity, a recurring state report or franchise tax, and a local license from your city or county. The state pieces are published and predictable — a Kentucky LLC files for $40, a Massachusetts LLC for $500. The local license is where estimates get soft, because it's set town by town. A city charging a $75 base plus $10 per employee costs a 5-person shop $125/year, before any state fee or industry permit is added on top.
Flat Fee, Per-Employee, or Percentage of Gross Receipts
Local licenses generally follow one of three models. Many small towns charge a flat annual fee, often $50 to $400. Some add a per-employee amount on top of a base. Larger cities — Los Angeles and San Francisco among them — tax a percentage of gross receipts, so a business grossing $400,000 pays far more than one grossing $60,000 for the same license. Which model applies is the single biggest swing in your number, so it's worth confirming before you assume the flat-fee figure applies to you.
The Line Items People Forget
State filing is only the entry ticket. Budget for the local business license, a DBA if you trade under a name that isn't your legal one ($10–$100), a free EIN from the IRS, a sales tax permit if you sell taxable goods, and any industry permit — a restaurant's health permit or a contractor's trade license. California adds an $800 annual franchise tax no matter what you earn. Add roughly 10–20% over the state-level total here to cover these local and industry costs.
Business License Fee Calculator
LLC Filing Fees by State
Initial formation fee and annual report cost
| State | LLC Filing Fee | Annual Report | Corp Filing Fee | Corp Annual Report |
|---|---|---|---|---|
| California | $70 | $800 | $100 | $25 |
| Texas | $300 | $0 | $300 | $0 |
| New York | $200 | $9 | $125 | $9 |
| Florida | $125 | $139 | $70 | $150 |
| Illinois | $150 | $75 | $150 | $75 |
| Delaware | $90 | $300 | $89 | $225 |
| Nevada | $75 | $350 | $75 | $350 |
| Ohio | $99 | $0 | $99 | $0 |
| Georgia | $100 | $50 | $100 | $50 |
| Wyoming | $100 | $60 | $100 | $50 |
How to Use This Calculator
- Select Your State: Pick the state where you'll register the business. This sets the filing fee and annual report cost, which are the firm, published parts of the estimate.
- Choose Your Entity Type: Select LLC, corporation, sole proprietorship, partnership, or nonprofit. This decides whether a state formation fee applies at all — a sole proprietor skips it but still owes the local license.
- Enter Estimated Annual Revenue: Type your expected gross revenue, for example 100000. It only changes the result in gross-receipts cities, but it's what drives the local license there.
- Estimate the Fees: Click the button to stack the state filing fee, annual report, and modeled local license into a first-year total, shown instantly below.
- Verify the Local Piece: Note the state figures as reliable, then take the total to your city or county business portal to confirm the local license before you file.
How It Works
Your total cost is the sum of a few separate line items, and the local business license is the one that varies most from city to city.
The basic rule:
- State filing fee: one-time cost to register your LLC or corporation with the state, usually $50–$500
- Annual report: a recurring state filing to stay in good standing, from $0 in Ohio and Texas up to California's $800 franchise tax
- Local business license: issued by your city or county, often a $50–$400 flat fee, sometimes a base amount plus a per-employee charge, sometimes a percentage of gross receipts
- Entity type matters: a sole proprietor skips the state formation fee but still needs the local license and any DBA
- Industry permits: restaurants add a health permit, contractors add a trade license, and a home business may need a zoning clearance
The state numbers are firm because they come from published fee schedules. The local license line is an estimate — a Los Angeles gross-receipts license and a $50 flat-fee small-town license can differ by an order of magnitude on the same revenue.
Tips & Considerations
- Confirm which local model applies — flat fee, per-employee, or gross receipts — before you trust any single number, because it's the biggest swing in the total.
- If you'll operate in a different state than where you form, budget a second filing fee to register as a foreign entity there.
- Track every renewal date separately: the state annual report and the city license rarely fall due on the same day.
- In a gross-receipts city, run the calculator with a conservative revenue figure first, then again with your target, so you see the range.
- Keep the EIN free — get it directly from irs.gov, not a paid service that charges for the same form.
Frequently Asked Questions
What actually determines how much my business license costs?
Three things: where you operate, what you do, and sometimes how much you make. A city sets its own fee schedule, so the same coffee shop pays one amount in one town and triple that a county over. Regulated trades (food, childcare, alcohol, construction) carry extra permit fees. And in gross-receipts cities, a business grossing $500,000 pays more than one grossing $80,000 for the identical license.
What's the difference between a flat-fee license and a gross-receipts license?
A flat-fee city charges every business the same base — say $100/year — sometimes with a per-employee add-on. A gross-receipts city charges a rate per $1,000 of revenue. For example, at $1.50 per $1,000, a shop grossing $200,000 owes $300. Flat-fee cities are cheaper for high-revenue businesses; gross-receipts cities are cheaper for tiny ones. Always confirm which model your city uses before budgeting.
How much does it cost to start an LLC?
State LLC formation fees run from $40 in Kentucky to $500 in Massachusetts, with most states between $50 and $200. On top of that, plan for the annual report ($0–$800 depending on state) and your local business license. First-year state fees alone are typically $100–$800, before any city license or industry permit.
Do I need more than one license?
Usually yes. A typical setup is a state entity registration (for an LLC or corporation), a general city or county business license, a sales tax permit if you sell taxable goods, a DBA if you use a trade name, plus any industry permit. A single storefront can easily hold four or five separate registrations, each with its own fee and renewal date.
Do sole proprietorships and online sellers need a license?
In most places, yes. A sole proprietor skips state formation filings but still needs the local business license, and a name other than your own requires a DBA ($10–$100). Online-only sellers aren't exempt — cities generally license the business at the owner's address, and you'll likely need a sales tax permit for taxable goods too.
How often do I renew, and what happens if I miss it?
Most local licenses renew annually; some cities offer two- or three-year terms. State annual reports fall either on a fixed date or on your formation anniversary. Miss a state report long enough and the state can administratively dissolve your entity; miss a city renewal and you may face late penalties plus back fees before you can operate legally again.
Are these fees tax deductible?
Generally yes. License fees, state filing fees, and annual report fees are ordinary business expenses and deductible on your return. Keep the receipts — government fees are easy to overlook at tax time. Note that California's $800 franchise tax is a tax, not a deductible license fee in the usual sense; check with your accountant on how to treat it.
How accurate is this estimate?
The state filing and annual report figures come from published fee schedules and are reliable. The local license line is a modeled estimate because tens of thousands of U.S. cities and counties each set their own rules. Treat the total as a planning number, then confirm the local piece on your specific city or county business portal before you file.