Illinois licensing and permitting

How to Apply for Business Licenses and Permits in Illinois

Our business license report can help you determine what licenses and permits you need to start a business in Illinois.

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Starting your own business in Illinois is an exciting time. But along with that excitement comes the stress of making sure you take care of all the necessary paperwork to make your business compliant with state, local, and federal law. An important part of this is obtaining the right licenses and permits. Even though this seems like a monumental task, we are here to help. Let’s take a look at what licenses and permits you might need for your Illinois business, and how our Business License Report service can help you get it done easily.

Need to form your Illinois business first? Head over to our Illinois LLC formation and corporate formation pages to see how quick and easy it can be.

What is a business license?

A business license grants permission from a government entity to operate a business. Your business might require licensing from the local, state, and/or federal government before you can open your doors. Your need for business licenses depends on the industry you’re in, your business activities, and your location. Some states also require a general business license to do any kind of business within their jurisdiction. 

There are many different licenses and permits your business might need, but there isn’t a central place you can look to find all of them. This means that you generally need a lot of time to research all of the licenses and permits your business needs and how to get them.

Even in states that don’t require a statewide business license, local government agencies may require that you obtain a license or a permit to operate specific kinds of businesses. Unfortunately, though, there’s no one place where you can look to find all the different licenses or permits that you would need from different levels of government.

Fortunately, our Business License Report can be a huge help. This report uses your location, industry, and business type to compile a list of local, state, or federal requirements that your company will need to operate.

Step 1: Search for any necessary Illinois general business licenses

The state of Illinois doesn’t require a general business license. Many local jurisdictions, however, such as counties or cities, may require a general business license to operate within their borders.

It’s also important to remember that obtaining a business license or permit isn’t the same as registering your business, even if some people inaccurately describe it as “obtaining a business license.” The Articles of Incorporation for a new corporation, or the Articles of Organization needed for a new limited liability company (LLC), are documents you file to officially establish your business with the state and are separate from obtaining the correct permits and licenses to operate those businesses in Illinois.

Step 2: Obtain applicable federal licenses for your Illinois business

Let’s look at the licenses or permits that are required at the federal level. You can find out more information about these licenses and permits on the Small Business Administration’s website.

  • Agriculture. Importing or transporting animals or animal products, or even plants across state lines, requires a permit. It needs to come from the U.S. Department of Agriculture.
  • Alcoholic beverages. If you make, sell, or transport them, you’ll need to get a license from the Alcohol, Tobacco Tax, and Trade Bureau. (You also need to get a state liquor license.)
  • Aviation. If you operate or maintain aircraft, or transport goods or people via air, you’ll need to speak with the Federal Aviation Administration.
  • Firearms, ammunition, and explosives. This covers the manufacture, importing, or deals for these items. The relevant agency is the Bureau of Alcohol, Tobacco, Firearms, and Explosives.
  • Commercial fisheries. Any kind of commercial fishery needs to deal with the National Oceanic and Atmospheric Administration Fisheries Service.
  • Wildlife. Any wildlife-related activity requires a license or permit from the U.S. Fish and Wildlife Service.
  • Maritime transport. If your business provides ocean transportation or the shipment of cargo by water (think of a port of Chicago accessible by the Great Lakes), it is regulated by the Federal Maritime Commission.
  • Mining and energy. Drilling for natural gas or oil or searching on federal lands for mineral resources involves the Bureau of Safety and Environmental Enforcement.
  • Nuclear energy. Producing commercial nuclear energy, operating a fuel cycle facility, or disposing of nuclear waste requires a permit/license from the U.S. Nuclear Regulatory Commission.
  • Radio and television broadcasting. Broadcasting information by radio, television, wire, satellite, or cable requires a license from the Federal Communications Commission.
  • Transportation and logistics. Operating an oversized or overweight vehicle requires a permit. These permits are not issued by Illinois, but the U.S. Department of Transportation can direct you to the correct office.

It’s important to be aware of all the characteristics and needs of your business because you might need licensing from more than one federal agency to operate. 

Step 3: Check for Illinois permits and licenses

Although Illinois does not require a statewide business license, there are still some permits or licenses that you’ll need to obtain from the state depending upon the kind of business you operate or work in.

For instance, medical emergency service personnel need to be licensed by the state. If you intend to sell hearing aids, operate an assisted living facility, or use your nursing degree obtained from a foreign country, you’ll need to be licensed by Illinois.

For an overview of the state’s required licenses or permits, visit the Registration, Licenses, and Permits page on the Illinois government’s website. Keep in mind that the page won’t provide you with an exhaustive listing of the permits or licenses that you might need because it doesn’t include what you’ll need on the local level.

Step 4: Check with the city or county for local licensing in Illinois

Many counties, cities, and towns in Illinois require certain businesses to obtain permits before they can operate in their jurisdiction. You can check with your municipality’s official website, the office of the county clerk, and your local tax office to find out if your business requires you to obtain certain permits or licenses.

Here are a few examples of Illinois cities and towns that require specific licenses or permits. Please note that this is not a complete list for each jurisdiction.

  • Aurora: Running a pawn shop, a bar, a restaurant that sells liquor, or a secondhand store means you’ll need to get a license.
  • Chicago: Illinois’s largest city operates a Small Business Center that issues licenses and permits. The Small Business Center’s oversight covers retail stores, any kind of establishment selling food (from restaurants to pushcarts), manufacturing facilities, bed-and-breakfast accommodations, and animal grooming shops.
  • Rockford: If you operate a bowling alley, a junkyard, an adult entertainment facility, or a towing service, you’ll need a license in Rockford.

Step 5: Search for applicable Illinois professional licenses

Certain licensed professionals are required to obtain and maintain a professional license in the state. Examples include obvious careers like doctors and lawyers, but less obvious areas also require special permits, such as medical marijuana dispensaries, design firms, and home inspectors.

You can find out more about the professional licenses you may need by visiting the Illinois Department of Financial and Professional Regulation (IDFPR). It is Illinois’s primary licensing agency for professionals.

Step 6: Obtain any other necessary Illinois business licenses and permits 

There are a variety of other business licenses and permits that you may need in Illinois, some on the state level but many others on the local level. For instance, local jurisdictions may have zoning laws, which means you can only operate your business in certain sections of the city or town. You may need an environmental or a health permit. You will certainly need to obtain a permit if you plan to build a location for your business.

The Sales Tax Permit is a particularly important state-level permit to know about. You’ll need this permit if you plan on hiring employees, or if you sell products or certain services that require you to collect withholding taxes. Known as an Illinois Business Registration Application (Form REG-1), it is filed with the Illinois Department of Revenue; you can do so on the state’s MyTax Illinois page. After filing, you’ll receive an Illinois Business Tax Number that you’ll need to use in your future dealings with the Department of Revenue.

You can check the Department of Revenue’s Sales and Regulated Tax Form page to see if your business requires you to collect taxes. This includes taxes on things like aviation fuels, adult entertainment, rental purchase agreements, and recycling tires.

Step 7: Apply for Illinois home-based business licenses

The kind of business that you operate from your home will determine if you need a license or permit (or if you can even legally operate your business out of your home). For instance, if you plan on doing clerical work or any occupation that involves writing, such as journalism or copy editing, you may not need any kind of license or permit.

Otherwise, most licenses or permits are required on a local level. This includes permits for signage (for example, permits may govern whether you can have a sign for your home-based business and how large it can be) and fire permits (which determine occupancy for home-based daycare operations and other places where people gather in numbers that could potentially cause evacuation problems during a fire).

Local jurisdictions have different rules about what you can or can’t do from your home. Some won’t allow certain businesses to be conducted from your home. For instance, in the city of Chicago, you can’t operate a dance studio in your home, groom animals, or do astrology readings.

You also can’t run a catering business, a funeral home, or do firearms training or personal services, such as hair care, or run a dispatch service. You can get a complete listing of Chicago-specific home-based restrictions on the Chicago Small Business Center website.

Step 8: Maintain your Illinois licensing

When you’re in the process of obtaining the permits or licenses that you’ll need to run your business in Illinois, it’s also a good idea to check how often these licenses and permits need to be renewed.

You won’t need to renew something like your Illinois Business Tax Number — once you’ve received it, you have it for as long as you operate that business. If you run a bed-and-breakfast in Chicago, however, you’ll need to renew your license every two years.

If you’re worried about keeping track of all the due dates and renewal requirements for your licenses, we can help with our Worry-Free Compliance service. This service sends alerts for important compliance and filing events, supports your annual filings and up to two yearly amendments, and provides expert support should you miss a filing event and need to regain your good standing and legal protections from the state.

Let us help keep your Illinois business running smoothly

There’s a lot to keep up with when you run a business, and the sheer amount of responsibilities can be maddening. Researching your business licensing and permit obligations to make sure you have everything covered can add another overwhelming task to your list of to-dos. Fortunately, through our Business License Report and Worry-Free Compliance service, we can supply you with the tools and support you need to keep your Illinois business state-compliant.

Disclaimer: The content on this page is for information purposes only, and does not constitute legal, tax, or accounting advice. If you have specific questions about any of these topics, seek the counsel of a licensed professional.

FAQs

  • Do all Illinois businesses need a license?

    There is no statewide business license in Illinois. You may need licenses or permits, however, on federal, state, or local levels for some businesses.

  • Can you sell things without a license in Illinois?

    No, you cannot. If you operate a business, it’s illegal to sell anything in Illinois without first obtaining a Business Tax Number from the Illinois Department of Revenue.

  • Is it legal to run a business from home in Illinois?

    In some cases, yes, and in some cases, no. It depends on the rules and regulations in your local jurisdiction and what kind of business you’re operating. Check the Chicago Small Business Center website for relevant regulations in Chicago proper, or check with your local jurisdiction if you’re outside of Chicago.

  • What kind of license do I need for an online business in Illinois?

    It depends on what kind of online business you intend to run. In many cases, your online business will need the same permits and licenses as a brick-and-mortar business, especially if you’re selling products or certain services.

  • Do I need a license to collect sales tax in Illinois?

    Yes, you’ll need an Illinois Business Tax Number from the Illinois Department of Revenue. This is the same number that you need to sell products in Illinois.

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