What Business Licenses and Permits are Needed in Illinois?
Starting a business in Illinois will mean potentially registering with a number of federal, state, and local agencies. Let’s take a look at common licenses and permits a business will register for in Illinois.
Before applying for any licenses, the business entity will first need to be established. Learn more about the differences between the sole proprietorship, general partnership, corporation, and Limited Liability Company (LLC).
Related: Comparison of Business Entities
General Business License
There is no general state of Illinois business license, however, many cities require businesses to be licensed to operate. Rules for business registration vary depending on location and what the business does. Below are a few cities that have licensing requirements.
Chicago – The Small Business Center issues business licenses for businesses operating in the City of Chicago, regulating industries such as retail stores, food establishments, day care centers, manufacturing facilities, auto repair shops, and many more.
The cost of a business license in Chicago can be pretty high, ranging from $165 for a day care facility to as high as $6,600 for caterers located outside of city limits.
Aurora – The City of Aurora requires a business license for liquor establishments, pawn shops, second-hand stores, home-based day cares, and more.
Rockford – Businesses such as junk yards, towing services, bowling alleys, and more will need to register with the city. Costs for a business license in Rockford vary but range from $50 for a massage establishment to over $1,600 for a business offering adult entertainment.
Joliet – Business registration is required for any company operating in the corporate limits of the city. Additionally, certain businesses such as billiard halls, food service establishments, tattoo artists, ice cream trucks, and more have to register with the City Clerk’s Office.
Springfield – The City Clerk’s Office issues business licenses for entities operating bowling alleys, florists, funeral homes, and more. The filing fee for most business licenses in Springfield is less than $50.
Building & Zoning Permits
Zoning – Depending on the location of the business, it’s important to verify whether the business needs an occupancy permit or has specific zoning district regulations to follow. Depending on city requirements, home-based businesses may need to apply for a home occupation permit.
Building Permit – A building permit may be needed from the city or county building and planning department if there is any construction or renovations to a facility.
Signage Permit – Some municipalities require a permit before adding signage.
Business Tax Number
The Illinois Business Tax Number (IBT) is an identification number issued by the Illinois Department of Revenue. Sometimes known as the REG-1 Form, the Illinois Business Registration Application is needed for businesses hiring employees, buying or selling products (sometimes referred to as getting a sales tax permit), or manufacturing goods.
There is no cost to register for an Illinois Business Tax Number, and it is usually processed in 2-3 business days.
Businesses purchasing merchandise to resell will usually want to obtain an Illinois Resale Certificate in order to not pay sales tax for merchandise that is being resold to customers.
A variety of professions in the state are regulated and need to be registered before offering certain services. A few common professions that require licensing in Illinois include; physical therapists, interior designers, detectives, cosmetologists, barbers, massage therapists, and many more. Additional information, fees, and licensing requirements for professions are available from the Illinois Department of Financial and Professional Regulation (IDFPR).
In addition to professional licensing, there are a few other types of businesses that need licensing that are not covered by IDFPR, a few of which include:
Businesses selling liquor
Employer Identification Number (EIN)
Many businesses will register with the Internal Revenue Service (IRS) for an EIN (also referred to as a FEIN, Federal Employer Identification Number, or Federal Tax ID Number). The EIN is the business equivalent of a Social Security Number for an individual. Corporations, Limited Liability Companies, Partnerships, and Sole Proprietorships with employees will all need to register for one. Sole Proprietorships without employees can use the owner’s Social Security Number.
There is no cost for an EIN, and it only takes a few minutes to get.
Assumed Business Name Registration
While not a license, it’s common for Sole Proprietorships and Partnerships operating under a business name that is different from the full name of the owner(s) to register for an Assumed Name (also known as a Doing Business As, DBA, Fictitious Business Name, or Trade Name) with the County Clerk’s Office in the county where the business is located.
These are just some of the most common business licenses a new business will need to register before starting. Before starting your business, be sure to check with City Hall, County Clerk, Chamber of Commerce, and/or Economic Developer in your area to get more information regarding business licensing.