District of Columbia business license

How to Apply for Business Licenses and Permits in the District of Columbia

Our business license report can help you determine what licenses and permits you need to start a business in the District of Columbia.

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Because of its unique designation as a district, D.C. doesn’t have any of the traditional state municipal governments, such as cities or counties. What this means for licensing and permitting matters is that the District of Columbia and federal governments are the only governing bodies of the district.

While forming your business, obtaining a federal tax identification number, and developing a business plan are essential steps to starting your business, you still need to get all your proper licenses and permits. Read on to learn more about what licenses and permits you might need in Washington D.C., and how our Business License Report service can help you get it done easily.

What is a business license?

A business license is a government authorization, issued either by a state, city, or county that allows a business to lawfully operate. Business licenses can be as broad as the permission to exist in a state or as narrow as offering a specialized service, like home healthcare. In addition, it’s not uncommon for two agencies (the state and county, for instance) to require a license or permit for the same activity.  A good example of this duplicate requirement is a sales tax permit from both the state and the county.

Given the dizzying maze of agencies, exemptions, and definitions that leave many well-intentioned businesspersons guessing, we’ve made this daunting task easier by walking you through the process. 

Step 1: Obtain a District of Columbia privilege license

The District of Columbia channels almost all its business licensing and permitting requirements through its Department of Consumer and Regulatory Affairs (“DCRA”). Step 2 guides you through the DCRA process. 

Step 2: Search for any necessary District of Columbia general business licenses

Most businesses in D.C., which aren’t operated by professionals (see Step 3 for professionals), must apply for a basic business license (BBL) from the DCRA. To apply for a business license in the District of Columbia, you need to list in the BBL application the categories that describe your business’s activities. D.C. refers to these categories as “endorsements” (which we will do from now on too) because the DCRA submits your application for approval (in other words for an “endorsement”) by each internal agency that oversees an endorsement. The endorsements covered by the BBL are numerous and can be found on the D.C Law Library’s website.

If you don’t see your endorsement, then you may need to apply for a general business license (GBL) under the BBL. Let us explain this confusing point. The GBL acts as a quasi-sublicense in the form of an endorsement under a BBL. As such, the practical effect is that you still apply for a BBL but you only need the broad GBL endorsement. 

Next, D.C. requires you to complete the following steps before you apply for a BBL: 

  • Register your business—this means either form your business with D.C. or register your foreign business with D.C.
  • Register any trade name—if you plan to operate your business under any name other than your company name (if it’s a corporation or LLC) or your own name (if you’re a sole proprietorship), you will need to complete this step.
  • Register with the Internal Revenue Service and D.C. tax office—this is for your federal tax identification number and any applicable D.C. tax permits (see Step 7). 
  • Apply for a “Clean Hands Certificate”—this form states you don’t owe taxes or fees greater than $100 to D.C. 
  • Apply for a Certificate of Occupancy or Home Occupation Permit—whether you operate out of a commercial space or your home, you will need one of these.

Once you have all of the above, you’re ready to apply for a BBL. Some of these pre-BBL application documents will take time, so be sure you keep that in mind when planning your business’s grand opening.

Finally, we want to point out that getting a business license isn’t the same as registering your business. Each is a distinct and separate activity. Obtaining a business license allows your business to operate. But if you want your business to have specific protections as a registered entity, such as a corporation or limited liability company, you must follow the appropriate steps to register it with the District of Columbia.

Step 3: Obtain applicable federal licenses for the District of Columbia

The federal government is the second body that regulates your business in D.C. Review the below list of federal agencies to help you acquire the correct federal licenses and permits. Keep in mind that you may require a similar license or permit from both the D.C. and federal government, and not just one or the other.

Common federal licenses and permits are for:

  • Do you transport animals, animal products, biologics, biotechnology, or plants across state lines? Then check with the U.S. Dept. of Agriculture.
  • Do you manufacture, wholesale, import, or sell alcoholic beverages? Then check with the Alcohol and Tobacco Tax and Trade Bureau.
  • Do you operate aircraft, transport goods or people via air, or conduct aircraft maintenance? Then check with the Federal Aviation Administration.
  • Do you manufacture, deal, or import firearms, ammunition, or explosives? Then check with the Bureau of Alcohol, Tobacco, Firearms and Explosives.
  • Do you engage in wildlife-related activity, such as the import or export of wildlife and derivative products? Then check with the U.S. Fish and Wildlife Service.
  • Do you engage in commercial fishing of any kind? Then check with the National Oceanic and Atmospheric Administration Fisheries Service.
  • Do you engage in ocean transport or facilitate transport of cargo by sea? Then check with the Federal Maritime Commission.
  • Do you drill for natural gas, oil, or other mineral resources on federal lands? Then check with the Bureau of Safety and Environmental Enforcement.
  • Do you engage in the production of commercial nuclear energy, operation of a fuel cycle facility, or distribution and disposal of nuclear materials? Then check with the U.S. Nuclear Regulatory Commission.
  • Do you broadcast information by radio, television, wire, satellite, or cable? Then check with the Federal Communications Commission.
  • Does your business involve transportation and logistics? permits for oversized and overweight vehicles are issued by the D.C. government, but the U.S. Department of Transportation can direct you to the correct office (U.S. Department of Transportation).

Although this list is thorough, we encourage you to check with other federal agencies that may govern your business.

Step 4: Check for District of Columbia license and permits

All the D.C. licenses and permits needed to operate a business, aside from those listed in Step 7, are streamlined through the DCRA. 

Step 5: Check for city and county local licensing in the District of Columbia

As mentioned in the introduction, since D.C. is a unique government territory in the United States it doesn’t have any cities or counties. All typical city and county licenses or permits are covered by the DCRA.

Step 6: Search for applicable District of Columbia professional licenses

If you’re a professional, like a doctor or lawyer, or have an occupation, such as barber or real estate agent, regulated by D.C. or the federal government, you don’t need to apply for a BBL.  Rather, your business is regulated under your professional or occupational license. To find out whether you qualify for this exemption from the BBL, go to the dcra.dc.gov to check whether your profession or occupation needs a license. To help, we’ve listed below the more common licensed professions and occupations:

  • Architects
  • Barbers, body artists, and cosmetologists
  • Certified public accountants
  • Engineers
  • Real estate agents
  • Real estate appraisers
  • Security guards

Note that lawyers and healthcare professionals are regulated separately by the D.C. Bar Association and D.C. Health, respectively.

Step 7: Obtain any other necessary District of Columbia business licenses and permits

There may be several other licenses and permits that you might need from D.C. For instance, you may need a zoning or building permit, an environmental permit, a permit for a sign, or perhaps a type of health permit. Starting with the DCRA, research the D.C. government websites to help you get any miscellaneous licenses and permits. 

After that, determine whether you need a sales tax permit. This is extremely important because operating a business without the proper tax permits can be very costly. Carefully review the requirements of both the Office of Tax and Revenue (OTF) and also at mytax.dc.gov. Finally, review the requirements of the OTF for online sales to determine any online sales tax obligations (D.C. categorizes online sales as “remote seller” sales). 

Step 8: Apply for home-based business licenses

If you plan to run your business out of your home, you need to apply for a Home Occupation Permit (HOP). D.C. has streamlined this application process for certain businesses. If your business falls into one of the below categories you can file a joint BBL – Expedited Home Occupation Permit application:

  • Businessperson
  • Salesperson
  • Independant consultant
  • Writer
  • Journalist
  • Typing, word processing, or computer programming services
  • Telemarketing

If you don’t fall into one of these categories, then file separately for a HOP as a pre-application requirement for a BBL. The HOP will walk you through the limitations and requirements to qualify for a home-based business.

Step 9: Maintain your District of Columbia licensing

After all the efforts you have made to get your licenses and permits from D.C., it’s natural to consider your task finished. This is dangerous. Virtually every license or permit will need to be renewed at some point, and renewals frequently require more than just a fee payment, such as recertification or providing proof of compliance. Therefore, we suggest that you note in your business calendar the expiration dates of your licenses or permits and then give yourself plenty of time to renew each one. 

We can help you get your licenses and keep them current

We totally get the importance of license and permit compliance, and we know how important they are in running a good and profitable corporation or LLC. Because of that, we offer a Business License Report service and Worry-Free Compliance service that can help with these mundane aspects of your business, so you can concentrate on offering goods and services that you believe in to customers you care about. Let us help you get your District of Columbia business license and stay compliant, so you can grow in sales and service.

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 District of Columbia businesses need a license?

    Virtually all businesses in D.C. need some form of business license. The most common form is the basic business license (BBL).

  • Can you sell things in D.C. without a license?

    Yes, but you must apply for an exemption from the BBL requirement. In general, if your sales are less than $2,000 and you engage in selling for 30 days or less per year, you don’t need a business license.

  • Is it legal to run a business from a home in D.C.?

    Yes. However, you must obtain a Home Occupation Permit (HOP). For certain business activities, this process can be streamlined. The HOP application needs to outline whether your business qualifies.

  • What kind of license do I need for an online business in D.C.?

    Depending on the volume and revenue of your sales, you will likely need to register your business with the District of Columbia and get a sales tax permit.

  • Do I need a sales license to collect sales tax in D.C.?

    Yes. If you collect sales tax in D.C. you will also need a business license. The best place to start this process is with the Office of Tax and Revenue for registering a new business.

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