How to Apply for a Business License in Iowa

You’re setting up a new business and going through the appropriate registration process for a corporation or limited liability company. But registration alone isn’t enough — you may also need a business license to transact in the state of Iowa.

Staying on top of licensing requirements is tough for any small business owner. This article will guide you through the process so you have everything you need to conduct your business activities.

Iowa Business License: Key Takeaways

• Registering your business in Iowa is not the end of the process; you may also need a business license to conduct your business activities.

• There is no one-size-fits-all business license in Iowa. Your licensing requirements may span state, local, and federal levels, depending on the nature of your business activities.

• In addition to business licenses, certain industries or professions may require professional licenses to ensure qualifications for working in specific fields.

What Is a Business License?

Think of a business license as a certificate that entitles you to do business in a state. It’s usually signed by a relevant authority, such as the Secretary of State or a local government body, and it contains basic information about your company, such as its business name or “doing business as” (DBA) name.

Obtaining a business license isn’t the same as registering your company. You can be registered with the state without having the appropriate licenses, leaving your company unable to do anything.

It’s also worth noting that there is no universal business license. Beyond the general license a state may require, you may also need licenses at the state, local, and federal levels, depending on your business type. 

Your business structure doesn’t impact the need for a license, meaning a sole proprietorship has just as much obligation to get the right business permit or license as a limited liability company.

Get Your Iowa Business License in 7 Steps

You need to get any state business licenses or additional licenses your company requires to do what it does. These seven steps take you through every type of license you may need, from the federal to the local level and beyond.

Step 1: Apply for Iowa General Business Licenses

Some states require a general business license separate from any other licenses you may need to conduct business. The state of Iowa isn’t one of them.

That doesn’t mean you can create any business and immediately start selling without licenses. You may need some of the licenses covered in the following steps. But your small business doesn’t have to worry about having a general license in Iowa.[1]

Step 2: Apply for Federal Licenses for Iowa Businesses

Though you can get away with having no general business license in Iowa, things get more complicated when the federal government becomes involved. There are numerous industries, such as those related to alcohol, firearms, and agriculture, that are regulated by federal authorities and require you to have licenses to operate within them.

A few examples from the U.S. Small Business Administration (SBA) website include:

• U.S. Department of Agriculture license if you import or transport plants, animals, animal products, or similar biological matter

• U.S. Fish and Wildlife Service license if your company engages in anything with wildlife, such as importing and exporting animals

This is far from an exhaustive list of additional licenses, and the SBA website goes into more detail.[2] 

Step 3: Search for Iowa Permits and Licenses

You may not need a general license, and you may not even need federal licenses, but the odds are high that you’ll need specific state licenses or permits for many of your activities in Iowa.

Starting with permits, your business needs to register for individual permit numbers to cover the following:[3]

• Sales and Use Tax

• Withholding Tax

• Fuel Tax

• Water Service Excise Tax

• Household Hazardous Materials

You may also need permits for specific activities, such as a building permit for construction work.

As for additional licenses in the state, you’ll need a Class “C” Retail Alcohol License to sell alcohol or produce alcoholic beverages in the state.[4] The Iowa government website contains a complete list of business activities that may require a state or professional license, including acupuncture, accountancy, and massage therapy.[5]

Step 4: Search for Local County or City Iowa Business Licenses

Now, you have to deal with local county or city ordinances, which may require you to get additional licenses to operate on the local level.

Every city has its rules here, with some potentially requiring you to get a building or sales tax permit unique to the city. Here are a few examples of what you can expect:

• Des Moines: You need a general business license in Des Moines if you’re in or outside Des Moines but selling within city limits and your business generates more than $2,000 annually.[6]

• Cedar Rapids: Cedar Rapids doesn’t have a general business license, but you’ll need a local license to sell alcohol, work in transportation, or serve as a vendor, such as a mobile food business.[7]

The city clerk or tax officer is usually the best person to contact regarding these licenses. They’ll be able to tell you about specific licenses relevant to your business. 

Again, remember that every city has its licensing laws. A license for one city may not be valid in another.

Step 5: Search for Iowa Professional Licenses

Despite sounding similar, a professional license is different from a business license. Where a business license confirms you can do business in a location, a professional license shows you have the qualifications to work in certain industries.

For example, a plumbing company may need a state or local business license to operate. Then, the business owner, and likely any of the plumbers working for the company, will need professional plumbing licenses to work with your clients.

Iowa’s Professional Licensing Bureau oversees the specific professional licenses for several professions, including accounting and real estate.[8] However, some professions may have their own licensing boards through which you need to apply for your license.

Step 6: Apply for an Iowa Home-Based Business License

You can run many types of businesses from home, including daycares, nurseries, and even home-based online retail companies. Thankfully, this type of business isn’t subject to general business license needs anywhere in the state if it’s a no-impact business.

A no-impact home business is a small business that sells lawful goods and services, with the business not having so many employees that it exceeds a city’s home occupation laws. All activities must occur in the house and shouldn’t be visible from adjacent streets or properties.[9]

Assuming you meet those conditions, your city can’t ask you to apply for a home business license. That doesn’t mean you won’t need additional licenses based on what the business does, just that you won’t need a specific business license for being home-based.

Step 7: Maintain Your Iowa Business License

State, local, or federal licenses require regular maintenance and renewal for you to stay in good standing. One example of many is the city of Davenport, which charges an annual $50 renewal fee for an alarm business license.[10]

There are many more licenses that you have to renew, but staying on top of those requirements is tough for a busy business owner. If you’d like to remove this extra hassle from your plate, we’ll take care of your business license maintenance.

Apply for an Iowa Business License Online

Whether you’ve handled the registration of your new business with the Iowa Secretary of State or not, you still need to sort out business license applications at the state, local, or federal level.

We can help with our Business License service, taking you through every stage of the process for getting the business licenses you need in Iowa. Plus, we keep you updated about renewals and ensure that compliance won’t ever be an issue for your company. Try our Business License service today to get started.

FAQs

How do I get a business license in Iowa?

You can usually get a business license in Iowa by applying online via the relevant overseeing organization’s website or by completing and mailing a paper application.

Does Iowa require a general business license?

No, Iowa doesn’t require a general business license for your company. However, you may still need federal, state, or local licenses.

Can you sell things in Iowa without a license?

You need a Permanent Tax Permit to sell anything in Iowa. You can’t sell things in Iowa without this license.[11]

Do I need a special license for an online business in Iowa?

Iowa doesn’t have a special license for online businesses, though you may need state or local licenses depending on your activities and location.

Can I collect sales tax in Iowa without a license?

No, you need a Sales Tax Permit to collect sales tax in Iowa.[12]

How much does an Iowa business license cost?

The costs of the federal, state, or local licenses your business may need vary depending on which you require. 

What’s the penalty for not having a business license in Iowa?

Penalties for not having relevant federal, state, local, or professional licenses can range from fines to being barred from your profession within the state.

Bibliography

1. Iowa Economic Development Authority. “Helping Businesses Learn About Iowa Licensing Requirements.” Accessed July 19, 2023.

2. U.S. Small Business Administration. “Apply for Licenses and Permits.” Accessed July 19, 2023.

3. Iowa Department of Revenue. “Permit Registration Overview.” Accessed July 19, 2023.

4. Iowa Alcoholic Beverages Division. “Which Licensing System Should I Use.” Accessed July 19, 2023.

5. Official State of Iowa Website. “Licenses & Permits.” Accessed July 19, 2023.

6. City of Des Monies, WA. “Business Licenses.” Accessed July 19, 2023.

7. Cedar-Rapids.org. “City Clerk Licenses and Permits.” Accessed July 19, 2023.

8. Iowa Professional Licensing Bureau. “Iowa Professional Licensing Bureau.” Accessed July 19, 2023.

9. Casetext. “Iowa Code § 414.33.” Accessed July 19, 2023.

10. The City of Davenport. “Business Licenses.” Accessed July 19, 2023.

11. Iowa Department of Revenue. “Iowa Business Tax Permit Registration 78-005.” Accessed July 19, 2023.

12. America’s SBDC Iowa. “Do I Need an Iowa Sales Tax Permit?” Accessed July 19, 2023.