How to Apply for a Business License in Kentucky

As a prospective new business owner in Kentucky, you need to know one thing — do you need a business license?

It’s a more complicated question than it seems, regardless of whether you have a corporation or limited liability company (LLC). Let’s explore when you need a license and what you must do to get one.

Kentucky Business License: Key Takeaways

• A business license allows you to conduct business activities in a particular area, and you may need various federal, local, and professional licenses depending on the nature of your business.

• While Kentucky doesn't mandate a general business license, different cities and counties might require specific professional licenses for certain industries. 

• Business owners must stay informed about the renewal requirements for their licenses, which can vary depending on the license type and location. 

What Is a Business License?

A business license is a license to conduct business in a specific area. It permits you to do something you can’t do without it.

You may require a federal or state license to work in some industries, and many towns and counties have local licenses for certain sectors.

As for what a business license contains, it will generally specify your business name or your doing business as (DBA) name, along with an explanation of your type of business. It will also be signed by an authority figure, such as a Secretary of State, to grant permission for you to do business.

Get Your Kentucky Business License in 7 Steps

Do you know your business license from your occupational tax certificate? These eight steps ensure you get the right licenses, including any additional licenses you need from the local city government.

Step 1: Apply for Kentucky General Business Licenses

Regardless of your type of business, whether it’s an LLC or a sole proprietorship, the Kentucky OneStop Business Portal states that Kentucky doesn’t require a state general license for businesses.[1] 

But that doesn’t guarantee you need no license at all. Many cities and counties in the state of Kentucky require you to have a professional license for specific industries.

Step 2: Apply for Federal Licenses for Kentucky Businesses

You may need a federal license if a federal agency regulates your business. Examples include:

• The Securities and Exchange Commission

• The Department of Agriculture

• The Bureau of Alcohol, Tobacco, and Firearms (ATF)

• The Federal Communications Commission 

You can find a full list of federal licenses on the U.S. Small Business Administration (SBA) website.[2] As a business owner, you must work with the appropriate federal agency if your new business works in one of the industries highlighted by the SBA.

Step 3: Search for Kentucky Permits and Licenses

Even though Kentucky does not have a general business license, you may still need a state license to conduct certain forms of business in Kentucky. 

Selling alcoholic beverages is a good example. Getting your federal license is your first step, but you must also get an alcohol permit from Kentucky’s Department of Alcoholic Beverage Control.[3]

Another example comes from environmental permits. Any business activity that leads to you creating air emissions, discharging water waste, or generating and disposing of hazardous waste requires a permit in the state of Kentucky.[4] Working with the Division of Compliance Assistance is recommended in these cases.

If you need a building permit, you must get one from the Kentucky Department of Housing, Buildings, and Construction. 

The list goes on. In short — you may need specific permits and licenses for certain activities in Kentucky, most of which you can find via the state’s OneStop portal.

Step 4: Search for Local County or City Business Licenses

Local county or city licenses, such as a building permit or sales tax permit, are required regardless of whether you have a federal or state license for the same activity.

Examples of cities or counties that have their own business licenses include:

• Louisville: You must get building permits if you work in any industry that constructs, remodels, or removes buildings, especially when dealing with zoning.[5]

• Bowling Green: All businesses in Bowling Green have to register with the Office of Occupational License and potentially get specific permits based on their business activity.[6]

• Lexington: You must register for a business permit called an occupational license if you set up shop in Lexington.[7]

These are just three of many examples throughout the state, with each city or county usually having its own licenses you need in addition to federal and statewide permits. It’s a good idea to speak to your city’s local tax office or a county clerk to learn more, as they can usually point you toward any professional licenses or permits you need.

Step 5: Search for Kentucky Professional Licenses

A professional license isn’t the same thing as a state license. Though you still need it to do business in Kentucky, it only applies if your industry requires you to have professional certification. 

For example, plumbers need to obtain either a Journeyman or Master license, which requires an exam completion from the Department of Housing, Buildings, and Construction.[8]

Doctors and lawyers must have licenses to practice in the state and are restricted to only working in states for which they have a professional license.

A professional license doesn’t automatically cover the state or local licenses you need. For instance, a contractor who does both plumbing and construction will need their Journeyman or Master license and any relevant permits from the state for their building work.

Step 6: Apply for a Kentucky Home-Based Business License

Kentucky doesn’t have a statewide license for those running a home-based business. But again, that doesn’t mean you don’t need a license at all. You may need permission to run a company from home at the city or county level.

For example, childcare and family child learning home-based businesses will likely need special licenses.

Step 7: Maintain Your Kentucky Business License

Many business licenses aren’t “one and done.” In other words, you often need to renew them regularly or update your licenses when your company expands into new areas. 

For example, you must pay an annual fee of $100 to maintain your occupational license certificate in Lexington.[9] Failure to pay leads to your license getting revoked.

Staying on top of specific renewal requirements is a tough task, especially as they change between counties and cities. We can handle the filing side for you, ensuring you stay in good standing with Kentucky, its Secretary of State, and its local municipalities.

Apply for a Kentucky Business License Online

It’s clear that you may need several other types of licenses at the federal, local, and professional levels before you can get your new business up and running.

Thankfully, our Business License service can help you determine what licenses you need and help with your filings. Start today in as little as 10 minutes, and your small business will soon have the required licenses and permits.

FAQs

How do I get a business license in Kentucky?

You don’t need to apply for a general business license in Kentucky. However, you may have to apply through the relevant state, federal, local, or county body to get the required licenses for your business.

Does Kentucky require a general business license?

No, Kentucky doesn’t require any business entity to have a general business license.

Can you sell things in Kentucky without a license?

You can, assuming you don’t need any federal, state, or local licenses. However, you must register to pay sales and use tax. There is a statewide sales tax of 6% on most types of goods.[10]

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

No, you don’t need a special license. However, you may need federal, state, or local licenses and must register to pay sales and use tax.

Can I collect sales tax in Kentucky without a license?

No, you must be registered to pay sales and use tax with the state.

How much does a Kentucky business license cost?

The cost of your Kentucky business licenses will depend on the type of license. Kentucky does not require a general business license.

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

Penalties attached to specific licenses vary, ranging from fines to forced business closure.

Bibliography

1. Kentucky Business OneStop. “Occupational Licenses/Permits.” Accessed July 18, 2023.

2. U.S. Small Business Administration. “Apply for Licenses and Permits.” Accessed July 18, 2023.

3. Kentucky Department of Alcoholic Beverage Control. “Licensing.” Accessed July 18, 2023.

4. Kentucky Business OneStop. “Permits, Licenses, and Renewals.” Accessed July 18, 2023.

5. LouisvilleKy.gov. “Building Permits.” Accessed July 18, 2023.

6. Bowling Green, KY — Official Municipal Website. “Office of Occupational License.” Accessed July 18, 2023.

7. LexingtonKy.gov. “How to Start a Business in Lexington.” Accessed July 18, 2023.

8. Department of Housing, Buildings and Construction. “Plumbing Licensing Examination.” Accessed July 18, 2023.

9. LexingtonKY.gov. “Occupational License Fees – Minimum License Fee.” Accessed July 19, 2023.

10. Kentucky Department of Revenue. “Sales & Use Tax.” Accessed July 19, 2023.