There is no general business license required by Iowa, which means that not all businesses must have a business license. However, some companies are required to obtain a license depending on what they do and the industry they are in. One of the most common licenses required is a sales and use tax permit. The sales and use tax permit allows you to collect and pay 6% state sales tax to the Department of Revenue.
Many professions also require a business license. The Iowa Office of Professional Licensing handles requirements for a multitude of professionals, including accountants, architects, real estate brokers, and appraisal management companies.
If you sell certain products such as alcoholic beverages or tobacco products, you will need a special license to do so. And those handling hazardous waste will need a special license as this is a highly regulated industry. If you are unsure whether you need a license, you should consult a local Small Business Administration (SBA) expert to assess your business and determine what is required.
When do you need a business license in Iowa?
If your business is required to obtain a business permit or license, you will need to address this issue before starting your business activities. If a license is required, you cannot legally solicit or sell products and services without it.
When it comes to a sales tax permit, the state requires a permit for any business that sells tangible personal property or taxable services. The sales tax permit allows the business to collect and pay 6% sales tax.