Stage 4

State & Local Compliance

Sales tax permits, industry licenses, and beneficial ownership reporting — the part that varies the most by what and where you're doing this.

This is genuinely the stage where a local business attorney or compliance service earns their fee — the requirements below vary enormously by state, city, and industry, and getting them wrong can mean fines or a forced shutdown. We'll flag categories to check; verify specifics for your situation.

Sales tax / seller's permit

If you sell physical products (and in some states, certain services), you likely need to register for a sales tax permit with your state's department of revenue before you make your first sale, then collect and remit sales tax on an ongoing basis.

Requirements and rates vary by state, and some cities/counties add their own local sales tax on top. Check your specific state's department of revenue site directly.

Industry-specific licenses and permits

This is the category that varies the most: contractor licenses, food service permits and health inspections, cosmetology/salon licenses, liquor licenses, professional licenses (real estate, insurance, healthcare, legal, financial services), childcare licensing, and dozens more depending on what you're doing.

There's no single national database that reliably covers all of these — your state's business licensing office (often part of the Secretary of State or a dedicated licensing board) and your city/county clerk's office are the two places to check specifically for your industry and location.

  • Checked whether my specific industry requires a state-level professional/occupational license
  • Checked city/county requirements (these are often separate from state requirements)
  • Checked zoning if I'll operate from a physical location, including a home-based business

Beneficial Ownership Information (BOI) reporting

The Corporate Transparency Act created a federal requirement for many entities to report their beneficial owners to FinCEN. This requirement has changed multiple times through rulemaking and litigation since it took effect — as of our last review, FinCEN had narrowed the requirement so that most U.S.-formed companies with U.S. beneficial owners were no longer required to report, with the requirement instead focused on foreign-formed entities registered to do business in the U.S.

This status has changed before and could change again — do not treat the paragraph above as current fact. Before you rely on it, search "FinCEN beneficial ownership information reporting" and check the current requirement directly on FinCEN's site, or ask a business attorney. We'd rather send you to verify than have you rely on something that was accurate when we wrote it but isn't anymore.
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