Business License vs Business Permit: What's the Difference?

The short answer

San Francisco calls it a "Business Registration Certificate." Houston calls it a "Business License." Miami-Dade calls it a "Local Business Tax Receipt." Same thing, five different names. In everyday conversation, "business license" and "business permit" mean the same thing. But if you want to be precise — and being precise is how you avoid missing one — there's a useful distinction.

The practical distinction

A license generally means ongoing permission to operate, run a business, practice a trade, sell alcohol. Licenses involve an application, qualifications review, and periodic renewal.

A permit generally means permission for a specific activity, put up a sign, do construction, hold an outdoor event. Permits are often tied to a specific project.

Examples

• Business license: Ongoing, renews annually. This is a license.
• Building permit: Specific to a construction project. Expires when done. This is a permit.
• Liquor license: Ongoing, renews every 1 to 2 years. License.
• Sign permit: For a specific sign installation. Permit.
• Cosmetology license: Ongoing, renews every 2 to 4 years. License.
• Certificate of Occupancy: Technically a certificate, but people call it all three.

Why this matters (a little)

The terminology doesn't matter for compliance. What matters is knowing which of your permits renew on a schedule and which are one-time. When you set up your tracking system, whether a spreadsheet or a tool like PermitDue, you need to know the difference.

The terms change by jurisdiction

San Francisco: "Business Registration Certificate." Houston: "Business License." Los Angeles: "Business Tax Registration Certificate." Chicago: "Business License." Miami-Dade: "Local Business Tax Receipt." Five different names for the same thing.

What you actually need to focus on

Forget the terminology. Focus on: What do I need? Who issues it? What does it cost? When does it expire? What happens if I forget to renew?

Get the full list

The free permit checker shows you every license, permit, and certificate your business needs. Check requirements for restaurants in Chicago or retail in Miami.

Already know what you need? Read about the most common permit mistakes to make sure you aren't making one of them.