How to Get a Small Business License in Iowa

If you're looking to start a small business in Iowa, you should be aware of the state's regulatory requirements. Specifically, you'll probably need to apply for licenses and permits for your small business

Let's take a look at the most common licenses, permits, and registrations for Iowa small businesses.

Which Business Licenses Do You Need for Your Small Business?

When starting a business in Iowa, you must:

• register your business entity with the Iowa Secretary of State (SOS)
• file taxes with the Iowa Department of Revenue (DOR), and
• apply for business licenses and permits with your state, county, and town.

Your business structure, industry, and location will determine what kinds of licenses and permits your business must apply for. The main types of business licenses, permits, and registrations are:

• general business licenses
• professional licenses
• seller's permits (sometimes called "sales tax certificate" or a similar name)
• zoning and building permits, and
• doing business as (DBA) registrations.

(For more general guidance, see our article on the legal requirements for starting a small business.)

General Business License in Iowa

Iowa, like many states, doesn't require businesses to have a general business license to operate in the state. Your company could have to get a license depending on its location or business activities.

IASourceLink—formed from a partnership with the Iowa Economic Development Authority (IEDA)—has a Business License Information Center to help you look for business licenses that might apply to your business. The Center provides a general overview of licensing in Iowa. The Center's webpage provides links to hundreds of licenses and permits. You can check for licenses based on the issuing agency or by a keyword.

Some required licenses might be issued locally. Cities and counties often require people and businesses who want to operate within the city limits to obtain a license. Some cities require every business to have a license while others require only businesses in particular industries to get a license.

For example, the City of Des Moines requires some businesses to get licenses and permits to operate in the city. In Des Moines, your business might need to obtain a license or permit from the City Clerk's Office if it:

• sells beer, wine, or liquor
• sells cigarettes
• markets door-to-door, or
• has coin-operated machines.

Other businesses that need to obtain a license in Des Moines include:

• mobile food vendors
• theatres
• pawn shops
• haunted houses
• salvage dealer, and
• snow or solid waste haulers.

You'll typically need to pay a license fee and renew your license on a regular basis (for example, yearly). Licensing fees typically vary by license type and location.

Visit your city's website or contact local officials to determine whether your business operations require a license. In general, every city will have its own procedure and license fees.

Professional and Occupational Licenses for Businesses and Individuals in Iowa

Your profession or occupation might require you to obtain licenses or certifications to practice in your industry. Depending on your area of practice, you might be required to have two separate licenses: one for you and one for your business.

The Iowa Department of Inspections, Appeals, and Licensing (DIAL) is responsible for many of the state's professions and occupations. By clicking on your area of practice on the DIAL website, you can learn the rules, laws, and requirements related to your profession. DIAL oversees the following boards and programs:

• the Iowa Department of Commerce
• the Iowa Department of Health and Human Services (HHS)
• the Iowa Department of Public Safety
• the Iowa Workforce Development, and
• the Iowa Civil Rights Commission.

You can also apply for and renew your license, permit, or certification online through DIAL. Many professions and occupations offer an online application process via My Iowa PLB. Though, your program might have a separate online portal.

You can also see the status of your professional license by clicking on the appropriate link on the Iowa government's licenses and permits webpage.

More generally, you might need to do an internet search for your particular profession or occupation to find the appropriate licensing agency in Iowa. Keep in mind that every profession and occupation has its own rules and requirements. For instance, your profession might require you to pass an initial licensing exam or complete continuing education courses. Make sure you're aware of what you need to do to obtain your license and maintain it.

Iowa Sales and Use Tax Permit

In general, if you sell or lease tangible personal goods or provide taxable services in Iowa, then you must collect and pay sales tax in Iowa. Before you start selling taxable goods or services, you must register your business with the DOR to receive a sales and use tax permit.

You can apply for a permit through the DOR's Business Registration System. The DOR allows you to register your business either:

• online through GovConnectIowa, or
• on paper via Iowa Business Tax Permit Registration, 78-005.

You can also register your business for income withholding tax and other business taxes using the same application.

The DOR has a comprehensive Iowa Sales and Use Tax Guide on its website that provides information about the state sales tax, including tax rates, filing frequency, registration requirements, and more.

You should also check with your city or county to learn about their tax reporting requirements.

Local Zoning and Building Permits

In some instances—for example, if you plan to build a new space or renovate an existing space—you'll need to get special zoning and building permits from your city or county. You'll probably need to go through a review process that usually consists of filing an application, attending meetings with local officials, and passing final inspections to obtain the required permits or special zoning.

For more extensive work, you could also need to submit site plans or hire a professional architect or engineer. Sometimes, at the end of the process, if the city or county has signed off, you'll receive a clearance letter (or similar document) that allows you to start occupying your commercial space.

For example, the City of Des Moines's Development Services Department oversees:

• construction permits and inspections through the Permit and Development Center, and
• zoning and land use through the Planning and Urban Design Division.

You can view other information on the Development Services Department website, including:

• applications and forms
• land use plans, including the historic preservation plan
• zoning maps
• city codes, and
• frequently asked questions.

Visit your city or county website or talk to local officials to learn about zoning, building permits, and inspections. You should also review your local code and ordinances to figure out which zoning and building requirements apply to your business and planned operations.

Zoning laws. If your type of business isn't in line with the zoning code, you might need to look for another space for your business. Alternatively, you could be able to apply for a special use permit. A special permit can provide your business with an exception to the current use laws.

Building code. You can work with local departments and agencies to apply for building and construction permits. You'll likely need to go through inspections related to your space's structural, electrical, mechanical, and plumbing features.

If you're interested in leasing a commercial space, make sure you have a section in the commercial lease that ensures that the building and your use of the space are in line with the zoning laws.

Registering a Trade Name or Fictitious Name in Iowa

In general, in Iowa, if you do business under a trade name (also called an "assumed name," "fictitious name," or "DBA") then you must register that trade name. The registration requirements, including where to file, depend on your business structure.

Sole proprietors and general partnerships: If you use a name for your business that's not your last name (or your and your partners' last names for a general partnership), then you must register your business name with the county recorder in the county where you'll do business. For example, suppose Gilbert Grape, a sole proprietor, runs a farm called "Crows and Corn." Gilbert will need to register his trade name, "Crows and Corn," with his county recorder because his farm's name doesn't include his last name, "Grape." As of 2024, the fee to file a trade name with your county recorder is $7. (Iowa Code § 547.1 (2024).)

Corporations, limited liability companies (LLCs), and other registered businesses: Businesses registered with the SOS that use a business name other than their legal name must file a fictitious name with the SOS. A business's legal name is the name it has on file with the SOS, usually listed in its formation documents. For example, suppose you organize an LLC with the SOS under the name "Field of Dreams, LLC" but you do business using the name "Shoeless Joe." You'll need to file a fictitious name for the name "Shoeless Joe" with the SOS. As of 2024, the fee to file a fictitious name with the SOS is $5.

You can visit your county website for more information about how to file your trade name.

Other Licenses and Permits Your Business Might Need

In addition to the licenses and permits discussed above, your business could be required to comply with other laws and regulations. For instance, your business could need to apply for special licensing or follow special rules related to:

• safety
• health, and
• the environment.

These regulatory areas are sometimes encompassed within other licenses, permits, and registrations. However, at other times, these licenses and permits will require a separate application process altogether. If you're in a highly regulated field, be prepared to apply for multiple licenses and permits. For example, if you're running a plant that could potentially affect water streams or air quality, then you'll probably need to follow additional protocols.

Regulatory requirements can vary depending on the city, town, or county involved. You should check the websites for the city and county where you'll operate your business for more information and guidance. Some businesses might be exempt from local licensing requirements under state or federal law.

Be sure to check with your federal, state, and local governments for more details.

Additional Information for Small Businesses in Iowa

IASourceLink assists entrepreneurs in running their Iowa business. You can find various guides on the IASourceLink website, including guides on how to:

• start a business
• fund a business
• grow a business
• exit a business
• start an online business, and
• expand a business.

You can also find industry-specific guides. IASourceLink also offers free business assistance, tax webinars, newsletters, and events for small business owners.

Business owners can find helpful resources at the Iowa Small Business Development Center (SBDC), a comprehensive outreach program for Iowa small businesses. The SBDC offers guidance on how to start, grow, and sell your business. The program also has free online training sessions and confidential business counseling services. You can get advice on business licensing, tax permits, labor laws, and more. You can visit one of the SBDC's regional offices throughout the state. Iowa's SBDC is part of a national network of small business development centers.

The U.S. Small Business Administration (SBA) has district offices in Des Moines and Cedar Rapids. The office's website lists upcoming events, resources, and news for small businesses.

In addition to these great federal and state resources, you can find more information on the small business section of our website. If you want to learn even more, you can also read Legal Guide for Starting & Running a Small Business, by Fred S. Steingold (Nolo), and The Small Business Start-Up Kit, by Peri Pakroo (Nolo).

While many business owners start and run their businesses themselves, others find it helpful to seek professional advice. If you have questions specific to your business, consider talking to an Iowa business lawyer. If possible, try to work with a lawyer with experience assisting businesses in your industry. An attorney can help you work through local or state licensing and permitting processes. They can help you with one specific issue or with your entire business startup.