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Iowa Business License Basics

Iowa Business License Basics

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Iowa Business License Basics

Starting a small business in Iowa often means registering with several federal, state, and local agencies. Let’s review common Iowa business license registrations so your business starts off right.

Related: Guide to starting a business in Iowa 

Setting Up the Business

Sole proprietorship: In Iowa, a sole proprietorship is an unincorporated business owned by a single individual. The owner has complete control over the business but is personally liable for all debts and obligations. No formal registration is required, making it the simplest and most common form of business structure.

General partnership: A general partnership in Iowa is an unincorporated business owned by two or more individuals who share management responsibilities, profits, and losses. Partners have unlimited personal liability for the partnership’s debts and obligations. No formal registration is required, but a partnership agreement is recommended to outline the partners’ roles and responsibilities

Corporation: A corporation in Iowa is a legal entity separate from its owners, providing the owners (shareholders) with limited liability protection. Corporations are the most complex business structure to set up and have specific administrative requirements. 

Limited Liability Company (LLC): An LLC in Iowa combines aspects of sole proprietorships and corporations, offering flexibility in management and taxation. Owners, called members, have limited personal liability for the LLC’s debts and obligations, but they aren’t as complex as corporations. 

Related: Comparison of Business Structures

What Licenses Do Iowa Businesses Need?

With the business structure out of the way, we can begin looking at the different types of registrations businesses in Iowa may need. There isn’t a standard business license, as requirements vary depending on where the business is located and what it does. Here is a general overview of the different registrations your business may need.

Business License

There is no general state of Iowa business license, however, many cities require businesses to be licensed in order to operate. The cost and rules for business registration vary depending on location and what the business does. Below are a few cities that have licensing requirements.

  • Des Moines: The City of Des Moines requires licensing for certain businesses, such as alcohol sellers, mobile vendors, pawn shops, and others.
  • Cedar Rapids: A few types of businesses need to register with the Cedar Rapids City Clerk, including bowling alleys, alcohol-selling businesses, skating rinks, mobile food vendors, and others.
  • Davenport: The Davenport Revenue Division issues business licenses to businesses operating within city limits. Businesses selling alarm systems, food trucks, retail merchants, and others will need to register.
  • Sioux City: Certain businesses such as those that provide body piercing, pawnbrokers, transient merchants, and a few others will need to register with the City Clerk.
  • Waterloo: Business licenses in Waterloo are required for those operating tree trimming businesses, pawnbrokers, etc.
Take the guesswork out of figuring out what licenses and permits are required to start your business with license research packages from Bizee and LegalZoom.

For as little as $99, you can save a lot of time and know your business is in compliance with local, state, and federal requirements. 

Trade Name Registration

While not a small business license, it’s common for Sole Proprietorships and Partnerships operating under a name that is different from the full name of the owner(s) to register for an Iowa Trade Name (also known as a Doing Business As, DBA, or Fictitious Business Name) with the County Recorder’s Office in the county where the business is located.

Building & Zoning Permits

  • Zoning: In Iowa, zoning laws are regulated by local units of government, such as counties and cities. Before choosing a location, check with your local planning and zoning department to ensure your intended use complies with the zoning district.
  • Building Permit: A building permit is required for most construction, alterations, or additions to structures in Iowa. To obtain a permit, submit plans, specifications, and an application to your local building department or permit office.
  • Signage Permit: In Iowa, most local governments regulate the size, location, and type of business signage. Before installing any signs, check with your local planning and zoning department or building permit office for specific requirements and to obtain a sign permit.

Iowa Business Tax Permit

Anyone selling taxable goods or services in Iowa must register for an Iowa Business Tax Permit through the Iowa Department of Revenue. A permit is needed for each location in Iowa, and there is no charge to register.

Sales Tax Exemption Certificate

After obtaining the Business Tax Permit, most businesses will want to obtain an Iowa Sales Tax Exemption Certificate. This allows them to not pay sales tax on their inventory purchases meant to be resold to customers.

Professional License

A variety of professions in the state are regulated and need to be registered before offering certain services. A few common professions that require licensing in Iowa include; alarm installers, brewpubs, commercial kitchens, dietitians, fur dealers, and many more. Additional information, fees, and licensing requirements for professions are available from the Iowa Professional Licensing Bureau.

Employer Identification Number (EIN)

The Iowa Employer Identification Number (EIN), also known as a Federal Tax Identification Number, is a unique nine-digit number assigned by the Internal Revenue Service (IRS) to businesses operating in Iowa. It is used for tax filing and reporting purposes, similar to how an individual uses a Social Security number. Companies can apply for an EIN through the IRS website or by submitting a paper form.

Next Steps

While it’s a good start, there are so many different licenses that may be needed. Double-check with the City Clerk’s Office, Chamber of Commerce, and/or Economic Development office in your area before opening your doors.

Iowa Business License Basics

Iowa Business License Basics

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