Starting a successful bed and breakfast takes more than having a beautiful property. One important aspect of successfully starting a business is researching and applying for the licenses and permits that are needed to operate legally.
The question, “what business license do I need to start my business” is a common one, but in reality, a business will often need multiple licenses, permits, and registrations from federal, state, and local agencies.
Related: Guide to starting a bed and breakfast
To not miss any important licenses and permits, we recommend also checking with your local Chamber of Commerce, economic development agency, or use a business license service like Incfile or LegalZoom.
What Licenses Do You Need to Start a Bed and Breakfast?
State Licensing
Currently, Florida is the only state the requires licensing for bed and breakfast properties. The Florida Department of Business and Professional Regulation (DBPR) has more information regarding the licensing required to own a bed and breakfast in Florida.
Local Licensing
Licensing is very common (and is increasing) for a bed and breakfast at the city and county level as laws regulate how a home can be used. These regulations are typically found through covenants, zoning, and/or local ordinances.
In many cities, you must register and obtain a license before accepting guests to your property. Here are a few examples of those that do:
In Austin, Texas, owners of short-term rentals (properties that are rented for less than 30 consecutive days) are required to obtain an operating license through the City of Austin’s Code Department.
In Denver, Colorado, a short-term rental license is required for properties that are rented for up to 29 days at a time. Properties that are rented for 30 days at a time don’t require a license.
An Airbnb Permit and Business License are both required by the city of Huntsville. Alabama, to operate a bed and breakfast.
Food Service License
In order to serve food at bed and breakfast, a food service license will be needed. This license is issued through the local health department and helps ensure food-service establishments are following health and safety requirements. Registration is different by location, and you may need a state license, county license, and sometimes both.
Licensing typically requires employees who prepare food to have a food handler certificate or food sanitation certification, in addition to the facility being randomly inspected.
Landlord-Tenant Laws
Every location is different, however, it’s worth noting that depending on the length of stay, your guest may be entitled to certain rights as a tenant. This may make it difficult to evict your guest should they decide to stay. It’s highly recommended to work with an attorney to ensure these issues don’t arise.
In addition to any bed and breakfast specific licensing, there will also likely be general licensing requirements for starting a business as well. Here are a few of the common licenses and permits that a bed and breakfast may need:
General Business License or Permit
Depending on where the business is located, a general business license or permit may be required. A few states require a business license; however, they are more commonly found at the city level.
Learn more: Business license requirements by state
Business Name Registration
While not necessarily a business license, it’s worth noting that in order to use a name for a business, many states require the registration of that name. Making matters more complicated, the process of name registration is different by state and the type of business entity.
For instance, sole proprietorships and partnerships generally need to register a business name (also referred to as a Doing Business As, DBA, fictitious name, or assumed name).
Learn: How to register a DBA
Corporations and LLCs register are a little easier in that their name is registered when forming the entity.
Related: What is the difference between a sole proprietorship, partnership, Corporation, or LLC?
Federal Employer Identification Number
The Federal Employer Identification Number (also referred to as a FEIN, Employer Identification Number, EIN, or Federal Tax ID Number) is a unique nine-digit number that identifies a business with the Internal Revenue Service (IRS).
Any business with employees or those that form as a partnership, Corporation, and in many cases an LLC, the business will need to get an EIN.
Sole proprietors and single-owner LLCs without employees can instead use the owner’s social security number.
Learn: How to get an EIN
Sales Tax Permit or Business Tax Number
A sales tax is collected from overnight stays (sometimes referred to as a tourism tax) and remitted to the state’s Department of Revenue (or similarly named taxation agency). In order to legally operate and collect this tax, a state sales tax permit (business tax number or tax ID number) may be needed. This permit creates an account number with the state’s Department of Revenue or a similarly named state taxing agency.
