Starting a successful computer repair shop takes more than knowing how to replace a hard drive or remove a computer virus. Starting a new business requires completing several steps, and obtaining licensing is an important one as it may impact your ability to operate legally.

The question, “what business license do I need to start my computer repair business” is common, but it’s hard to answer as the location of a business can influence what licenses are needed.  Regardless, your business will likely need multiple licenses, permits, and registrations from federal, state, and local agencies.

Let’s take a look at which licenses to consider when starting a computer repair business.

Related: Guide to starting a computer repair business

What Licenses Do You Need to Start a Computer Repair Shop?

Electronics Repair Licensing

Several states require licensing for businesses that repair electronics. For instance, in California, businesses that repair computers or any electronic devices must be licensed by the California Bureau of Household Goods and Services (BHGS).

In Texas, computer repair and support businesses are required to be licensed by the Texas Department of Public Safety if the business performs investigative services, such as tracking the location or recovery of stolen equipment.

Each state has different requirements, so it’s important to research the laws in your state before starting.

In addition to computer repair specific requirements, there are also several general business licensing requirements at the federal, state, and local levels.  While licensing requirements vary by location, here are a few of the common licenses and permits that a computer repair business may need:

Entity Formation

When starting a business, the legal structure needs to be selected. A legal entity refers to how a business is organized to operate. There are four main types of entities; sole proprietorship, partnership, corporation, and Limited Liability Company (LLC).

Each type of entity has its own pros and cons, such as personal liability protection, costs, and administrative requirements.

Related: What is the difference between a sole proprietorship, partnership, corporation, or LLC?

Business Name Registration

While not necessarily a business license, it’s worth noting that 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, Trade Name, Fictitious Name, or Assumed Business Name) unless the business is operating under the owner’s full name.

Learn: How to register a DBA

Corporations and LLCs register are a little easier because the name is registered when the entity is formed with the state.

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

Federal Employer Identification Number

The Federal Employer Identification Number (also referred to as a FEIN, Employer Identification Number, EIN, Federal Tax ID Number, or Business 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 Number

In order to sell products and/or offer certain services, a state sales tax permit (also referred to as a business tax number or tax ID number) may be needed.  Most states don’t require the taxation of the service part of computer repair, though the parts used in the repair are usually taxable, however, some states require the taxation of the service.

Registering for a sales tax permit creates an account number with the state’s Department of Revenue (or similarly named state taxing agency) to collect and remit sales tax.

Learn: How to get a sales tax permit in each state

Resale Certificate

When buying inventory that is being resold to customers, such as motherboards, graphics cards, memory, and other items, the business can purchase these items tax-free. A resale certificate (sometimes referred to as a seller’s permit or reseller certificate) allows a business to purchase inventory, and instead of paying the sales tax to their vendor, they charge the sales tax to the end-user of the product.

A resale certificate only allows a business to not pay sales tax for items being resold, and sales tax will still need to be paid for supplies or equipment.

Learn: How to get a resale certificate

Certificate of Occupancy

In most communities, a computer repair business will likely need to secure a Certificate of Occupancy (CO) before operating in a commercial building.  This certificate is typically obtained from the city and/or the county and allows a business to occupy and operate from a building. Before the certificate is issued, the building will need to comply with zoning regulations, building codes, and any other local requirements.

If the computer repair business will be operated as a home-based business, a home occupation permit may be required.

Before purchasing or leasing a location for your computer repair business, be sure to check with the local zoning department first to ensure the business can legally operate out of the chosen location.

The process of identifying all of the licenses and permits necessary to start a computer repair business may feel confusing and overwhelming. Regardless, it’s critical to do this right the first time, otherwise, your business may be temporarily shut down until all licenses are obtained.