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What Licenses Does A Drywall Business Need?

What Licenses Does A Drywall Business Need?

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What Licenses Does A Drywall Business Need?

Starting a successful drywall business takes more than knowing how to tape and mud a new wall. 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 drywall business” is a common one, but in reality, your business will likely need multiple licenses, permits, and registrations from federal, state, and local agencies.

Let’s look at which licenses to consider when starting a drywall business.

Related: Guide to starting a drywall business

While we have researched what licenses and permits your business may need, please be aware that there is no way for us to have uncovered every state and local requirement.

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 Drywall Business?

State Licensing

Every state is different when it comes to the rules and regulations for drywallers. A general contractor’s license is required in some states, while others only require specific licensing for drywall jobs. You’ll want to research the laws in your state to see what services you can legally offer.

Requirements vary by state, however, most require the contractor to at least be 18 years old, have a few years of work experience, pass a written exam, and pass a background check.

A few examples of state licensing includes:

In Florida, a Gypsum Drywall Contractor license is needed from the Florida Department of Business & Professional Regulation. Licensing requires a state exam in Drywall and Business & Finance, experience or education in the field, show proof of financial stability, and have liability and property damage insurance.

The South Carolina Contractor’s Licensing Board does not require licensing, as drywalling falls under the Handyman classification. Even though licensing isn’t required, contractors have to register with the Board.

A Nevada Painting and Decorating Contractor’s License is required for drywall contractors by the Nevada State Contractors Board. Requirements include passing an exam, obtaining a surety bond, and having experience in the field.

Local Licensing

Making matters even more confusing, a drywall contractor can be required to be licensed by the state, the state, and city, or county, or just the city or county. It’s also important to know that licensing or registration may be required in each town or county the contractor is working.

A few examples include of local licensing includes:

The City of Brighton, Colorado, requires a Class D/E – Jobbing-Specialty Trades Contractor License for drywall work.

Certain construction projects in Natick, Massachusetts, require licensing for drywall work.

The City of Cody, Wyoming, requires a Drywall License for any drywall work within city limits.

In addition to contractor-specific licensing, there are also general requirements for starting a business.  While licensing requirements vary by location, here are a few of the common licenses and permits that a drywall business may need:

Entity Formation

When starting a business, the legal entity 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 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, fictitious name, or assumed 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, 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 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.  This permit creates an account number with the state’s Department of Revenue (or similarly named state taxing agency) to collect and remit sales tax.

It’s important to understand state sales tax as in most states, the contractor pays the sales tax on the supplies used, and in other states, the contractor will charge sales tax of the materials to the customer.  Additionally, in some states, sales tax will be collected on the labor cost of the project.

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

Resale Certificate

In states where sales tax is charged to the customer, contractors can purchase materials tax-free. A resale certificate (sometimes referred to as a seller’s permit) allows a business to purchase inventory. 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 materials 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 drywall 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 drywall business will be operated as a home-based business, a home occupation permit may be required.

Before purchasing or leasing a location for your drywall 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 drywall business may feel confusing and overwhelming. It is critical to do this right the first time, otherwise, your business may be temporarily shut down until all licenses are obtained.

These are some of the most common business licenses, but there may be specific licensing that isn't listed. Before starting your business, be sure to check with the City Clerk, County Clerk, Chamber of Commerce, and/or Economic Developer in your area to get more information regarding business licensing.

For some additional peace of mind, companies like Incfile or Legalzoom can do the research and ensure you have all of the proper federal, state, and local licenses to start your business.

Author

  • Greg Bouhl

    With over two decades as an entrepreneur, educator, and business advisor, Greg Bouhl has worked with over 2,000 entrepreneurs to help them start and grow their businesses. Fed up with clients finding and acting on inaccurate and outdated information online, Greg launched StartUp101.com to be a trusted resource for people starting a business.

What Licenses Does A Drywall Business Need?

What Licenses Does A Drywall Business Need?

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