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What Licenses Does A Scrap Metal Dealer Need?

What Licenses Does A Scrap Metal Dealer Need?

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What Licenses Does A Scrap Metal Dealer Need?

Starting a successful scrap metal business takes more than knowing the values of metals. 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 scrap metal dealer

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 as a Scrap Metal Dealer?

State Licensing

Almost every state regulates scrap metal dealers, and it can be complex to find these. Due to frequent thefts of valuable metals, many states require tracking these sales and reporting them to local law enforcement.

Here are a few examples of state licensing for pawn shops:

The Oklahoma Department of Agriculture, Food, and Forestry requires the submission of a Scrap Metal Dealer License Application, in addition to operating under specific regulations.

In Tennessee, scrap metal dealers will register for the Scrap Metal Registration Program with the Tennessee Department of Commerce and Insurance.

Scrap metal dealers in Kansas will register the Scrap Metal Dealer Application with the Kansas Attorney General.

Local Licensing

In addition to state licensing, there is likely going to be local business licensing for scrap dealers.  A few examples include:

In Tempe, Arizona, a Tempe Scrap Dealer License, Transaction Privilege Tax (TPT) license Tempe Use Permit, and fingerprints and background check are required of all scrap dealers operating in City limits.

Junk Dealer License is required for any business in Milwaukee that buys, sells, gathers, delivers, or stores junk and maintains a yard or building, therefore as a principal place of business.

The City of Tacoma, Washington requires a Scrap Metal or Recyclable Material Dealer license is required for a person to buy, sell, deal in or collect recyclable materials, scrap metal, or scrap metal products in the City.

 

In addition to specific state and local licensing for scrap dealers, there are also some general licensing requirements that are commonly needed to start a business.  Here are a few of the common licenses and permits for a scrap metal dealer:

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 or DBA

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.

Learn: How to get an EIN 

Sales Tax Permit or Number

In order to sell products and/or offer certain services, a state sales tax permit (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.

Additionally, hiring employees will also likely require a state tax number.

Learn: How to get a sales tax permit

Certificate of Occupancy

In most communities, a retail business will need to secure a Certificate of Occupancy (CO) before opening.  This certificate is typically obtained from the city, but sometimes from the county, and allows a business to occupy and operate from a building provided the building complies with zoning regulations, building codes, and any other local requirements.

Securing a location can be difficult for a new scrap metal dealer business. Be sure to check with the local zoning department to ensure the business can legally operate out of the chosen location.

 

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 Scrap Metal Dealer Need?

What Licenses Does A Scrap Metal Dealer Need?

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