Starting a successful snow removal business takes more than knowing how to clear snow off of driveways and parking lots. 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 snow removal 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 snow removal business.
Related: Guide to starting a snow removal business
What Licenses Do You Need to Start a Snow Removal Business?
Licensing requirements for a snow removal business will vary depending on the location and scope of work. If you are operating on private property, there are typically fewer licensing requirements than when contracting with a municipality.
Here are a few of the common licenses and permits that a snow removal business may need:
Snow Plow Permits
In some communities, a Snow Plow Permit or Snow Plow Operator’s license will be required in order to plow snow in that community. Typically, this license is issued through the Town or City Clerk’s Office.
While important to have regardless, before a permit is issued, proof of the certificate of insurance is typically required.
Commercial Driver’s License
In many states, drivers of snowplows will need to obtain a Commercial Driver’s License (CDL) from their state’s Driver’s License facility (typically the Secretary of State), or Department of Transportation (DOT) card.
Vehicle Licensing
In order to plow snow in some states, the plow vehicle will need to be registered and licensed as a commercial vehicle. In addition to commercial licensing, there is also typically an annual vehicle inspection to ensure it is safe to operate.
Entity Formation
When starting a business, the business structure needs to be selected. A business structure 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 name registration process 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).
For any business with employees or those that form 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 use the owner’s social security number instead.
Learn: How to get an EIN
Sales Tax Permit or Business Number
In order to provide services in some states, 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.
Learn: How to get a sales tax permit in each state
Certificate of Occupancy
If the snow removal business will be operated as a home-based business, a home occupation permit may be required.
Before purchasing or leasing a location for your snow removal 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 snow removal 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.
