From Athletic Club to Short-Term Rental: An Overview of Different Types of Business Licenses

Most local governments require a general business license or business privilege license for a business owner to operate in their jurisdiction. Depending on the nature of the business, this can apply whether the business is run from home (or in the case of more limited operations, a home occupation permit may be all that’s required) or at a separate location.

From collecting fees to issuing renewals, the process of licensing a business is a continuous cycle that presents a potential bottleneck if local governments are utilizing a rudimentary method for managing the process.

Similar to food trucks, Christmas tree vendors can take many forms and operate in a variety of locations, from sidewalk pop-up stands to piggybacking off of existing properties, which can potentially create compliance challenges. Requirements vary depending on several factors, including what is being sold along with the trees and the location of the vendor.

You don’t have to be in a food truck mecca like Portland, Oregon to get some street grub anymore. In the Instagram and foodie era, food trucks are ubiquitous virtually everywhere. Food truck licenses have many of the same requirements as restaurants, with some specific differences such as limitations on serving alcoholic beverages.

There are obvious challenges to managing food truck licenses, such as accurate tracking and compliance, compared to traditional brick-and-mortar restaurants. For example, food truck operators that piggyback off of existing businesses—like breweries—may be unaware of the licensing responsibility specific to their food truck, requiring outreach and education.

Businesses that train guard dogs or a business owner that keeps a guard dog on a business site are required to get a guard dog license, which has a number of stipulations including specifications for the premises, transportation, nourishment, and housing.

Liquor licenses are among the most strictly regulated, and while it’s not exactly a newer category like some of the others on this list, the COVID-19 pandemic did introduce some novel challenges to local governments tackling licensing. Cocktail and liquor delivery was one of the many approaches the restaurant industry took to staying afloat during lockdown periods, and similar to newly-constructed al fresco dining areas, the popularity of these pandemic measures led to many cities making legislative moves toward permanence.

In some states, it was as simple as businesses that already held a liquor license paying additional filing and licensing fees. In others, the option to deliver became limited to certain types of liquor licenses, like bars, and excluded from others, such as restaurants.

Another highly regulated category, businesses that sell tobacco or tobacco-related products and paraphernalia need to apply for a tobacco license. As both the federal government and states like California tighten rules and limits on the sale of tobacco products, a number of local governments are increasingly limiting the number of licenses available in their jurisdictions, and it’s likely that some will eventually ban sales meaning they could phase license out entirely.

To some, short-term rental (STR) platforms like Airbnb and Vrbo seemed to pop up overnight, leading local governments to play catch up to the market’s explosion in popularity. Given the relative newness of this industry, it’s arguably one of the primary segments where cities and counties are working to establish licensing requirements for purposes such as enforcing safety standards and collecting taxes.

When STRs aren’t being tracked, municipalities are potentially missing out on substantial revenue. There have also been considerations as to how the volume of STRs could impact communities; some jurisdictions have implemented caps on the number of licenses they issue per year or housing zone.