People who are starting up a small business usually know there is some sort of licensing procedure for the business. In the state of North Carolina, there is not one single “business license” that offers a blanket coverage for every type of business. Rather, there are more than 700 individual licenses that the state offers, and some businesses don’t even have to have a license. So the best thing you can do is contact the North Carolina Business Servicenter at 1 800 228-8443 to find out what you need. The statewide license covers you for the whole state, but there may be a requirement from your city for another license. Also, if you are planning to operate the business under an assumed name, you have to register that name as well.

In addition to having a license, you will need a Federal Employee ID Number, a North Carolina withholding number (these are both if you are going to have employees), and a sales and use tax number (if you are planning to sell goods or services.)

In addition to your sales and use tax that you collect from customers, it is my understanding that your business can be subject to some other taxes. For example, there is something called a ‘privilege license tax’ that applies to certain businesses. The license for this is issued yearly and limits the person named in the license to conducting only the profession or business that is mentioned on the license.

Also, if you own a corporation, you must file an annual franchise and income tax return under the name of your business. The tax is imposed annually on corporations for the privilege of doing business in the state. Even if your business has gone inactive, corporations are required to file the return. The tax is expected as long as your corporation remains incorporated, domesticated, and/or continues to conduct business in the state of North Carolina.

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This entry was posted on Tuesday, December 5th, 2006 at 4:14 pm and is filed under Small Business Tax Laws, Tax Laws. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.