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State Start Up Requirements for Small Businesses
[03/15/2012]

If you are starting a business, the state where the business will be located will require you to get a slew of licenses, permits, tax registrations, and other requirements. These may range from filing organizational papers and getting a license for your occupation to tax registration and environmental compliance.

Licenses -- Professions and Products
Professional licenses.
States give licenses to people practicing the traditional professions, such as lawyers, doctors, accountants, teachers, architects, and engineers. States also license people in a broad range of trades, from auto mechanics and barbers to real estate agents and tax preparers. Sometimes licenses are issued to the business, while other licenses are taken out by the individual. You can't guess which occupation needs a license, so you'll just have to ask. Your state website or trade association is a good place to start.
Licensing procedures.
The licensing procedures will vary, but you'll probably have to show evidence of training in the field, and you may have to pass a written exam. Sometimes you have to practice your trade or profession under the supervision of a more experienced person for a while before you become fully licensed. Some licenses are good for a limited period before there is retesting. Others require proof of continuing education in the field.
Licenses for products.
The state may also want you to get a license if you make or sell certain products, such as liquor, food, lottery tickets, gasoline, or firearms.

Tax Registration
If you engage in retail sales, you probably need to register for or get a sales tax license or seller's permit. This lets you collect sales taxes from your customers, which you'll pay to the state. You need this permit even if you're also selling goods that are exempt from your state's sales tax. When the time comes, you'll owe tax only on the taxable sales.
If your business both sells products and performs services, it will be important to keep your labor sales separate from sales of goods, because sales of services aren't usually taxed (only in some states).
Five states do not impose general sales taxes.
In Alaska, Delaware, Montana, New Hampshire, and Oregon, you may not be required to get a state sales permit. However, cities and counties in those states may issue sellers' permits and charge sales taxes. Further, some transactions may be subject to something similar to a sales tax, although it has a different name. Your state tax agency can give you the specifics.
You'll probably have to register with your state's treasury department or department of revenue, except in the few states that still assess no taxes on income. You may also have to register for other business taxes.

Business Entity Filings
If you've chosen to start out your business as a corporation, limited liability company (LLC), or limited partnership, you'll need to file organizational documents with your state's Secretary of State, Department of Corporations, or similar office. Most states have sample or form documents online.
If you share ownership of your business with investors or other owners who do not help you run the business, you may need to comply with state (and federal) securities laws.
If you're starting off with a partner (a partnership) or by yourself (a sole proprietorship), you may not have any state filing to do. An ordinary partnership is created automatically when you agree to go into business with someone, so you don't legally have to write anything down. However, a written partnership agreement is generally a good idea, as a record of the terms of your agreement. 

Register Your Fictitious Business Name
Sometimes your business name doesn't contain your legal name as the owner (for a sole proprietorship or general partnership) or doesn't match the company name that's on file with the state (for a corporation, limited partnership, or LLC). That's variously called a fictitious business name (FBN), assumed name, DBA ("doing business as"), or trade name, and you must register it.
Depending on your state, sometimes you register directly with the state, although you usually register with the county clerk in the county where your business is located. (This registration may also be called a certification or filing.) The name will go on a state FBN list.

Employer Responsibilities
Unemployment and worker's comp.
If you have employees, you may have to register with your state department of labor or with the agencies that administer the laws on unemployment compensation and workers' compensation.
Health and safety requirements.
If your state has a version of the federal Occupational Safety and Health Act (OSHA), your business may need to meet certain mandated health and safety requirements.
Tax requirements for employers.
A business with employees or independent contractors has a number of tax requirements. You will have to:
• get an employer ID from state (and federal) tax authorities
• withhold income taxes and employment taxes (Social Security/Medicare or "FICA") from the paychecks of employees
• possibly withhold other items, such as payments for disability insurance
• report these figures (to the employee, the state, and the IRS), and
• pay the withheld taxes to the tax authorities.
If you hire independent contractors, you need to report contract payments annually on a Form 1099, which goes to the contractor and to the government.
Don't forget to pay the taxes you withhold. Many small businesses get into big trouble by failing to pay the employment taxes after their cash flow hits a dry spell.

Environmental Regulations
Many small businesses need to think about what they must do to avoid contaminating the environment. You may need a special permit (and do more record keeping) if any of the following apply to your business:
• Your equipment vents emissions into the air.
• You need to discharge or store waste water.
• Your business involves or produces hazardous wastes.
Environmental regulation isn't limited to manufacturers. Small businesses, such as stained glass makers, dry cleaners, and photo processors, need to know how to dispose of the dangerous metals or chemicals used in their work. 

EDIT: Immigration Express
Source: NOLO
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