What Licenses Does A Gas Station Need? – Mina Gorgyos

Gas stations are a very complex business to start due to the many regulations and taxes they encounter.

Here we’ll break down the different types of permits and licenses you may need, along with sharing some resources to help get you started.

Let’s get started and see which licenses to consider when starting a gas station.

Federal Licensing

The Environmental Protection Agency (EPA) closely regulates gas stations and has special rules about the Underground Storage Tanks (UST) used to store fuel.

State Licensing

Every state has strict regulations on selling fuel. Many states have specific licensing, sales tax registrations, and rules from the state Fire Marshal and state Environmental Protection Agency for gas stations.

Some states like New Jersey and Oregon have laws that allow only an attendant to pump gasoline. Other states don’t have these regulations.

Here are examples of a few states with their licensing and regulations:

To be registered as a Motor Fuel Dealer in Ohio, the Ohio Department of Taxation requires:

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- An application for a License as a Motor Fuel Dealer (Form MF201)
- A copy of the applicant’s latest financial statements prepared by an independent auditor   or accountant
- A letter explaining the applicant’s intended course of business in Ohio
- Certification of existence from the Ohio Secretary of State
- List of all retail service stations owned by the applicant
- A surety bond

In Maryland, a special Fuel Seller License from the Maryland Comptroller is needed to operate a gas station.

The Field Enforcement Bureau of the Comptroller of Maryland’s Office is responsible for checking the quality of petroleum products sold in Maryland. Additionally, inspectors randomly inspect stations to ensure the price posted is the same as is on the pump, whether fuel taxes are being paid, current Trader’s License and Sales Tax License, and more.

Local Licensing

In addition to state licensing, several cities also have licensing requirements. Local licensing is often needed in addition to state requirements. A few examples include:

Rock Island, Illinois, requires a license for gas stations. The license fee varies depending on the number of gas nozzles on the property.

To sell gasoline in Saint Paul, Minnesota, a Class N city license application, site plan, and a lease, rental agreement, or proof of ownership is required to be filed with the Department of Safety & Inspections.

The City of Detroit, Michigan, has different requirements on the type of gas station, whether it be full-service, self-service, both. In addition to the application, clearance from the Fire Marshal, police department, Commercial Certificate of Compliance, and Office of the Treasury.

Business Structure

One of the first registrations to complete when starting a gasoline station is selecting a business structure (also referred to as a legal entity), which refers to how a business is organized to operate. It should be at the top of your list because the other licenses your business will need will require the business’s legal name, which can’t be registered until the business entity is formed.

The four main types of legal structures include the sole proprietorship, partnership, corporation, and Limited Liability Company (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 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).

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.

A general business license may be needed in addition to any local gas station licensing.

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.

Sole proprietors and single-owner LLCs without employees can instead use the owner’s social security number.

The FEIN or owner’s social security number will be used to open a business bank account, apply for a business credit card, and hire employees.

Sales Tax Permit or Business Number

In order to sell products and/or offer certain services, 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.

Sales tax requirements are often much more complex for businesses selling fuel than most other types of businesses. Sales tax rates are also often different for fuel than they are for packaged or prepared foods. Be sure to check with the Department of Revenue for more information and rates for your location.

Resale Certificate

A resale certificate (sometimes referred to as a seller’s permit) allows a business to purchase inventory. When buying inventory that is being resold to customers, such as fuel, food, beverages, cigarettes, etc., the business can purchase these items tax-free. Instead of paying the sales tax to their vendor, they charge the sales tax to the end-user of the product.

A resale certificate only allows a business to not pay sales tax for items being resold, and sales tax will still need to be paid for supplies or equipment.

#minagorgyos #gasstationusa #businessmarketing

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