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Depending on your state, your area is most likely classified as either dependent or independent. Dependent areas are considered to be a part of the county in which they are located and are therefore subject to the county’s code. If your business is in a dependent area, you may need to file for both the local and county business license. Independent areas, on the other hand, do not form parts of larger government entities. Baltimore, Maryland is an example of an independent city because it is not considered to be a part of any county in Maryland and therefore is not subject to county ordinances. Knowing whether your area is classified dependent or independent will save you time and ensure that you are properly licensed in each required level of jurisdiction.
Many large cities are divided into smaller census designated places, or CDPs. A CDP is a concentration of population identified by the US Census Bureau for statistical purposes. CDPs may appear to be independent towns or villages; however, they do not have their own municipal governments and are typically subject to the ordinances of the larger areas of which they are a part. Hershey, Pennsylvania is an example of a CDP because, although it appears to be an independent city with its own borders and population, it is in fact a part of Derry Township, Pennsylvania and so is subject to Derry’s municipal code. It is important to know if your business is located in a CDP, as this can affect tax reporting and will dictate which area’s business license you will be required to obtain.
It is very possible that your business is located in an area that is outside of local municipal government altogether. Such areas are considered unincorporated. A business in an unincorporated area may not need to obtain a local business license, but might still need to obtain a county and state license.
