Bay County and Panama City Business License: The 1% Gross Receipts Tax

Anyone searching for a bay county business license, bay county business tax receipt, or bay county permit is usually asking one question: do I owe the county or the city anything before I open? The answer depends on the exact city limits your business address falls inside. Unincorporated Bay County requires no business license or local business registration and charges no fee. Panama City charges an occupational business tax receipt (BTR) plus a monthly 1% Merchant Fee on retail gross sales. Panama City Beach requires its own business registration. This guide covers what applies where, what it costs, and how to confirm the details before you open.

Disclaimer: This is informational content, not legal or tax advice. Local rules change. The figures below reflect research verified on 2026-10-07. Confirm current requirements with the agency named in each section before you file or pay.

Bay County and Panama City at a glance

Location	Local requirement	Cost	Where to start
Unincorporated Bay County	No business license or local business registration	No fee	Confirm with Bay County government
Panama City	Occupational BTR plus monthly 1% Merchant Fee on retail gross sales	BTR from $25 to $2,500, plus the 1% monthly fee	Business Services at panamacity.gov, apply at panamacity.munirevs.com
Panama City Beach	Business registration required	Confirm with the city	pcbfl.gov/216

Florida has no statewide business license

Florida does not issue a general business license at the state level. Depending on what you do, three kinds of permission may apply:

• State professional licenses from the Department of Business and Professional Regulation (DBPR). These cover contractors, cosmetology, real estate, restaurants, CPAs, engineers and similar trades and professions.
• A local business tax receipt, which many Florida cities and counties require for the address where you operate. Not every local government levies one.
• A sales and use tax registration with the Florida Department of Revenue, required before you begin business if you sell taxable goods or services.

The local business tax receipt is a tax authorized under Chapter 205 of the Florida Statutes. It is not a competency license, so holding one does not show that you are qualified for the work. A receipt does not replace a DBPR license, and a DBPR license does not replace a receipt.

Bay County: unincorporated areas

If your business sits outside the city limits of Panama City, Panama City Beach and the other incorporated places in the county, you are in unincorporated Bay County. In that area you do not need a business license or local business registration, and no fee applies. Florida's Office of Economic and Demographic Research (EDR) reports no county local business tax revenue for Bay County, which matches what the county's unincorporated rules require.

Two cautions apply. First, a business in unincorporated Bay County still needs any DBPR license its trade requires and a sales tax registration if it sells taxable goods or services. Second, the test is your exact location, not your mailing address. A Panama City mailing address does not always mean you sit inside city limits, and an address with a Panama City Beach name may fall outside them. Confirm the boundary with Bay County government before you assume either way.

Contractors working on the Tyndall Air Force Base rebuild should check their DBPR licensing requirements first. Then confirm whether any city where a job takes place requires its own local receipt or registration.

Panama City: the business tax receipt and the 1% Merchant Fee

Panama City is the main local tax exception in the county. Its Business Services office handles two separate charges.

The occupational business tax receipt

The occupational BTR ranges from $25 to $2,500. Where your business lands in that range depends on how the city classifies it. Ask Business Services for the amount that applies to your business before you apply, rather than assuming the lowest figure.

The monthly 1% Merchant Fee

Panama City also charges a monthly 1% Merchant Fee on retail gross sales. The fee reaches restaurants, hotels and short-term rentals as well as traditional retail stores. The city applies it to the first $5,000 of gross sales per item. Because that cap works item by item, a business with many products should not assume the 1% applies to total monthly revenue without checking. Ask Business Services how the cap is calculated for your product mix before you set up your bookkeeping.

How to apply in Panama City

1. Go to the Business Services page at panamacity.gov and open the online application at panamacity.munirevs.com.
2. Enter your business name, address, and type of business. Your business type determines the occupational BTR amount.
3. Pay the BTR and keep the receipt with your business records.
4. Set a monthly reminder to file and pay the Merchant Fee, and confirm the filing method with Business Services.
5. Keep gross sales records by item, since the per-item cap depends on them.

Panama City Beach: a separate business registration

Panama City Beach requires its own business registration. It is separate from anything you file with Bay County or Panama City. Start at pcbfl.gov/216. Check the city's page or call the city directly for the registration fee before you budget for it. Also confirm whether the registration carries any gross receipts charge, because the city is the authority on its own charges.

Why only Panama City and Panama City Beach charge gross receipts taxes

Section 205.044 of the Florida Statutes is the reason these local charges look different from most Florida business taxes. It limits local business taxes measured by gross receipts to a small group of grandfathered governments. Panama City and Panama City Beach are the only two grandfathered gross-receipts local business taxes in the state. For the Panama City Beach charge, confirm with the city whether its registration includes a gross receipts component. Outside those two cities, you should not expect a local tax calculated on your sales.

Bay County sales tax: the 7% combined rate

Bay County's combined sales tax rate is 7%. That figure is the 6% Florida state sales tax rate plus a 1% discretionary sales surtax that applies in the county. Businesses that sell taxable goods or services must register with the Florida Department of Revenue before they begin business. Register online at the Department of Revenue registration page.

Component	Rate
Florida state sales tax	6%
Bay County discretionary surtax	1%
Combined rate	7%

A sales tax registration does not give you a local business tax receipt. The Department of Revenue and the city or county handle separate filings, so you may need both.

Status: the repeal bill died in the Senate

As of October 2026, HB 103, a bill that would have repealed Chapter 205, has died in the Senate. The local business tax receipt framework therefore remains in place. A future repeal attempt could change this, so check the status before you build a long-term plan around any figure in this guide.

Step-by-step checklist

1. Confirm your location. Ask Bay County government whether your exact business address is inside Panama City, Panama City Beach, or unincorporated Bay County.
2. Register your name if needed. If you operate under a name other than your legal name, file a Fictitious Name Registration with the Florida Department of State, Division of Corporations (Sunbiz). The registration costs $50 and is filed statewide, not with the county. Renewal costs another $50.
3. Form your entity if needed. A Florida LLC filing with Sunbiz carries a $125 filing fee for Articles of Organization. Check current requirements at dos.fl.gov/sunbiz.
4. Get your professional license. Obtain any DBPR license your trade requires before you open.
5. Register for sales tax. If you sell taxable goods or services, register with the Department of Revenue before you begin business.
6. Apply for the local charge that matches your location. Inside Panama City, apply for the BTR and set up the Merchant Fee. Inside Panama City Beach, complete the city's registration at pcbfl.gov/216. In unincorporated Bay County, no local business license or registration is required.
7. Keep sales records by item. You need them for sales tax and for the Panama City Merchant Fee cap.

Common mistakes to avoid

• Assuming a Panama City mailing address means city limits. Confirm the boundary for your exact address.
• Treating the BTR as a professional license. The receipt is a tax. It does not replace a DBPR license.
• Assuming a county receipt applies everywhere in Bay County. Unincorporated areas have no local business license or registration.
• Applying the 1% Merchant Fee to total revenue. The city applies the fee to the first $5,000 per item, so check how that works for your products before filing.
• Confusing the DBA with a local permit. A fictitious name registration is a statewide Sunbiz filing, not a county permit.

When to talk to a professional

This guide is not a substitute for advice from a qualified professional. An attorney can help you choose an entity structure, review leases, and interpret local ordinances for your specific business. A CPA can help you set up sales tax and Merchant Fee bookkeeping, and can explain how a gross receipts charge affects your margins. The Florida SBDC Network at floridasbdc.org offers counseling for small businesses and can point you to the right local contacts.

Official resources

• Florida Department of State, Division of Corporations (Sunbiz): dos.fl.gov/sunbiz
• Florida Department of Revenue: floridarevenue.com
• Department of Revenue sales tax registration: registration page
• Panama City Business Services: panamacity.gov, online applications at panamacity.munirevs.com
• Panama City Beach business registration: pcbfl.gov/216
• Florida SBDC Network: floridasbdc.org

This content is informational only and is not legal or tax advice. Verify every fee, deadline and rule with the named agency before you rely on it.