DEFINITION of 'Licensing Fee'

1. An amount of money paid by an individual or business to a government agency for the privilege of performing a certain service or engaging in a certain line of business.
2. A sum paid to use a copyrighted item, such as a photograph or logo, that is owned by someone else.

BREAKING DOWN 'Licensing Fee'

1. Restaurants must obtain a liquor license and pay a liquor licensing fee to serve spirits. Hairdressers must pay a licensing fee and obtain a cosmetology license to operate their business. Licensing fees, combined with the fees to get the training necessary to qualify for the license, create barriers to entry in licensed occupations, driving up the costs of services offered by licensed providers.
2. If a t-shirt company owner wanted to sell t-shirts imprinted with a Major League Baseball team's logo, the owner would need to get MLB permission and pay a licensing fee to obtain a license to use the image.

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