License Fee

Updated: 29 February 2024

What Does License Fee Mean?

A license fee is money collected from a person or an organization by a government agency to legitimize an activity such as the selling of a product or a service. This can also refer to the amount of money a person or an organization charges for the use of its intellectual property.

Insuranceopedia Explains License Fee

License fees constitute a large portion of a state's tax revenues, as there are many activities that require people and organizations to pay a fee so that they become legal. Driving, selling products and opening a business are just some of the activities that require fees to obtain a license from the government.

Intellectual property such as a brand name or a design can be used if one pays a license fee to the owner of such property. The legal intellectual property owner usually gets a percentage from the sales of products that use any of their property.

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