Yay! A topic I know something about!
Jen, the license is a mandatory thing and there's a tag you put on the dog's collar.
Where I live, and worked for the past three years up until they eliminated my position
you are required to purchase a license. It is a means of identifying your dog if it gets picked up by animal control. It also helps offset the expense of HAVING animal control
There is also a copy of the license form that you should have on hand should you or the dog lose the tag that goes on the collar. The cost here is less for a s/n dog and more for one that isn't fixed.
If I picked up a dog that had no license, especially if I warned them already to get one, they got a ticket for not having a license and usually a dog-at-large ticket too. Our tickets were each $100.00. So that's $200.00 that could have been averted by purchasing the license.
I love responsible pet owners. But overall the dogs picked up were not the licensed ones (because the owners were more responsible!).
On our forms at the city, there's a spot to write the breed. I would get po'ed at the city gals who filled out the forms (that was not my job) because they would write "mix" in the blank and it's like...OK...it's a "mix"...is it SHORT or tall? Long hair or short?? DUH...give me a bit more description than that!
Our pit bull legislation was rewritten to allow pit bulls if owners got insurance and proper kennels, etc.
Our licensing procedure also made it an infraction to lie on the license application. Your licensing procedures may be similar. In that case - it's better to be honest since fudging on the app. could have negative financial consequences.
The only true wisdom is in knowing you know nothing.