Obtain the licences you need for multiple jurisdictions

If you’re starting a business, there’s a good chance you’ll need a business licence to legally operate. Operating without a business licence could get you in trouble. Potential penalties may include ceasing operations, fines, and, in some extreme cases, even imprisonment.

Identifying your need for a business licence can depend on the type of business you’re running and where it’s located. Avalara Licence Guidance can help you quickly identify the licences you need.

It depends. Some states don’t require a business licence for sole proprietorships; other states do.

Bear in mind that a city or county may require their own business licence separate from the state. Check with your state and local governments to see if they require a business licence for your sole proprietorship.

Whether you need a business licence to sell online comes down to what you sell and where you sell it. You may not need a business licence if you sell on marketplaces like Amazon, eBay, or Etsy. However, a business licence may be required in certain states, counties, towns, or cities.

Regardless of whether you need a business licence, you’ll need to register to collect and remit sales tax if you start selling and making money online. Currently, all states with sales tax require online retailers to get either a seller’s permit or a sales and use tax permit. 

Whether you need a licence to sell on Etsy or Amazon depends on whether your store qualifies as a hobby or a business. This is defined by how much money you earn and how much time you put into your shop.

If you’re making a profit from your Etsy or Amazon shop, then there’s a good chance you may need a licence. It’s always best to check the rules for your specific business.