A business license is a document provided by the government that permits your business to legally operate within a particular jurisdiction. There are many kinds of business licenses and permits that might be required depending on your type of business and where you conduct business.

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

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

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

Keep in mind that a city or county may require their own business license separate from the state. Avalara can help you determine your requirements. 

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

Regardless of whether you need a business license, 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.  

It depends. Some jurisdictions can take several weeks to process a license request once submitted while others can take as little as a week.  

If you’re using Avalara to file your licenses, Avalara will manage the license filing, follow-up, and receipt on your behalf.