Obtain the licenses you need for multiple jurisdictions

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. Check with your state and local governments to see if they require a business license for your sole proprietorship.

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. 

Whether you need a license 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 make and how much time you put into your store.

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