Etsy’s seller policies do not require a business license to sell on their platform. However, you may need a license or permit from agencies regulating businesses. Determine if your Etsy shop is a hobby or business using IRS guidelines. If it’s considered a business, you likely need a license.
Home Business Considerations
Consider if your rental agreement allows operating a business from home. Implications exist for your landlord regarding insurance. Some local governments require a business license once sales surpass a threshold.
Sales Tax and Seller’s Permits
States levy sales tax on goods and services. You may need a seller’s permit if required in your state to collect sales tax. Have a bank account to receive Etsy payments and set up shipping.
When to Get Licensed
If your operation remains unprofitable, you likely don’t need a license. However, as your business grows and if your sales surpass a certain threshold, it becomes necessary to get a license to avoid legal issues and establish credibility.
What You Can Sell
- Handmade items designed/made by you
- Vintage items and craft supplies
Ensure you comply with any additional regulations if you plan on participating in craft shows and in-person selling, and to provide trademark protection.
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