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What Licenses Does An eBay Business Need?

What Licenses Does An eBay Business Need?

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What Licenses Does An eBay Business Need?

It may not be the most fun part of opening a business, but you will likely need a few different licenses and permits to start a successful eBay business​, you will likely need a few different licenses and permits.

Here we’ll break down the different types of permits and licenses you may need, along with sharing some resources to help get you started.

Let’s get started and ass which licenses to consider when starting an eBay business.

Related: Guide to starting an eBay business

While we have researched what licenses and permits your business may need, please be aware that there is no way for us to have uncovered every state and local requirement.

To not miss any important licenses and permits, we recommend also checking with your local Chamber of Commerce, economic development agency, or use a business license service like Incfile or LegalZoom.

What Licenses Do You Need to Start an eBay Store?

There are several licensing requirements for starting an eBay business at the federal, state, and local levels. While licensing requirements vary by location, here are a few common business licenses and permits all businesses may need:

One of the first registrations needed when starting an eBay business is selecting a legal structure. A legal structure refers to how a business is organized to operate, and each has different benefits. Things to look out for include protection for personal assets, costs, and administrative requirements. The four main types include the sole proprietorship, partnership, corporation, and Limited Liability Company (LLC).

Related: What is the difference between a sole proprietorship, partnership, corporation, or LLC?

Business Name Registration

While not necessarily a business license, it’s worth noting that to use a name for a business, many states require the registration of that name. Making matters more complicated, the process of name registration is different by state and the type of business entity.

For instance, sole proprietorships and partnerships generally need to register a business name (also referred to as a Doing Business As, DBA, trade name, fictitious name, or assumed name).

Learn: How to register a DBA

Corporations and LLCs register the business name when the entity is formed with the state.

General Business License or Permit

Depending on where the business is located, a general business license or permit may be required. A few states require a business license; however, they are more commonly found at the city level.

Learn more: Business license requirements by state

Federal Employer Identification Number

The Federal Employer Identification Number (also referred to as a FEIN, Employer Identification Number, EIN, or Federal Tax ID Number) is a unique nine-digit number that identifies a business with the Internal Revenue Service (IRS).

Any business with employees or those that form as a partnership, Corporation, and in many cases an LLC, the business will need to get an EIN.

Sole proprietors and single-owner LLCs without employees can instead use the owner’s social security number.

Learn: How to get an EIN 

Business Tax Registration

In order to sell products and/or offer certain services, a state sales tax permit (also referred to as a business tax number or tax ID number) may be needed.  This permit creates an account number with the state’s Department of Revenue (or similarly named state taxing agency) to collect and remit sales tax.

The requirement for sellers to collect sales tax on eBay is constantly changing due to the “marketplace facilitator” laws that several states have adopted that require eBay to collect and remit sales taxes instead of the seller. Even though eBay has started collecting sales tax, not all states are included, and sellers will need to file their returns in those states.

Related: Tax information for eBay sellers

Learn: How to get a sales tax permit in each state

Resale Certificate

When buying inventory that is being resold to customers, the business can purchase these items tax-free. A resale certificate (sometimes referred to as a seller’s permit or resale number) allows a business to purchase inventory, and instead of paying the sales tax to their vendor, they charge the sales tax to the end-user of the product.

A resale certificate only allows a business to not pay sales tax for items being resold, and sales tax will still need to be paid for supplies or equipment.

Learn: How to get a resale certificate

Certificate of Occupancy

In some communities, an eBay business operating as a home-based business will need to get a home occupation permit in order to operate out of their home legally. Home-based businesses storing inventory in the owner’s house will also want to double check their insurance policy as business inventory may not be covered in the event of a loss.

 

While researching licenses and permits isn’t the most exciting thing to do when starting an eBay business. Be sure to take some extra time doing your research and talking with city officials to ensure the proper licenses have been obtained so your business can operate without any interruptions.

These are some of the most common business licenses, but there may be specific licensing that isn't listed. Before starting your business, be sure to check with the City Clerk, County Clerk, Chamber of Commerce, and/or Economic Developer in your area to get more information regarding business licensing.

For some additional peace of mind, companies like Incfile or Legalzoom can do the research and ensure you have all of the proper federal, state, and local licenses to start your business.

What Licenses Does An eBay Business Need?

What Licenses Does An eBay Business Need?

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