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Topic: Opening an etsy shop - do I need a business license?  (Read 33941 times)
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miz_mook
« on: February 21, 2006 09:58:20 PM »

Hi, everyone.  I'm hoping for a little advice.  (Especially from anyone here in the Seattle, WA area!)  I want to open an etsy shop, but I don't know what the rules are about business licensing, collecting taxes, etc.  I was just looking on some state website on licensing small businesses and all the forms, etc, were freaking me out!

For those of you who opened etsy shops, did you need to apply for a business license?  What's the deal with collecting state tax, and declaring income on federal tax returns?  I'm not expecting this to be a large source of income (I have a full-time job, and this is just a side thing)... but I don't want to tick off "the man," you know.

Any advice on what steps to take or where to find some useful, easy-to-figure-out information would be most appreciated!!!!!
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michellegiordano
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« Reply #1 on: February 24, 2006 07:18:01 PM »

You don't need a business licence as far as I can remember, and I didn't see anything about collecting tax, but I live in canada so maybe they just don't care if its not in the states.  why not go to etsy and read the sellers faq, that will get you more answers, but you will have to work for them!   

HTH

Michelle Giordano
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Fallen
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« Reply #2 on: February 24, 2006 07:34:07 PM »

No you don't need a business license to open a shop on Etsy. All you need is a paypal account. Good luck with your shop.
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bobbie2oo4
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« Reply #3 on: February 25, 2006 12:10:10 PM »

Every state is different about collecting tax but generally, as far as I know, the rule is that you only collect tax from people that live in your state. And, you likely will not even do that because it is an online transaction.

If you collect tax from everyone - you're required to collect the tax of the state they're buying from... that is if I bought from you, I would pay the FL tax rate and not the WA tax rate. And then you would have to remit that tax payment to FL. Kind of crazy huh? So, you don't collect tax.

About business lisences (sp?) - you can be a sole proprietorship. Here is a link to the IRS where they explain what you have to do:
http://www.irs.gov/businesses/small/article/0,,id%3D98202,00.html

Good luck!!
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digitalmaven
« Reply #4 on: March 02, 2006 04:26:45 PM »

Well, you don't need to actually provide any business info/tax id to the etsy folks just to create an account.  However, if you're going to be selling things and running a proper business, you should probably be registered with the government, both locally and nationally, for tax purposes.  This woulld include getting a proper tax id, registering your business' name with the county/town, and all that, which depends on where you live.  Not everyone does all of this though, especially for those of us who only sell a few items on the side, but technically you're supposed to for anything you sell.

I hope this helps! Smiley
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froggerng
« Reply #5 on: March 08, 2006 06:11:10 PM »

I haven't done anything, although I should.  I don't want any extra paperwork just to make a few extra bucks, and I certainly don't want to pay taxes.  I think if you're only doing it "on the side" to make a lil extra money to buy more craft supplies, you don't need to register or get a license.
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Sockdiva
« Reply #6 on: March 11, 2006 06:11:26 PM »

I think you need to make around $400 a year at least, or else it's considered a hobby. I plan on keeping track of things, and see if I even get close. Then I'll do the work, otherwise, it's a hobby in my book!

Sockdiva!

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1ArtsyChick
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« Reply #7 on: June 19, 2006 06:24:09 PM »

You don't need a business license to open up your Etsy shop, but it's good business practice. Licensing your business encourages, maybe even forces you to take your shop and your business seriously, IMHO, and legally/technically, it's required for tax purposes.

The "hoops" you have to jump through aren't particularly arduous, especially for sole proprietorships. I'm in Arizona, and I registered my business name with my state and county. Next, I registered for my TPT (Transaction Privilege Tax aka sales tax) license, again for my state, county, and city. I fill out a simple monthly tax form, regardless of my sales, and that's that.

Registering for a business license, aside from giving you more legitimacy, also allows you to purchase your supplies at wholesale prices, which may become an issue if your business explodes -- and I hope it does!

Blue skies,
1ArtsyChick
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pastiche
« Reply #8 on: October 14, 2006 02:03:32 PM »

sorry to bring this topic up again, but i didn't want to start a whole new thread. i've been wanting to open my etsy shop for a while, but i'm still confused about the "business" end. i understand that etsy doesn't require you to be a registered business, but i feel like it would be easier for me if i kept things separate, ie, separate bank account, paypal, credit/debit card, etc. and to open a business bank account, i would obviously have to register as a business. anyone else have any info about this? i'm just so confused and i don't know where to start!!! i'm not planning on making huge money off of this, but i'd rather do it the right way to start off, just in case, one day, i end up doing this full time. i can dream, right? haha.
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henri
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« Reply #9 on: February 09, 2007 10:34:03 AM »

Hi!

I'm wanting to start a craft business through ETSY.  Here's a couple of questions I have:

1.  Will I need a business license?  I really don't have much cash to put into fees and licenses. 
2.  My husband has a couple of LLC's dealing with real estate.  Is there a way, for tax purposes, that I could lump my business up under his with little effort?

Currently, I don't plan to attend any craft fairs, although I may later.  I already have most of my crafting supplies ready to go.  I'm basically clueless and nervous as all get out about doing this.  I really don't want any IRS trouble, but at the same time, I need the cash pretty bad.

Thanks for the help!

Henri
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