Do You Need a Business License to Sell Online?

If you’ve thought about selling goods and services on the Internet, you have probably considered getting a business license. Business licenses are required in many states before you can legally sell online or offline. And you may be wondering if you really need a business license to sell online. Are the licenses that I’m talking about required at all? The answer depends on what you’re trying to sell and how you plan to sell it.

Think of your home-based business like a storefront. You need a business license if you want to open a brick-and-mortar store in the city limits. Likewise, if you plan to start selling online, you’ll need a business license. The only difference is that you can operate a home-based business without a local jurisdiction’s approval, as long as you follow all state and local laws. But if you want to start selling online, you’ll probably have to get your business license from your local jurisdiction.

So, why do you need a business license to sell online? Well, you may think that you can get around it by simply listing your home as your business address on your sales receipts. That may work in some states, but it won’t work elsewhere. For one thing, you can’t list your home as your place of business unless you get a state or local permit.

That brings us to the question of whether you really need a business license to sell online. It’s certainly not a requirement in every state or jurisdiction. Some states may require a seller to get a business license to do so. Others may not. Still others may not require a seller to get a license at all. But if you’re going to do business over the Internet, you’d better make sure you have the licenses before you do business.

If you’re just going to be selling products over the Internet, it’s probably not necessary for you to obtain a state or local permit. However, if you do plan to run an offline store, it’s probably necessary for you to obtain a business license – even if you don’t plan to sell online. In order to operate a business, you need to pay taxes. Those tax bills are likely to include income tax.

If you do plan to sell online, then you will probably need a home occupation permit. This type of license is a simple to get. You can get a home occupational permit for about $125 in most areas.

The tax benefits – which include a reduced rate of tax – that come along with online business licenses may also make it more worthwhile for you to get this type of license. That’s also true if you do plan on starting your own online business. You also won’t have to deal with the paperwork and licensing costs that you would have if you were starting a brick-and-mortar business. There’s also less risk of getting caught by the IRS with an online business license.

It’s really just a matter of determining which state or local jurisdiction will allow you to sell online. Most people start out in the bigger cities like New York or Chicago, but there are still some states and local jurisdictions where you may be able to do business without a business license. Just make sure that your vendor contracts and sales receipts show that you were paid in full. If you ever have any doubts as to whether or not you may be able to sell online in a particular area, it may be a good idea to check with your local jurisdiction.