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How To Get A Business License In Every State – For Ecommerce

how-to-get-a-business-license-in-every-state-–-for-ecommerce
How To Get A Business License In Every State – For Ecommerce

Starting an ecommerce business? Don’t forget to make it legal before you start selling your products.

Before opening your doors—whether real or virtual—you may need to obtain a business license or tax permit for the state where you’re setting up shop, and may need additional licenses or permits for other states where you operate.

When you register your business with your state’s Secretary of State, you’ll set up an EIN, so that you’ll be registered as a tax-paying entity, and can claim profits and losses against your business earnings. Registering your business not only ensures that you are operating within the law, but it also helps protect your brand and customers. It shows credibility and professionalism, which can attract potential clients and partners. Beyond that, you may be required to obtain specific licenses before you begin operating your business.

Some common types of licenses for ecommerce businesses include a general business license, reseller’s permit, sales tax permit, and home occupation permit. Certain regulated industries may also require additional types of business licenses or permits.

If you operate solely online with no employees, you’re not likely to need a business license in most states, but if you have both a physical retail location and operate online, and/or have local employees, you’re more likely to be required to get a business license.

How to obtain a business license

Each state has its own requirements and processes for obtaining a business license. The best way to ensure that you are following the correct steps is to research your specific state’s regulations. However, here are some general guidelines and resources that can help you get started.

Determine which type of license or permit you need.

As mentioned before, different states may have different requirements for ecommerce businesses. It’s important to identify the specific type of license or permit that applies to your business.

Research the necessary paperwork and fees.

Once you know what type of license you need, it’s time to gather all the necessary paperwork and find out how much it will cost. This information can usually be found on your state’s government website or by contacting your local business licensing office.

Apply for the license.

After you have completed all the necessary paperwork and gathered the fees, it’s time to submit your application. This can usually be done online or by mail depending on your state’s regulations.

Stay up to date with any changes or renewals.

It’s important to keep track of any updates or changes in regulations that may affect your business. Make sure to renew your license or permit before it expires to avoid any fines or penalties.

State by state requirements for business licenses

Alabama

If your business is based in Alabama, you can register for a “business privilege license” through the Alabama Department of Revenue in the county or municipality where your business is based. If your products are subject to sales tax, you’ll also need to obtain a business tax registration, otherwise known as a seller’s permit.

Alaska

All registered businesses in Alaska must apply for a business license, which can be done through the Department of Commerce. Since Alaska does not have a sales and use tax, you are not obligated to register for a seller’s permit unless you have retail locations in other states. However, businesses that brought either $100,000 in gross sales into Alaska or participated in over 200 transactions in Alaska in the last year must register their businesses with Alaska Remote Seller Sales Tax Commission (ARSSTC).

Arizona

Arizona doesn’t require a business license, though many cities or jurisdictions do. Visit the Department of Revenue to see what your requirements are. You will need a TPT license for collecting sales tax.

Arkansas

Arkansas doesn’t require a general business license, but does require a sales tax permit.

California

Business licensing requirements vary based on local jurisdiction and type of business. You can search CalGold to find out what permits are necessary for your business, and how to obtain them.

Colorado

No general business license is required, but ecommerce sellers must obtain a sales tax license from the Department of Revenue.

Connecticut

Connecticut doesn’t require a general business license, but certain industries require different permits and forms. The state’s digital business assistant can help you find what you need easily.

Delaware

Due to favorable tax and legal treatment, Delaware is a popular state to register a business in, even if you are physically based elsewhere. Delaware sellers do not require a sales tax permit, as it’s a tax-free state. Visit One Stop to set up your business license there and learn more about setting up a business in Delaware.

Florida

In Florida, only businesses operating in certain skilled trades are required to obtain business licenses. If you collect sales tax on your sales, however, you must fill out the Florida Business Tax Application.

Georgia

Georgia doesn’t have a statewide business license, but many municipalities do require licensing — search the Municipal Association to see what’s required. You’ll also need to obtain a sales and use tax number.

Hawaii

Businesses in Hawaii must register for the General Excise Tax (GET), which also covers the sales tax license.

Idaho

Idaho doesn’t require a state business license, but some cities do. Check your city office to find out the requirements. Under most conditions, your business will need a regular seller’s permit.

Illinois

There is no state business license, though many municipalities have their own licensing requirements. All sellers of taxable goods or services must obtain a Certificate of Registration or License.

Indiana

Indiana doesn’t have a statewide business license, though certain industries do, and licenses may be required based on the municipality. Sellers are required to obtain a Registered Retail Merchant Certificate (RRMC) to collect sales tax via InBiz.

Iowa

There is no general business license in Iowa, though business activity is regulated based on the profession. Check out SourceLink to see if your business has any licensing requirements. Ecommerce businesses will, however, be required to obtain an Iowa sales tax permit.

Kansas

In Kansas, business license requirements vary by county and industry — these links will help you find out whether you need to register for a license. You’ll also need to set up an account for managing and paying sales tax.

Kentucky

Kentucky’s licensing requirements vary by municipality and industry — visit Kentucky Business One Stopto find out if your business must register for a license. To collect sales tax, it’s important to complete the Kentucky Tax Registration Application.

Louisiana

As with many states, Louisiana’s business licensing requirements vary based on municipality and industry, but the state does require businesses to register for a resale certificate to collect sales tax. This can be completed through the LaTAP online system.

Maine

If your business is registered as a limited partnership or limited liability corporation (LLC), you will be required to register the entity with the Bureau of Corporations. You’ll also need to obtain a seller’s certificate to sell products through the Maine Revenue Services Website.

Maryland

In Maryland, a business license is required for most business types. You can register for licenses and permits through the Maryland OneStop portal. You’ll also need to register with the state comptroller for a sales tax license.

Massachusetts

Business licenses aren’t required at the state level, but you can check with your city or town to see if one is required. You’ll need to register with the DOR to collect sales and use tax.

Michigan

The state doesn’t require a general business license, but as with most states, licensing requirements may vary based on the industry and municipality. Ecommerce business owners should register for a sales tax license from the Department of Treasury.

Minnesota

Once again, a general business license isn’t necessary, but many businesses are required to obtain licenses based on their industry or jurisdiction. Find out your licensing requirements at eLicense. You can also apply for a Sales and Use Tax account online.

Mississippi

No state business license is required, but check with your local government to find out if you must obtain a business license. You can obtain a Sales and Use Tax Permit from the Department of Revenue.

Missouri

There’s no general state business license, but check in with your local government to see if any licenses are required. You can sign up for a sales tax license by applying with the Department of Revenue.

Montana

Montana is responsible for professional licensing, while local governments provide business licensing if required: Check out their licensing site to see if your business is required to obtain a license before operating. Montana doesn’t have a general sales tax, so no permit is required.

Nebraska

In Nebraska, licensing requirements vary based on locality and industry — you can find the information you need here. You will need to fill out a Revenue Tax Web Application to collect sales tax.

Nevada

Nevada requires nearly all business entities operating within the state to obtain a business license from the Secretary of State. Find out what you’ll need to do and how much it will cost here. You’ll also need to sign up for a sales tax permit with the Department of Taxation.

New Hampshire

There’s no general business license required here, but take a look at the state’s resource page to see if you’re required to apply for any permits or licenses. New Hampshire doesn’t have a general sales tax, so there’s no requirement to get a sales tax permit here.

New Jersey

There’s no statewide licensing requirement, but New Jersey offers a helpful breakdown of the different industries that do require permits or licenses to operate in the state. You can file a Business Registration Application online to collect sales tax.

New Mexico

As in many states, licensing requirements vary based on locality and industry. All sellers in New Mexico, however, must register for a Non-Taxable Transaction Certificate.

New York

In New York, many business types are required to apply for licenses and permits — you can visit the NY Business Wizard to find out what regulations apply to your business. You’ll also need to register as a sales tax vendor with the Department of Finance.

North Carolina

In North Carolina, business licensing requirements vary by industry and local government. Business Link North Carolina offers free consultations for entrepreneurs who want to find out what regulations apply when setting up a business. You’ll also need to register for Sales and Use Tax.

North Dakota

There are no statewide licensing requirements in North Dakota, but you must apply for a Sales and Use Tax Permit through NDTap.

Oklahoma

Oklahoma offers a drop-down menu to help you understand whether your business requires a license or permit. Ecommerce sellers will be required to register for a sales or use tax permit.

Oregon

Search Oregon’s license directory to see if a license or permit is required for your business type. Oregon doesn’t have a general sales tax, so a sales tax permit is not required.

Pennsylvania

No statewide business license is required, but different types of businesses may be subject to additional regulations — you can find out about required permits and licenses here. You can register for sales tax and various other taxes at the Department of Revenue site.

Rhode Island

Rhode Island doesn’t have a general business license, though licensing requirements may vary by industry or municipality. All businesses must register with the Division of Taxation to be able to make retail sales, whether online or in-person.

South Carolina

Many municipalities require business licenses or permits if you’re physically conducting business there — find the contact information for yours here. You can sign up for a sales and use tax account through the Department of Revenue.

South Dakota

The state does not mandate a general business license, though requirements vary by industry and local government. Sign up for a sales and use tax permit with the Department of Revenue.

Tennessee

Tennessee does require businesses with in-state locations to register with their local government for a business license if their gross receipts are at least $100,000. You can set up a sales and use tax account at the same time.

Texas

Texas offers a guide to understand whether a business license or permit is necessary to conduct business in the state. You can register for a sales tax permit here.

Utah

All Utah municipalities require businesses to obtain licenses to operate. You can find the contact details for your county, city, or town here. You can also register for a tax license here.

Vermont

Vermont doesn’t have a general business license, but you can check with the Online Business Service Center to see if one is required for your particular industry. All businesses must register for a Business Tax Account.

Virginia

Most businesses in Virginia will seek licensure from their local government. Visit the Business OneStop site to find the right contacts. Sign up for a sales tax account here.

Washington

Most businesses in Washington do require a general business license before launching operations — visit this site to find out more and apply. You can register for a sales tax permit at the same time.

West Virginia

West Virginia requires all businesses to obtain a business registration certificate, though other licenses may also be necessary. You can obtain a seller’s permit through the Tax Division.

Wisconsin

Wisconsin doesn’t require a general state license, but you can find out if you’re subject to additional regulations by visiting the One Stop Business Portal. You will be required to get a seller’s permit, which can be done here.

Wyoming

Wyoming has no formal business license requirements, though there may be regulations based on locality or industry. You’ll need to register for a seller’s permit, however.

Washington, D.C.

If your business is based in the District of Columbia, you’ll need a business license to operate, and can learn more about the requirements here. You’ll also need to register for a seller’s permit.

While we’ve provided some jumping off points, the requirements for setting up your business can vary greatly depending on where you are based, your business structure, the services you offer, and a number of other factors. Before launching, it’s always smart to consult with a business attorney or a free representative from the Small Business Administration, who can support you in making sure that you’ve fulfilled all of the compliance requirements before officially opening for business. 

Using an ecommerce app like Shopify Tax can also help you simplify tax collection and reporting requirements, including both cross-state and cross-border commerce regulations, ensuring that you stay in legal compliance wherever you’re selling. Once you’re up and running, you can streamline your ecommerce business operations by setting up a best-in-class returns management platform.

The post How to get a business license in every state – for ecommerce appeared first on Loop Returns.

This article originally appeared on Loopreturns and is available here for further discovery.
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