Often yes. Selling online does not exempt you from local rules: the SBA says licensing and permit requirements depend on your business activity and location, and local governments set many of them, including zoning rules that can apply to home-based businesses. A federal license is needed only for regulated activities such as alcohol. ProfitDrawer's startup guides give the same advice: check with your city, county and state before your first sale. The SBA says registering a business usually costs under $300 in total.
What an online seller usually needs to check:
- City or county business license. Many places require a general license even for a business run from home. Call your city or county clerk.
- Home business and zoning rules. The SBA notes zoning ordinances can still apply to home-based businesses.
- State registration. If you use a business name other than your legal name, most states require a DBA registration.
- Sales tax. Ask your state revenue department whether you must register to collect sales tax on what you sell, and how marketplace sales are handled in your state.
- Product rules. Food, cosmetics, children's products and alcohol can need extra permits.
The SBA suggests starting with your secretary of state's website for state requirements, then your county and city. Fees vary by place and activity.
Keep a simple record of each license or permit, its number and its renewal date, and track sales and fees from your first order so income totals are ready at tax time. General information, not legal advice.
Source: Apply for licenses and permits (U.S. Small Business Administration) · Updated
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General information, not tax, legal or financial advice. Check the rules for your state and your situation.