If you live in California then you will need a business license to sell online. That means you will need a business license to sell on Etsy. Though it depends on what type of business you have and what you are selling. If you are a sole proprietor then you don’t need a business license. However, you must obtain a seller’s permit if you:
- Are engaged in business in California and,
- Intend to sell or lease a tangible personal property that would ordinarily be subject to sales tax if sold at retail
Jump To A Section
- 1 Key Takeaways
- 2 Certificate Of Registration—Use Tax Requirements In California
- 3 How To Create An Account On Etsy
- 4 How To Open A Shop On Etsy
- 5 FAQs About Business Licenses
- 5.1 1. What Does Engaged In Business Mean?
- 5.2 2. What Information Is Required When Registering For A Business License?
- 5.3 3. Is There A Fee Charged For A Seller’s Permit?
- 5.4 4. If I Am No Longer In Business, Can I Keep My Seller’s Permit?
- 5.5 5. What Are The Obligations Of A Seller’s Permit Holder?
- 5.6 6. Is My Seller’s Permit The Same As A Business License?
- Both the wholesalers and retailers must have a license to sell products online in California
- You can apply for temporary seller’s permit if you are only planning to sell products less than 90 days
- In California, you have to register with the CDTFA for a Certificate of Registration
- You have to register an account with Etsy to sell your products
Certificate Of Registration—Use Tax Requirements In California
If you are selling tangible merchandise to customers for storage, use, or other consumption in California then you have to register with the CDTFA for a Certificate of Registration—Use Tax. Usually, you are engaged in business in California if you are a retailer that:
1. Owns or leases real or tangible merchandise, including a computer server, in California; or
2. Maintains, occupies, or uses, directly or indirectly, or through a subsidiary or agent, a permanent or temporary office, place of distribution, sales or sample room, warehouse or storage place, or another physical place of business in California (whether or not it is related to your sales activities); or
3. Has persons operating in California under its authority for the purpose of selling, delivering, installing, assembling, or taking orders for tangible merchandise; or
4. Derives rentals from a lease of tangible merchandise (including vehicles, vessels, and aircraft) situated in California; or
5. Beginning April 1, 2019, has total combined sales of tangible merchandise for delivery in California by the retailer and all persons related to the retailer that exceed $500,000 during the preceding or current calendar year.
How To Create An Account On Etsy
Opening an account in Etsy is completely free. Moreover, you can easily create an account on Etsy. Below is the process –
1. First, go to etsy.com from a browser on your computer
3. Now click on the Register from the top of the website
4. Fill out the form with all the required information
5. A confirmation mail will come to your mail address, click to confirm
6. Now Sign in to Etsy and complete your profile
How To Open A Shop On Etsy
You must have an account on Etsy to open a shop. Once you have completely updated your profile and bio you can open a shop. Here are the steps –
1. First login to your Etsy account
2. Now click on “Sell on Etsy” from the top of the website
3. Then click on “Open your Etsy shop”
4. Select your shop language, country, and currency, then click Save and continue
5. Now choose your shop name and then click Save and continue
You have to open the shop from the website on a desktop web browser. The Etsy app doesn’t allow you to open a shop. But you can manage the shop from the Etsy app.
FAQs About Business Licenses
1. What Does Engaged In Business Mean?
You are engaged in business in California if you:
1. Have an office, salesroom, warehouse, or another place of business in this state (even if the location is only temporary)
2. Have a sales representative, agent, or canvasser operating in this state
3. Receive rental payments from the lease of tangible personal property in this state
2. What Information Is Required When Registering For A Business License?
You have to provide information while registering for a business license. They are:
1. Driver License
2. Social Security Number (SSN)
3. Email Address
4. Supplier Name/Address
5. Personal References
6. Bookkeeper/Accountant Address and Phone Number (if applicable)
7. FEIN (Partnership, Association, Organization, Trust, Estate, Joint Venture, 8.Receivership/Fiduciary, Unincorporated Business Organization, Corporation, Limited Liability
9. Partnership, Limited Partnership, Limited Liability Corporation)
10. California Secretary of State Entity Number (Corporation, Limited Liability Partnership, 11.Limited Partnership, Limited Liability Corporation)
Officer, Member, or Partner Information (date of birth, SSN, or driver license, and address)
Agency Name (Federal, State, and Local Government)
Contact information of the person(s) who maintains the books and records (name, address, and phone number)
If you apply for a seller’s permit then you have to provide additional information –
1. Projected monthly sales
2. Projected monthly taxable sales
3. Products to be sold
3. Is There A Fee Charged For A Seller’s Permit?
No, there is no fee charged for a seller’s permit but the CDTFA may require a security deposit for any unpaid taxes. The amount of security will be determined at the time you apply.
4. If I Am No Longer In Business, Can I Keep My Seller’s Permit?
Your seller permit is only valid when you are actively engaged in business as a seller. If you are no longer operating the business then you should return your permit to the CDTFA for cancellation. There is no point in keeping the seller’s permit if you aren’t selling anything. Moreover, if the CDTFA finds out you aren’t running the business anymore then they will cancel your permit.
5. What Are The Obligations Of A Seller’s Permit Holder?
If you have a seller permit then you have some obligations to follow. You are required to –
1. Report and pay sales and use taxes
2. Keep adequate records
Moreover, you also have to inform the CDTFA if you –
1. Change your business address
2. Change the ownership of your business
3. Add or drop a partner
4. Sell your business
5. Buy another business
6. Discontinue your business
6. Is My Seller’s Permit The Same As A Business License?
No, the seller’s permit and business license are not the same. Depending on the city you live in, you have to contact your city and/or county business license department to obtain a separate business license.
Last Updated on October 7, 2022 by Magalie D.
Magalie D. is a Diploma holder in Public Administration & Management from McGill University of Canada. She shares management tips here in MGTBlog when she has nothing to do and gets some free time after working in a multinational company at Toronto.