A Business Operation License
A Business Operation License gives you the authority to sell and conduct business in your state, county, or city. Generally, every business, whether online or otherwise, will need one of these licenses to operate within a legal realm.
The qualifications and regulations differ from state to state, so we recommend researching the necessary licensing where you want to operate and how to apply for one. Thankfully, the qualifications for getting a Business Operating License are not very stringent.
An EIN
You will also need an EIN or Employer Identification Number. This is a tax number issued by the federal government by the IRS that identifies you as a business. Moreover, it also shows that your business is a distinct tax identity.
Technically speaking, this is not a license, but an Employer Identification Number ensures that your online business pays payroll taxes and stays in line with local tax laws.
Although not all types of businesses, especially sole proprietorships, will need one by law, it is recommended to have one to make it easier to do your taxes. If you hire employees, start a corporation, or have a separate business bank account, you need an EIN.
A DBA License
DBA stands for Doing Business As, which means that your company is under a different name than your own. This license gives you the right to use a name other than your own to operate an online business. For instance, your name might be John Black, but you want to run Bob's Online Pets' Toy Store.
Whatever the case, you will need a Doing Business As license to operate an online business under a name other than yours. Moreover, you may also need a DBA license to open a bank account. If you plan to run a home-based e-commerce business, this is something we recommend looking into.
A Sales Tax License
If you are a business based in your home and plan to sell services or products online, you will require a sales tax license because you must pay sales tax on all goods and services you sell online.
Not only does this license prove that you are paying sales tax on those items, but it also allows you to do so in the first place. But, again, check the laws and regulations for your state, as these can differ from one area to another.
You may also want to research if you need other tax licenses for your residence. Remember that there can be heavy fines and other legal ramifications if you try to collect sales tax without a Sales Tax License.
A Seller's Permit
Most businesses that sell services or products online will need a Seller's Permit.
The fees and requirements to get a seller's permit differ from one state to another, so research these costs.
Always check local agencies to ensure you get the right type(s) of license(s). Remember that even selling intangible or digital goods requires a seller's permit.
However, you can always apply for a Temporary Seller's Permit, which is easy to obtain. Then, as the name implies, you can sell goods online for a short period, usually, 90 days before the permit expires.
A Home Occupation Permit
If you plan to run your online sales business from home, you will need a Home Occupation Permit. This license allows you to run a business from home instead of a commercial property. This also allows you to avoid commercial permits.
You should file for one of these permits as it ensures your area is zoned for running a home business and that your business doesn't add to unnecessary noise or traffic in the community.
An Occupational License
You may be required to get an occupational license depending on the type of online business you have. For example, you may not need one for selling basic goods, but it will depend on where you reside. Therefore, always research whether or not your type of business requires an Occupational License before you start.
