Do You Need A Business License To Sell On eBay?

When starting out any business, there are a few key things you need to do in order to give yourself the best chance of success. In this article, we’re going to take a look at how to register an eBay business.

Related: How to start an eBay store

Do eBay Sellers Need a Business License?

Not necessarily. eBay itself does not require that merchants on its platform hold a particular business license. However, depending on where your business is located, the government may require you to register for specific permits or licenses.

A few states, but more commonly cities require a business to be licensed – even a home-based business.

Related: Do I need a business license?

Another common state registration is to obtain a sales tax permit. Sales tax is confusing because each state has different thresholds for reporting sales made to its residents. eBay is currently required to charge internet sales tax on purchases in 34 states, however, you will want to check the remaining states to see if you need to register for a sales tax permit and remit sales tax.

Related: How do I get a sales tax permit?

It should be noted that you can purchase inventory that is being resold by using a state resale certificate. This certificate is presented to your vendor and instead of them charging you sales tax, the end-user of the product (presumably your customer) pays the final marked-up product.

Related: How to get a resale certificate

Another registration to look at is the Federal Employer Identification Number (also referred to as a FEIN, Employer Identification Number, EIN, or informally a tax ID number). This is a unique nine-digit number provided by the Internal Revenue Service to identify a business.

A business will only need this number if they are a partnership or corporation, or a Limited Liability Company (LLC). A sole proprietorship with no employees will use the owner’s social security number.

Related: How to apply for an EIN

Last, a handful of states require an auctioneer’s license based on whether your business sells items on behalf of others on eBay. Consult an attorney for more information about this rare situation, as well as the legalities around operating auctions on an online marketplace.