Do You Need a Business License to Sell on Etsy?

Instasize Team
July 5, 2024

Do You Need a Business License to Sell on Etsy?

Let's cut to the chase: Do you need a business license to sell on Etsy? Well, it depends.

Assessing Your Business Structure

Before jumping into the details, you need to figure out what kind of business you're running.

  • Are you running a hobby or a business?
  • Is your Etsy shop a side hustle or a full-time gig?

Different rules apply based on the nature of your shop.

Conditions That May Require a Business License

There are certain conditions that might trigger the need for a business license when selling on Etsy:

  • Your Location: Local laws vary. Some cities or states require a business license regardless of the scale of operations.
  • Type of Products: Specific items might require special permits (e.g., food, skincare products).
  • Revenue Threshold: Exceeding a certain income level might require you to legitimize your venture officially.

How to Check Local Requirements

  • Contact Local Authorities: Call or visit your local city or county office to get accurate information.
  • Online Resources: Websites like your local government’s official site or business resource centers might have the info.

Do Most Etsy Sellers Have a Business License?

A look at real-world experiences:

  • Surveys & Forums: Many discussions on Reddit and Etsy forums suggest that many sellers operate without a business license, especially when starting out.
  • Case Studies: Sellers who turn their side hustle into a primary income source usually find it beneficial to get licensed.

Benefits of Getting a Business License

Having a business license can bring several advantages:

  • Legitimacy: Builds trust with customers.
  • Taxes: Easier to handle sales tax collections and deductions.
  • Growth: Scalability options if you want to expand your business.

Getting a Business License

Here’s a quick rundown on how to get started:

  • Research: Find out which type of license you need based on your product and location.
  • Application: Fill out and submit necessary forms, usually available online or at your local office.
  • Fees: Be prepared to pay a fee. The cost varies widely; check with your local authorities.

Instasize for Etsy Sellers

While we're on the topic, making your Etsy store look professional can help boost sales. Instasize can be your go-to tool for:

  • Image Resizing: Perfectly fit all Etsy image requirements.
  • Image Cropping & Background Removal: Create clean, professional product photos.
  • Filters & Collages: Make your product images stand out.

Instasize can help you refine your visual content, making your Etsy shop more appealing.


Do all states require a business license for selling on Etsy?

No, it varies by state and even by city.

Can I start selling on Etsy without a business license?

Yes, but check local regulations to make sure you’re compliant.

What kinds of products definitely need a business license?

Items like food, skincare, and anything regulated.

Is it hard to get a business license?

Not generally. It's mostly about knowing what you need and filling out the right forms.

How does Instasize help Etsy sellers?

It optimizes your images to make your shop look professional and trustworthy.