Do you intend to sell handmade crafts but wonder if you need a business permit?
Don’t worry; we’ll tell you a few legal things you should know. This will help you prepare before selling at craft fairs and flea markets. Let’s first respond to your question before looking at other important things.
Do You Need A Business License To Sell HandMade Crafts?
A business license is critical for anyone interested in selling taxable items. It also applies to those leasing personal properties that are taxable and tangible.
Whether you’re making or selling, you’ll still need this credential. It’ll allow you to obtain sales tax from clients and report those equates to the state.
Is It Necessary to Obtain a Business License to Sell Crafts?
There needs to be a more straightforward answer as to whether you’ll require a business license to sell crafts. That’s because there’s no specific permit allocated to selling these items.
But generally, selling crafts legally without needing approval is unlikely. Most counties will require you to own an enterprise permit if you intend to make a profit from your venture.
Therefore, if you’re setting out to profit from selling crafts, you’ll likely require a business license. However, the type of authorization you will obtain depends on where you live, among other factors.
Below are a few approvals you may need for your craft business.
General Business Permit
This is one of the credentials you may need to run your craft enterprise unrestricted.
While this is a generally accepted permit, it’s more commonly found at the city level. You may call your country’s Department of Taxation for more details or confirmation.
Business Name Registration
Having a registered business name doesn’t mean you have a license.
It’s simply better than not having any legal backup for your venture. Many states require you to sign up for your business and have a unique name when filling it out.
The name registration may be different from one state to another. Therefore, you’ll need to research which procedures are specific to your region.
Sales Tax License
You’ll undoubtedly need a tax ID number to sell products, including crafts.
Before being issued such a permit, you must open an account with the state’s Department of Revenue or the name taxing agency. You may also need additional licenses to hire employees for your enterprise.
This credential is critical if you intend to buy inventory to sell to customers.
Now, a seller’s license will allow you to purchase stock instead of paying the sales tax to their vendor. Sales tax is often charged to the end-user of the product.
In more straightforward terms, having a seller’s license means you’ll not pay sales tax for items being resold. However, sales tax will still be needed for supplies or equipment.
Certificate of occupancy
In most cities, you’ll need this credential before operating a craft store in a commercial building or setting.
You can obtain this license either from your city or county of business. This will let you occupy space in a facility that complies with zoning codes, rules, and other essentials.
So before starting your business, you can check with the local zoning department. That way, you can ensure your business starts on legal grounds.
What About Selling at Craft Shows?
Do you require a license to sell your crafts at shows? Of course, you’ll likely need enterprise authorization to sell at craft shows.
Since your products are homemade, you may have the show organizer ask for selling company licenses, tax IDs, etc., before accepting you as a vendor.
Even if you live in regions that don’t require authorization to sell crafts, it’s critical for your business. First, some city inspectors may stop you and demand answers concerning where you run your enterprise, how you label your crafts, and more.
Secondly, you can get a competitor who has undergone all the license hoops. Such competitors will be granted access to sell at every craft shows in the country.
In other cases, they might report your enterprise for now having the appropriate permit. Of course, you’ll have enough explanation to give the authorities.
For you to prevent yourself from embarrassment and fines, it’s essential to obtain the necessary license for your craft venture.
Will I Require a License to Sell Crafts Online?
It’s possible to sell your handmade crafts via reputable internet-based platforms such as Etsy, Facebook, eBay, Craigslist, etc. But will there be a need for any permits?
Yes. Online businesses or transactions must follow the same rules as offline. So you’ll require authorization to sell via any of these platforms.
However, online companies like Etsy and Shopify only sometimes check businesses that use their site for licenses, registration, and permits. But that doesn’t mean you don’t need one.
Usually, marking your craft business online has a high chance of sales. That’s because you’ll be open to customers from all around the world. However, your success may only be feasible with a license.
Ways to Know If You Require a Business License to Sell Craft
Fortunately, there are several ways to know if you’ll need a craft business permit. Among them are your jurisdiction, enterprise activities, financials, and products to sell.
These are the factors to consider whether you’re running a sole proprietorship or out of your home. Allow us to review a few of them.
Before you set out to sell crafts, contact the law for your area or where you intend to do business. They’ll let you know if your venture type demands authorization.
The bank may demand a proper license before setting up a company account for you. The same rule applies when you want a loan to boost your venture.
Products You’re Selling
What you intend to sell can also determine whether you’ll require authorization. In this regard, homemade and industrial products will need proper licensing before being sold to customers.
This is all we have regarding whether you’ll need a license to open a craft business. As you can see above, you’ll need one before selling anywhere in the country.
You’ll need authorization to serve as a vendor even at craft fairs. So to start on a legal footing, obtaining one is critical when venturing into such an enterprise.