What license is needed to open a thrift store? Several of them are available.
All you need to do is continue reading this post. We’ll highlight all the permits you’ll require to set up such a venture. But before we do that, let’s first understand the term thrift store.
What Licenses and Permits Do I Need To Open A Thrift Store?
Planning a thrift store requires more than knowing what to sell, how to sell it, or how to make a profit.
You’ll hoover through several critical steps, including obtaining a license for your business. A local, state, or federal permit will let you open a thrift store anywhere in the country.
Additionally, it’ll ensure your enterprise starts on legal grounds. Plus, it indicates compliance with government laws.
What’s a Thrift Store
These are businesses known to resell various items such as clothes, furniture, and home goods.
They also provide a range of inventory that constantly changing as new items arrive. Thrift stores are known for keeping their prices affordable. Most of the stock found at these enterprises is pre-owned.
However, we have some stores with closeouts and clearance items they’ve obtained from other ventures. These could be storage unit auctions, garage sales, or estate sales.
Most people prefer to shop at thrift stores for low and affordable prices. But we have those who appreciate the business for their new or vintage items.
What’s more? Thrift stores support upcycling valuable goods intended to be disposed of. This allows shoppers to find new ways of reusing items with an eco-friendly benefit.
According to reports, the business can make an average of $100 to $200 daily. This means it’s another way to make a decent income.
Essential Licenses for Thrift Stores
There’s more than one authorization you can obtain for your thrift store. However, the license requirements vary among states in the country.
Here are some standard permits you’ll need for your business.
General Business License
Virtually all states in the country require businesses to obtain this permit. However, demand is often strong at the city level. Therefore, consider acquiring such credentials when setting up your enterprise.
Although thrift stores are rarely regulated at the state level, some cities demand operating licenses.
For instance, a secondhand dealer general license is required for businesses that buy or sell used clothing. This is according to the New York City Department of Consumer and Worker Protection.
Moreover, you’ll also need to be licensed if you live in regions like Wisconsin and Kenosha. These cities demand a secondhand dealer permit to buy and sell pre-owned articles.
It doesn’t matter whether it’s jewelry, clothing, or other taxable commodities.
In the U.S., there’re restrictions on selling certain items due to their toxicity. Such items include lead paint, specific infant and toddler products, and cribs of a certain age.
So before you open up a thrift store, you’ll be required to obtain a federal license. The U.S. Consumer Product Safety Commission provided this oversight.
Business Name Registration
This isn’t a business license, but it’s worth obtaining.
Most states will require you to have a registered enterprise name for your thrift store. The procedure to get such a credential differs among states and types of company entities.
You’ll need a registered company name to open a sole proprietorship or partnership business. However, there’s no need for LLCs and Corporations to register an enterprise name.
That’s because their names were recorded at the time of formation.
Before operating a thrift store, you must register and have a company entity.
Having a legal entity means your venture is willing to cooperate with federal, state, and local laws. Additionally, it’s an indication of how organized your enterprise is.
LLCsThe U.S. has four business entities: proprietorships, sole proprietorships, LLCs, and corporations. These entities have perks and drawbacks regarding cost, liability protection, and administration.
Federal Employer Identification Number
You can also refer to it as Federal Tax Identification Number. A unique code identifies a company with the Internal Revenue Service (IRS). The code consists of nine digits.
All businesses with workers, partnerships, and LLCs are expected to obtain this unique code. But sole proprietorships and single-owner LLCs without employees should opt for the owner’s Social Security Number.
Sales Tax Permit
This is also known as a business Tax Number or Tax ID Number. The credential is necessary to sell products in a retail setting or offer certain services.
Before issuing you this license, an account will be created with the state’s Department of Revenue. The idea is to enable the state to collect and remit sales tax.
Certificate of Occupancy
Are you opening a thrift store in a commercial building? You’ll need this credential when starting this venture in most parts of the country.
The certificate is obtainable at the city or county of business. Once you obtain such authorization, you can occupy and operate from a building.
Meanwhile, before the certificate of occupancy is issued, certain conditions must be met. For instance, the building must comply with all zoning regulations, building codes, and other local essentials.
You can consult your local zoning department to ensure your enterprise legally operates outside the desired location.
You’ll need a resale permit to open a thrift store and resell customer items. It’ll allow you to buy goods without covering the sales tax on those items.
In other words, you can source tax-free inventory instead of paying the vendors. The sales tax for such products will be billed to the final consumer.
Will I Pay to Obtain a License When Opening a Thrift Store?
You must know whether you must pay for a thrift store license. This will help you make informed decisions regarding your finances.
Whether or not you’ll pay for the authorization above depends on certain key factors—the state you wish to operate, license type, and business entity.
Therefore, you must consult an expert to know the cost implications.
Thrift stores can be an exciting and profitable business.
Nevertheless, you’ll need to go through several processes before you set one. One crucial step you’ll need to take is to obtain a license for your enterprise.
Several are above you if you’re wondering what authorization you’ll require. Before taking any significant step, consult your legal adviser to determine which one to get.