Did you think that all you need is a website to sell your products online?  If you answered yes, you may be wrong. The answer varies from state to state, but generally, all businesses need to get a license. For most of the licenses, you can apply online to save time and postage.

State & Local

One area you may want to check first is your municipality. You may need a business license and a peddler’s permit if there is no physical storefront. There may also be special local requirements that you need to be aware of. Your local government will be able to tell you what those are. You will need to register with your state and get a tax identification number.

Federal

You will need a Federal tax ID number. According to the United States Internal Revenue Service, you will need to apply for an Employer Identification Number (EIN) if you:

§         Have employees

§         Operate as corporation or partnership

§         File tax returns for employment, excise, or alcohol, tobacco or firearms

§         Withhold taxes on income, other than wages, paid to non-resident aliens

§         Have a Keogh plan

§         Are involved with any of the following:

o         Trusts, except certain grantor-owned revocable trusts, IRAs, Exempt Organization Business Income Tax Returns

o         Estates

o         Real estate mortgage investment conduits

o         Non-profit organizations

o         Farmers' cooperatives

o         Plan administrators

o        File with state corporation commission

Every business needs one or more licenses or permits to operate. These licenses can range from an operating license to specific permits depending on your location. The laws vary quite a bit from state to state, so it is important to understand and follow the rules. By not complying, you are opening yourself up to potentially expensive fines and you are putting your business at risk.