Do I need a license to sell on the Internet?

June 2, 2008: 9:21 AM ET

What paperwork you'll need varies widely by location.

Chuck Jones, Akron, Ohio
Dear FSB: Do I need a license to sell retail clothing via the Internet and word of mouth? There's no storefront involved.

By Lenora Chu, Fortune Small Business contributor
Dear Chuck: In general, Internet sales and Web stores are not regulated by any particular agency, so a license is not needed.

Should you open a physical storefront in your hometown of Akron, however, you would need a vendor's license and tax identification number from the city's tax department, says Kim Ickes, director of operations of Akron's Better Business Bureau. However, even in this case, you would not need to apply for a professional business license.

Note that requirements vary greatly by state and municipality, and also depend on the type of business. For example, the state of Ohio does not require general contractors to hold a professional license, although many other states do, Ickes says.

A California designer who sells clothing, plush toys and accessories through her online store found she did not need a license.

"That's the genius of selling online," says Wendy Bryan, owner of Los Angeles-based I Heart Guts, a line created around, yes, it's true, the concept of happy internal organs.

However, should you want to display your clothing for sale at design expos or local fairs, you'll need a state's seller's permit. Bryan was able to secure one for California by calling the State Board of Equalization.

Another consideration may be local statutes that govern running a business out of your home, says small-business advocate Jim Blasingame.

Apartment or condominium complexes may also have association bylaws or rental guidelines for home-based businesses. Find a copy of the appropriate document and proceed accordingly, Blasingame says

Give us your advice: Check out recent "Ask & Answer" questions.

Related links:

How to protect your creative work

How to commercialize your invention

Can I patent someone else's work?

A guide to what you can (and can't) patent

If I pay for creative work, do I own it?

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