How to Create a Profitable Side Hustle While Abiding by State Laws
The internet has given creatives the ability to sell their work to customers worldwide. With sites like Etsy growing in popularity, more independent creators are turning impressive profits on their projects. But could they face imminent legal consequences for selling without a business license?
Business owners are legally required to hold a valid license in order to operate. In some cases, this includes Etsy storeowners.
Cases When You Need a Business License for Your Etsy Shop
Users can determine whether they need a business license by evaluating the size and practices of their shop. Creators need a license if:
- They are operating as a business
- They are operating for profit
- They are in a partnership or have established an LLC
Users do not need a business license if:
- The store is a hobby
- The user is not making a profit
Finding the Appropriate License
Business licensing requirements vary based on the state, county, and city in which you are conducting business. Users may need a:
- City business license
- County business license
- DBA (doing business as) certificate if you are selling under a company name or alias
- Florida state sales tax number
- Permit to conduct business out of your own home
Consequences of Operating a Business Without a License
Etsy creators who fail to obtain the proper license for their online business are subject to a first-degree misdemeanor charge punishable by up to one year in jail and a fine of up to $1,000. Additionally, they could be ordered to pay restitution or complete probation. If convicted for a second time, the shop owner faces a third-degree felony charge, carrying penalties of up to five years in prison and a fine of up to $5,000.
If your Etsy shop has landed you in legal trouble and earned you an accusation of operating a business without a license, contact Hubbs Law Firm.