Checklist in Obtaining E-Commerce Business License in the US

Obtaining the necessary e-commerce business licenses protects your business from possible federal lawsuits and makes you a legitimate online business operator in the U.S.

To comply with these requirements, take note of the following information:

Obtaining the necessary e-commerce business licenses protects your business from possible federal lawsuits and makes you a legitimate online business operator in the U.S.

To comply with these requirements, take note of the following information:

Types of e-commerce licenses in the U.S.

1. Federal business license - for businesses regulated by a federal agency.
2. State-level business license - this type of license differs from one state to another, so it’s best to check with your state, county and city.

Licenses and permits you may need 

1. Business Operation License - this license makes your business legal and credible whichever city, country or state you operate in.
2. Employer Identification Number (EIN) - EIN is a federal tax ID issued by the Internal Revenue Service (IRS) which lets you separate your personal funds from your business’s finances. 
3. Doing Business As (DBA) License - a prerequisite if the name of your business is different from your legal name. 
4. Seller’s Permit - a legal requirement to sell tangible or intangible products online.
5. Sales Tax - a prerequisite if you’re selling taxable products and services. 
6. Home Occupation Permit - if you operate your business at home, this document proves that your day-to-day operations aren’t causing any trouble in your neighborhood.
7. Occupational License - this is necessary if you’re offering a professional service such as accounting, that requires a license. 

What you need to get these licenses

Make sure to prepare the following before applying for the aforementioned licenses to ensure a smoother application process.

1. Business legal structure - Are you a sole proprietor, limited liability corporation (LLC), corporation, or partnership?
2. Breakdown of business activities - What is the nature of your business?

• Sales tax license - Do you have the authority to collect and remit state and local states tax?

Business license fees

Most licenses may cost anything between $50 to $400.

Take note that the cost of business licenses depends on your industry and state. Aside from the actual license fee, you may also need to pay for a processing or filing fee. If it has an expiration date, you’ll also need to pay a renewal fee.

Applying for licenses may be a tedious job, but it’s a necessary step to ensure the legality of your online business operations.

If you’re new to the e-commerce industry, let our accounting experts help you stay on top of your finances. D&V Philippines can provide you with the best finance and accounting support to simplify your processes. To learn more, you can download our free guide E-Commerce Accounting Solutions, or get in touch with us today!