The process of starting a craft business begins with obtaining a number of required licenses. Craft businesses sell handmade and handcrafted wares. To create a legal craft business entity in the United States, you must obtain certain legal licenses and register your business with certain entities.
Crafts business owners need a seller's permit from their state because they sell taxable, tangible items. The purpose behind the seller's permit is to issue a tax identification number for your state. This tax identification number will allow you to file annual sales and income taxes. Check with your local state regulations regarding sales tax on the products you sell. Tangible, nonfood items like handmade crafts are taxable by state law in most areas.
Also known as DBA or "Doing Business As," the fictitious business name is a permit that you must obtain if you are doing business under any name other than your own. If your business name contains your own name, such as "Sally Shelly Crafts," you should not need to obtain a DBA permit. If your business name does not contain your name, such as "Seaside Crafts," a fictitious business name permit is required to notify the state that you are doing business under a name other than your own. You must make sure that your business name is not already in use in your state before registering.
You must have a city business license for the city where you are conducting your crafts business. This is the license requirement on the most basic level. However, you may need other business licenses if your company expands into other cities or states. What you sell, where you sell and to whom you sell will also impact the types of business licenses you need. If you are selling your crafts online or on a local level, a local business license is likely the only license you will require.
Additional licensing may be required, depending on a number of factors. Contact your local chamber of commerce to find out if there are any special licensing requirements for your area or for your type of business. Your local county clerk's office, which issues seller's and DBA permits, can also provide information on business license requirements.