People can sell handmade, antique, and one-of-a-kind things on Etsy, an online market. You might be unsure if you require a business license if you intend to sell on Etsy in Washington. The answer is that it depends on your area and the kind of goods you are selling.
In Washington, a Washington State business license is required if you are selling goods that are subject to sales tax. Digital goods, tangible physical property, and certain services are all subject to sales tax. You do not need a business license if you are selling things that are exempt from sales tax, such food and groceries.
Additionally, you must register for the Business and Occupation (B&O) tax if you are selling goods that are subject to this tax. A gross receipts tax called the B&O tax is levied against companies in Washington. You might not need to register for the B&O tax if you are selling on Etsy for fun and not making a profit.
On the sale price of an item, excluding shipping and taxes, Etsy levies a 5% transaction fee. Additionally, Etsy levies a $0.25 + 3% transaction processing fee.
Do I Need a Business License in Washington to Sell on eBay? Similar to selling on Etsy, the things you are selling and your region will determine if you need a business license to sell on eBay in Washington. You must obtain a Washington State business license if you are selling goods that are subject to sales tax. However, you do not require a business license if you are selling goods that are exempt from sales tax, such as food and groceries. Is Selling on eBay Considered Self Employment, Likewise?
Yes, eBay selling is regarded as self-employment. If you sell items on eBay for a profit, you must disclose your income to the IRS and pay self-employment taxes. Social Security and Medicare taxes, which are normally 15.3% of your net earnings, are included in self-employment taxes.
eBay will give you and the IRS a Form 1099-K if you sell more than $20,000 worth of items and conduct more than 200 transactions there in a calendar year. The total dollar amount of credit card and third-party network transactions you received during the year is reported on this form. However, you must still report your income to the IRS even if you do not receive a Form 1099-K.