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ToniSandoval
Level 1

Do I need a business license to write of expenses for my etsy store?

Hello, I recently opened up an Etsy store to make some extra income selling crafts. This is my first start-up business and I have spent a lot of money in preparation for opening my Etsy store, including purchasing shipping supplies, tech, and development costs for items listed in my store. Do I need a specific business license in order to write off these business expenses on my taxes? Or am I allowed to just write them off without one?

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Donna F 77
Employee Tax Expert

Do I need a business license to write of expenses for my etsy store?

Congratulations on your new Etsy store!  For purposes of your federal and state tax returns, you are not required to have a business license to claim the income and expenses from your Etsy store business.  Business licenses are a requirement of localities (city, county, town, etc).  You should contact your locality as soon as possible to find out if you are required to have a business license if you are operating the Etsy store out of your home.  If you have a separate office location, then you would contact that locality.  Generally, if you do not obtain the business license when you are supposed to, you will be assessed penalties and interest when the locality gets information from your state tax return and knows you are running a business.

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1 Reply
Donna F 77
Employee Tax Expert

Do I need a business license to write of expenses for my etsy store?

Congratulations on your new Etsy store!  For purposes of your federal and state tax returns, you are not required to have a business license to claim the income and expenses from your Etsy store business.  Business licenses are a requirement of localities (city, county, town, etc).  You should contact your locality as soon as possible to find out if you are required to have a business license if you are operating the Etsy store out of your home.  If you have a separate office location, then you would contact that locality.  Generally, if you do not obtain the business license when you are supposed to, you will be assessed penalties and interest when the locality gets information from your state tax return and knows you are running a business.

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
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