Tustin, CA asked in Tax Law and Business Law for California

Q: What business license(s) or DBAs would I need if I were to sell digital products on a third party platform?

I am thinking of selling digital products (i.e PDFs, templates, drawings, printable stickers) on a platform called Etsy. I'm wondering what I'll need since I do not intend to sell physical products, just strictly digital.

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James L. Arrasmith
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A: If you are selling digital products on a third-party platform like Etsy, you may need a business license and/or a DBA (Doing Business As) registration, depending on your specific circumstances and the requirements of your state and local government.

Here are some general guidelines:

Business License: In some states, you may need a general business license to operate any kind of business, including a digital products business. You should check with your state and local government to determine if a business license is required.

Sales Tax Permit: If you are selling digital products on a platform like Etsy, you may also need a sales tax permit. This will allow you to collect and remit sales tax on your sales, as required by your state and local government. Some states do not require sales tax on digital products, but others do, so you should check with your state's tax agency to determine your specific requirements.

DBA Registration: If you are operating under a name that is different from your own name, you may need to register a DBA with your state or local government. This will allow you to legally use a business name other than your own name.

Other Permits and Licenses: Depending on the nature of your digital products business, you may also need other permits and licenses. For example, if you are creating and selling copyrighted materials, you may need a copyright license or permission from the copyright owner.

It's important to note that the requirements for operating a digital products business can vary widely depending on your location and the nature of your business. Therefore, it's a good idea to consult with a local attorney or accountant who can advise you on your specific situation and help ensure that you are in compliance with all applicable laws and regulations.

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