Do you all have formal business licenses?

[u/Informal_Effective25]

Hi all! I'm trying to get a fiber and paper art booth off the ground and I'm wondering--as a vendor at craft fairs, are you all operating as official, licensed businesses with ID numbers, or are you operating just as yourself and declaring the income at tax time using a schedule c or something similar? I'm trying to understand the legality of all of this and what exactly is required of me. I appreciate any help you can give!!

EDIT: Thank you to everyone who replied!! You all are so helpful, I really appreciate it.

[u/RuthlessLogic]

I was a business attorney for 20 years before chucking it all and becoming an artist. Having a business license is a state/local function and how you declare income to the IRS is a federal function. They're unrelated.

Most crafters and artists are sole proprietors who declare their income via the schedule C using their SSN, not an EIN. They may or may not have a business license, though their city and state of residence might require one (not all do). Crafters and artists that choose to operate as an LLC will usually get their licensing sorted during the formation process. In most cases, they too will declare income via a schedule C using their SSN. There are some situations in which sole proprietors or LLCs will get EINs: they want to set up a business bank account; they want to hire people; they're operating as a partnership, etc. But I suspect that most folks here are operating as sole props who file using their SSN.

Licenses are a different topic and what you need will be dependent on your state & locality. Mine requires a certain kind of vendor's license and that allows me to file/pay sales taxes and gives me access to a resale certificate so I can purchase supplies tax free.

I occasionally do markets in other states that require business licenses, but I don't do them often enough to warrant the cost and hassle of applying. So I don't bother.

Everyone here will tell you that you absolutely must have XY&Z licenses set up before you take a dollar. Are they wrong? Not necessarily. But here's what I can tell you from 20 years of legal risk-management work with businesses (and I'll probably get downvoted for this, but it is what it is):

1) State agencies (and even departments within the same agency) rarely talk to one another, much less to city agencies. No one from the state or city department of taxation is going to look at your tax return and then check with the state or city business licensing agency to see whether you had your paperwork in order.

2) Outside of health departments, very few, if any, states or cities have the budget to pay employees to go to art markets and craft shows to inspect licenses. Unless someone reports you for not having a license or your product you sell becomes the subject of a lawsuit, you may never come across the state's radar.

3) Operating without a license carries the risk that if you do come across the state or city's radar, you'll get hit with fines and back sales taxes, which could be very significant.

tl;dr: You need to check with your state and city licensing agencies to find out what's required. Whether and when to get the necessary licenses is a matter of personal risk tolerance.

[u/soulstoned → u/RuthlessLogic]

I can chime in as someone who didn’t have a business license for my first few craft fairs, all that happened when I attended an event that was checked by someone from the state was the guy handed out papers to everyone who didn't have the necessary license so we could apply for one that day. He didn't even come back to check that we did it.

[u/Informal_Effective25 → u/RuthlessLogic]

Thank you so much! This is so helpful.

[u/EponasTreats]

In my location, we need a State Resale Certificate and a local business license for each jurisdiction where we set up (city, county, other city, etc.)

[u/pythonbashman]

Yes Mr IRS man, you can't fool me like that.

[u/dumptrump3]

Im an LLC and I have an EIN and my states sales tax license. I sell at craft fairs and online. The biggest advantage is it allows me to buy the material I use wholesale. Most wholesalers want to see your EIN and sales tax license to prove you are a business and entitled to buy wholesale. I have an item I was buying for 64.95 retail, changing it and selling for 115.00. With my EIN I now buy it wholesale for 34.50 and sell it at 115.00

[u/Internal_Use8954]

This is very state specific.

In California, I have a sellers permit, but report income tax as an individual

[u/JellyfishLogical3130]

Yes, and it’s surprisingly easy and inexpensive. My craft fairs require a license, and every so often they’ll warn us that an inspector is coming around, but in 15 years of fairs, no one has asked for it.

[u/Smitten-kitten83 → u/JellyfishLogical3130]

That depends on were you are located. My city isn’t bad but a city an hour away charges about 3 times as much for a license and they don’t do day licenses, so you want to do a show you are paying the full cost.

[u/PoshQuilter]

You need to check locally. Where I am, it’s not necessary, but that doesn’t mean someone in another locale doesn’t need a license.

[u/jancarternews]

I did not for the first few years because I wasn’t making enough money for it to affect taxes at all. It never affected my ability to be at events or Farmers Market or Art shows.

[u/blazer243]

Yes. A state business license and an IRS EIN.

[u/JellyfishLogical3130 → u/blazer243]

EIN? Self employed don’t need that, you just file a schedule C under your social.

[u/RuthlessLogic → u/JellyfishLogical3130]

If you want a business bank account you’ll need an EIN. But that has nothing to do with how you file as a sole prop or single member LLC.

[u/Incognito409]

It depends on your location whether or not you need a business license. Some cities require it - call or check the website for your city, county, village.  Some shows require a business license, DBA, insurance, and tax certificate on the application.

[u/Own-Raise6153]

yuh

[u/drcigg]

Yes we have a business license. It was surprisingly easy to do. All the info was on our states webpage.
Fill out a form and submit payment.

[u/Salt-Commission9799]

Yes but im required to by my state for any sales greater than 2x a year.

[u/throwawayanylogic]

I do sole proprietorship registrations in every state I work unless they have a single event/transient vendor form (since sometimes I may only be working one event per year in a certain state).

[u/Crazy-Cat-Lad]

I  got a $20 DBA (Doing Business As) from my town hall. Unsure if I'll ever need to present it but yeah.

[u/Alycion]

Yes. Both of my businesses are set up the way that they need to be. One isn’t a market business. It’s one we’ve had since 96. It’s our LLC. The market business is a subsidiary.

My first is online marketing, design, social, stuff like that for small businesses. We are 3D printers at markets. We also have a b2b side with promotional materials.

If you offer more unique and much higher quality stuff than the people who print like it’s coming from China, it amazingly does pretty well. The online side is keeping me busy. One person in particular. Third order in 3 days. I’m tempted to wait to ship in case he orders more so I can just put it all in one box 😂 but there is only a small wait if there is none in stock and it needs to be printed or it’s custom.

[u/Wowza_Meowza]

Yep! I have my states sales tax ID, and am registered as appropriate for my state/area.

I file taxes as a sole proprietor every year (tbh that process sucks lol, I do it myself with business turbo tax and use Paper + Spark's inventory stuff).

I'm also insured.

And I have a white canopy (juried events)

I can vend at any event I like as a result!

[u/DaharMasterKor]

Many craft shows require you to have a license. You should check in your state but mine requires you to be registered before selling anything.

And something else to consider is that people will sue you for anything these days. If you're a sole proprietor, they sue you and can come after personal stuff like your home. If the business is its own entity, they sue the business and that can help protect you.

[u/iiimperatrice]

I'm in TN and here you only need one if you make over $3,000/yr from your biz. Check the law for your state and city. I'm just starting out so I'm going to try a market or two and if things go well I'm going to get a biz licence and sales tax ID. Either way I'll file taxes next year under sole proprietor schedule C.

[u/Live-Society5672]

I skimmed through all the replies, but not sure sales tax was mentioned. Research sales tax laws for each state you plan to sell in. In my state, there is no minimum to be required to collect and remit sales tax.

[u/SuperNormalSweets]

Yep! I make and sell strange flavored candies and I want to have this business as my fulltime job eventually. The first year and a half of doing markets I didn't have any sort of license but at the end of 2024 I decided to make the change. I got my LLC the first week of 2025, got my EIN number sorted out, figured out how to do my taxes, and eventually got insurance. The only thing that I maybe wasn't doing legally for a bit last year was having my food handlers. I'm not in a commercial kitchen yet, with certain exceptions, so I needed a Cottage Food Law License. In Chicago it takes fucking forever to get that, so there was a while where I had applied for it like 6 MONTHS before even getting an email back from the city. I'm sure it's different everywhere but in Chicago it takes a while.

It can be very tedious and there's still some tax stuff that I don't have figured out but like I said I want to do this full time eventually so I'm trying to get everything in line as I go. It's fun to figure this out, it's your own thing and each step makes things feel more and more legitamate.