Hi   I would go legit from the start, I had started a business on there importing and it will just put you back when you have to restart everything, it's good that your brain hurts now, it's better than it hurting later, good luck

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I just found out about this tool called 'Permit Me'. It is right here on this website and I think it might be of great interest to you. I believe it might give you some insights as to what you need. Hope this helps and Good luck: http://www.business.gov/register/licenses-and-permits/

I sold on ebay for many years.  It is not so easy to make a profit these days so I have moved my business elsewhere.  If anyone is interested I can recommend a good ebook on how to move your business from ebay to amazon.  I wont post it here now as I am new and dont want to be accused of spamming or something like that.  but if anyone would like to know just message me.   I wouldnt start to worry about tax etc until you are making enough money to worry!   Just have a go first.  If you cant make any money then you would have wasted alot of time thinking about tax issues etc.   Good luck! 

You don't need to claim the first $1500 that you make on ebay if you're just selling different things you have around the house as this is considered a hobby.  However, once you get to that point you'll want to speak to an accountant.  If you're selling home-made items, you'll at least need to keep all you're records including sales and expense related info(shipping, supplies, etc.)and at the end of the year provide your accountant with this. This is the bare minimum you'll need to do.  If you end up moving some serious volume, then it may benefit you to create a business entity for tax purposes and your accountant will be able to help you with that as well.

If you want to sell on Ebay, you need register a ebay account and paypal account. then Certify your account.

CaraVSANgel, IRS has clear definitions for hobbies and for-profit businesses. If it is a hobby, then you may be able to claim tax deductions. If it is for-profit, then you need to form and register a business in Washington, which includes permits, licenses, taxes, etc. Here are the questions from the IRS to determine whether or not you have a business: Is the purpose of your activity to make a profit? Generally, your activity is considered a business if it is carried on with the reasonable expectation of earning a profit. Do you participate in your activity just for fun? Hobbies - also called not-for-profit activities - are those activities that are not pursued for profit. Do you depend on income from the activity? If so, your activity is likely considered a business. Have you changed methods of operation to improve profitability? If so, your hobby may actually be a business. Do you have the knowledge needed to carry on the activity as a successful business? People who carry out hobbies just for fun, often don't have the business acumen to turn their not-for-profit activity into a profitable business venture. Have you made a profit in similar activities in the past? This may indicate your activity is a business rather than a not-for-profit hobby. An activity is presumed carried on for profit if it makes a profit in at least three of the last five tax years, including the current year - or at least two of the last seven years for activities that consist primarily of breeding, showing, training or racing horses. Does the activity make a profit in some years? Even if your activity does not make a profit every year, it still may be considered a business. Do you expect to make a profit in the future from the appreciation of assets used in the activity? This indicates your activity may be a business rather than a hobby. Learn more about about Online Auction Seller Hobby versus a Business at IRS.gov.

Some people sell a few stuff on ebay or etsy. For example, when they clear out their basement or got a gift they do not want. For this scenario, you don't have to worry about licenses. You do have to pay income taxes on your online income. Also make sure you don't sell to people in your state of WA so you don't have to worry about sales taxes. If you are trying ebay and etsy out with a few handmade items, then I suggest you go this route. If you decide this is something worth pursuing, open a company (sole proprietor, LLC, etc) and get your sales tax permit. If you keep your company structure simple, you only have to file Schedule C with your normal income tax return. The sales tax permit will be useful since you will most likely have WA customers as you go along. Of course, consult your tax professional before you open your first business. Start selling your first ebay item now. I know it's a lot of things to keep in your head, but dont let that stop you. You just have to take it a day at a time.