Generally speaking, a business is a business, whether that business is a traditional brick and mortar or an Internet business. If you are selling products or services, generating revenue (or loss), or conducting business in any way, you need to abide by the same laws as any other type of business. Depending upon the type of business you might need to register with the state to charge and pay sales tax. You may or may not need a license or permit. The determining factor is what type of business it is, not whether or not it is an Internet business. You will need to register the business (example as a DBA) and choose a business structure (sole proprietory, partnership, corporation, etc). Hope this helps.

Hi adrianw, Check out California's Business Permit site. It should give information about licenses and permits particular to your state. Have you checked out our Online Business Guide? It also has a wealth of information about registering your domain and other rules and regulations.