Would I need a business lisence to sell my crafts to a consignment shop?

Question

I want to make craft items in my home and sell them through an online business that sells consignment goods that artists make. I live in Ohio.

Answer 1

I would double check with your local Chamber of Commerce on this issue, but you shouldn't need one since the consignment business should already have one and you would be paid out similar to contracted labor.

Answer 2

Unfortunately, to find the true answer involves rather complicated legal issues since it may include contract/employment law, internet business law, and Ohio licensing regulations. Generally, the consignment shop appears to be merely a distributor of your goods through a sales agreement, not an employer via work for hire, and Ohio's commercial activity tax would likely apply but these contract and licensing issues for online consignment sales require specific legal treatment.

Therefore, I would contact an attorney through your local bar association as well as examine Ohio's business registration process. It would be worth paying for the research to prevent backtaxes owed from not filing as a business. Alternatively, it might be cheaper simply to presume in good faith that you must register as a business and then deal with the costs of operating a small business rather than pay legal fees to know the true answer. Then, if your business grows substantially, invest in acquiring a legal opinion on the issue.