Do I Need a Business License to Sell Online in Virginia?

If you’re selling online in Virginia, you might be wondering: Do I need a business license? The short answer? It depends. Not every online seller needs one-but many do. And skipping it could cost you more than you think.

Who Needs a Business License in Virginia?

Virginia doesn’t have a single statewide business license. Instead, each city and county sets its own rules. That means if you’re selling from Richmond, you follow Richmond’s rules. If you’re in Fairfax County, you follow theirs. There’s no one-size-fits-all answer.

You’ll likely need a local business license if you’re operating as a business-not just a one-time seller. That includes:

• Selling regularly on Etsy, Amazon, eBay, or your own website
• Using a business name (even if it’s just your first name + "Handmade" or "Shop")
• Making more than $2,000 in gross sales per year
• Hiring employees or contractors
• Buying inventory in bulk to resell

If you’re just selling a few handmade items or used stuff from your closet once in a while? You probably don’t need one. But if this is your main income source? You’re running a business-and Virginia treats it like one.

What About Sales Tax?

Even if you don’t need a business license, you almost certainly need a sales tax permit. Virginia requires anyone who sells taxable goods online to collect and remit sales tax. That includes clothing, electronics, cosmetics, furniture-you name it. Digital products like e-books or online courses? Also taxable.

The state doesn’t care if you’re selling from your basement or a warehouse. If you’re making sales to Virginia customers, you need to register with the Virginia Department of Taxation. You can do this online in under 15 minutes. Once registered, you’ll get a sales tax account number. You’ll need to file returns monthly, quarterly, or annually, depending on how much you sell.

Here’s the catch: if you don’t collect sales tax and get audited, you’ll owe back taxes plus penalties. Some sellers think, "I’m just a small shop," but Virginia doesn’t care about your size. They care about your sales volume. If you hit $100,000 in sales or 200 transactions in a year (even if you’re out-of-state), you’re required to register under the economic nexus rule.

Business Name and DBA Rules

If you’re using a business name like "Tara’s Treasures" or "Virginia Craft Co.", you must register it as a Doing Business As (DBA) with your local clerk’s office. This isn’t a license-but it’s legally required. Without it, you can’t open a business bank account, accept payments under that name, or enforce contracts.

You can search your county’s business name database online. Most counties in Virginia (like Loudoun, Henrico, or Arlington) have free lookup tools. If the name is taken, you’ll need to pick another. Once approved, you’ll get a certificate. Keep it with your records.

Where to Apply for a Business License

You apply at the local level. Here’s how:

1. Find your city or county government website.
2. Look for "Business License," "Business Registration," or "Office of the Commissioner of Revenue."
3. Download or fill out the application. Most offer online forms.
4. Pay the fee. Fees range from $25 to $200 depending on location and type of business.
5. Wait 5-10 business days. Some places issue licenses instantly online.

Some counties have special rules. For example:

• Virginia Beach: Requires a business license for any home-based business with customers visiting the home.
• Arlington County: Requires a separate license for each type of product you sell (e.g., food vs. clothing).
• Richmond: Mandates a business license if you’re using a vehicle for deliveries.

Don’t assume your neighbor’s rules apply to you. Always check your local government site. The Virginia Department of Commerce has a directory of local offices to help you find yours.

What Happens If You Don’t Get One?

Ignoring the rules sounds tempting-but it’s risky. Here’s what you could face:

• Fines up to $2,500 per violation
• Shut-down orders from local authorities
• Loss of your online store account (Amazon and Etsy can suspend sellers for unlicensed operation)
• Being barred from future business permits
• Personal liability if someone gets hurt by your product

One seller in Roanoke got hit with a $1,800 fine after a customer filed a complaint. She thought she was fine because she only sold on Etsy. The city didn’t care. She hadn’t registered her business name or paid taxes. She lost three months of income while fighting it.

What About Federal Requirements?

You don’t need a federal business license just to sell online in Virginia. But if you’re selling alcohol, tobacco, firearms, or certain regulated goods (like medical devices or pesticides), you’ll need federal permits from the ATF, FDA, or FTC. Most online sellers don’t touch these-but if you do, don’t skip this step.

Also, if you have employees, you need an EIN (Employer Identification Number) from the IRS. It’s free and takes 5 minutes to get online. You’ll need it to pay payroll taxes and open a business bank account.

What If You’re Out-of-State Selling to Virginia?

If you live in another state but sell to Virginia customers, you still need to register for sales tax if you hit the economic nexus threshold ($100,000 in sales or 200 transactions). You don’t need a Virginia business license unless you have a physical presence-like a warehouse, employee, or office in the state.

But here’s the twist: if you use a fulfillment center in Virginia (like Amazon FBA), you’ve created a physical presence. That means you need a local business license-even if you live in California.

Quick Checklist: Do You Need a License?

Answer yes to any of these? You likely need a license:

• Do you sell regularly (more than 10 times a month)?
• Do you use a business name (not just your personal name)?
• Do you buy inventory to resell?
• Do you make over $2,000/year from online sales?
• Do you have employees or contractors?
• Do you ship from or store inventory in Virginia?

If you answered yes to two or more, start the registration process now. It’s not hard. Most local governments offer step-by-step guides. Some even have free workshops.

Next Steps: How to Get Started

1. Register for sales tax at tax.virginia.gov (takes 15 minutes).
2. Check your city/county for business license requirements. Search “[Your City] business license online.”
3. File a DBA if you’re using a business name.
4. Get an EIN from the IRS if you plan to hire anyone.
5. Keep records of all permits, receipts, and tax filings. You’ll need them if you’re ever audited.

Setting this up early saves headaches later. The longer you wait, the more likely you are to miss a deadline, get fined, or lose access to your store.