Permits and Licences for Dropshipping

[Anonymous]

I'm new to this and I'm just getting started. How do I legally start an online dropshipping business on Shopify using Printful while living in Alabama and what do I need to know about taxes, permits, zoning (does zoning even apply?), licenses, sole proprietorship, Nexus laws, and how many permits and licenses do I need to keep it legal?

[Aria]

Hey!

Aria here, one of the Social Care gurus at Shopify.

If you're based in Alabama, that will be your business address for tax purposes. It doesn't matter that Printful is located in a different state because they are not officially part of your business. You are simply paying them for a service.

You can find out more about how sales tax works in this guide.

When it comes to the legal implications of starting a business, I would always recommend you take advice locally from a professional. Check out the guide to Business Licensing in Alabama as a place to start. You can get some general information in this Shopify guide but it does not replace professional legal advice.

If you need help in setting up your dropshipping business, make sure you sign up for the free courses on Shopify Academy. We have courses on Dropshipping, Print on Demand, Instagram Marketing, Email Marketing and more. We are introducing new courses and webinars on a regular basis.

Are you creating your own designs or did you plan on hiring someone for that? Other merchants have had success hiring someone from fiverr or 99designs.

Aria
Social Care Guru
Shopify

[Anonymous]

I'm planning on doing my own designs. I'm doing this from my home, which my parent said wasn't zoned for business so I was wondering if I need a zoning license or if it's even required. I won't be holding any inventory or have anything returned to my home either. All I will be doing is sending my designs to Printful for them to print and ship to customers and I will pay the nesscary taxes to the states where I have Nexus. I'm just not sure how many licenses/permits are required or if it's legal since my home address isn't zoned for business. My home is basically the office where I do the designs on the computer and send them to Printful. Do you think I should even be concerned about zoning since no one will be coming to my home and I won't be holding inventory so I can just be a sole proprietor, conduct business, and pay the nesscary taxes? Also on the Alabama Department of Revenue MAT Application, since I'll be a sole proprietor signing up for a sales tax license, do I select the Individual Income Tax account type since my income is reported on my individual income taxes on a sole proprietorship? Thanks for your previous post, it is a big help.

Todd
Starting Retail Dropshipping

[Aria]

Hey, Todd!

Aria again.

I think it's unlikely you will need zoning for business when it's just you working by yourself from your laptop. I do however need to stress the importance of asking a professional local to you in order to make sure you're within the law. As Shopify gurus, we are not legal experts. We are a global company and the rules are different in different cities, never mind different countries. I don't want to risk giving you the wrong advice. You may have a small business bureau in your city or a business registration office where you can ask.

I hope you get the answers you are looking for.

Aria
Social Care Guru
Shopify