What types of licenses do I need to temporarily sell goods in a new place?
ComplianceOctober 12, 2022

What types of licenses do I need to temporarily sell goods in a new place?

Are you interested in temporarily selling goods in a new place? Whether you operate a pop-up store or restaurant or conduct temporary sales, if you operate a business in a new place — even for one day — you may require a business license.

Common types of licenses required include a temporary sales tax permit, transient vendor license, itinerant merchant license, and a basic business license. Generally, you must obtain the appropriate license before you begin operations in a new jurisdiction.

In this article, we discuss the types of licenses you may need to temporarily sell goods in a new place.

Defining a transient vendor

Each state defines a transient vendor differently.

In West Virginia, a transient vendor is a person from outside the state (who doesn’t maintain an established place of business in the state) who transports and makes taxable sales of tangible personal property to consumers in the state. Meanwhile, in Illinois, a transient merchant is defined as any person who is engaged temporarily in the retail sale of goods, wares, or merchandise in the state. That person may occupy a room, building, vehicle, structure, or vacant lot.

Some states limit the applicability to the types of goods sold or expand the license requirements to all businesses that make any income in the state, however temporarily. Consider the following:

  • In Minnesota, the term “transient merchant” doesn’t include a seller or exhibitor in a firearms collector show which involves two or more exhibitors.
  • California considers a temporary seller any person who will be selling items at a location for less than 90 days. Sellers with infrequent taxable sales (such as a person who holds a garage sale more than twice a year) are considered “occasional sellers” and may not need a seller’s permit.
  • Maryland requires any individual who sells items other than produce or seafood at a roadway or temporary location — and the items are subject to Maryland sales and use tax — to display a transient vendor license.

Licensing requirements for transient merchants vary

Licensing requirements can vary depending on the state, the municipality, and the business activity. Below are the most common licensing requirements.

  • Temporary sales tax permit: Some states require a merchant to obtain a temporary or transient sales tax permit that is limited to an event and/or location. In Utah, temporary sales activities often fall under the “special event” category, meaning a one-time event or an event that runs for more than six months or less where taxable sales occur (fairs, festivals, conventions, and hobby shows, etc.). Vendors who participate in special events must obtain a Temporary Sales Tax License and Special Return from the Utah State Tax Commission. The license is only valid for the event listed.

  • Transient vendor/merchant license (local): Local transient vendor licenses or permits are often issued at the city or county level. In some municipalities, temporary vendors may need to obtain a peddler’s permit or solicitor’s permit. (Note: As with transient vendor activity, the definitions of peddler and solicitation business activities vary by state and municipality.)

  • Transient vendor/merchant license (state): Certain states issue a transient vendor/merchant license at the state level. In Massachusetts, those conducting temporary or seasonal indoor sales must obtain a transient vendor license by registering with the Division of Standards (part of the Office of Consumer Affairs & Business Regulation) and obtain a transient vendor bond. A local transient vendor license may also be required in each Massachusetts municipality where business is conducted.

  • State tax authority registration: Transient vendors may also need to register with the state tax authority and obtain a sales tax permit or certificate of sales of taxable items and services. For example, in New York, any person who sells taxable tangible personal property or taxable services (even if sold from home, once a year, or on a temporary basis) must register with the Tax Department before beginning business.

There are also additional license and permit obligations that transient merchants must be aware of, including:

  • Basic business or privilege tax licenses*
  • Registration with local fire, police, or health departments
  • Applicable zoning and special event permits

* These licenses are usually handled at the city or county level, but there are some instances where you may need to obtain a state general business license. For example, Washington State requires a business license for those who meet any of their conditions (such as meeting the physical presence nexus by planning to hire employees). In addition, the business may also need to register with the Secretary of State.

Penalties for operating without a temporary seller license or permit

Failure to obtain the proper licenses and permits can result in seizure of goods, fines, and other penalties.

These penalties can be substantial. In West Virginia, a transient vendor who conducts business without a valid business registration certificate can have their tangible personal property and vehicle(s) seized by an authorized state official without warrant.

Licenses must also be displayed or risk penalty. For example. Maryland law requires that transient vendors display their licenses at all times. In addition, they must state and charge sales and use tax on each taxable sale made. Failure to do either can result in an immediate stop sale order and/or misdemeanor charges. A fine of up to $2,500 may also be imposed.

CT Corporation can help

Business license management is challenging — especially if you temporarily sell goods in a new place. It can be confusing to understand exactly what type of license you need, how to register your business, and when and how to renew a license. CT Corporation is here to help you with your business license needs with a highly reliable process.

Learn more about how CT Corporation can help with your business license needs. Call us at (855) 316-8948 (toll-free U.S.) or visit our Business License Solutions.

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