Turning your Hobby into a Seasonal Business
This time of year, many crafters think about turning their hobby into extra cash. Before you sell at the Farmer’s Market or online, here’s what you need to do in North Carolina to properly start a business.
1. Check out whether there are any zoning restrictions to operate a business from your home. If you are in the city limits, the city planning and zoning department will be your resource; if you live in a county jurisdiction only, then check with the county planning and zoning department.
2. Pick a business name and register it appropriately. If you are a Sole Proprietor (no entity), a general partnership or limited partnership, you should file a Certificate of Assumed Name in the county where you live. If you are forming a Corporation or LLC, the name will be filed with the Secretary of State when you form your company.
3. Obtain a federal tax ID number (EIN or TIN). You technically don’t need one if you don’t have employees, but I recommend obtaining one anyway so you don’t have to give out your social security number to vendors. You can do this online.
4. Obtain a North Carolina sales and use tax number. You will need NC Sales Tax (Free) whenever you are selling tangible goods, or installing, repairing or enhancing houses, cars (property of another owner) etc. For repair/install work, one needs to charge sales tax on the labor hours and on the materials.
5. Determine if a license or permit is necessary. There is no single NC business license, and different jurisdictions have different rules.