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Do You Need a Business License to Sell Gift Baskets?

The answer is Yes, you need business license to start and sell gift baskets in the United States. Business licenses are permits issued by federal, state, and local government agencies that allow individuals or companies to conduct business within the government’s geographical jurisdiction.

To start a gift basket business in the United States, you need to get multiple licenses to be in compliance. The term “business license” can be a bit misleading as it sounds as though there is one license you apply for.

That is not the case. Business licenses can vary greatly according to location and the makeup of your gift baskets, but it is not just one license, but many that come together to make your business legal. Gift basket services make purchasing and giving gifts easy.

They provide both standard and customizable baskets that are appropriate for different occasions. Many also make the actual giving of the gift simple by providing shipping or delivery options.

According to research, a gift basket service can be started with very little capital. If necessary, all startup costs can be kept to $1,000 or less. However, acquiring the required business licenses and purchasing initial supplies to make baskets are the two primary costs.

Note that some of the necessary supplies include baskets (in various sizes), crinkle paper, cellophane, ribbon, tags and products to put in the baskets.

Many different products can be put in gift baskets. Local products, gourmet foods and candies are some popular items to include. Getting business licenses or permits goes beyond simply registering or declaring your gift basket’s business entity—like an LLC or corporation.

As unpleasant a task as it may be, don’t risk your gift basket business shutting down before it fully begins. Conducting business without the proper licensing is a criminal offense in the United States, while some states tend to hand out hefty fines. Here are some of the more common business licenses and permits to keep your gift basket business operating legally.

6 Important Business Licenses and Permits You Need to Sell Gift Baskets

1. Federal Tax ID

An Employer Identification Number (EIN) is also referred to as a Federal Tax Identification Number and is used to identify a business entity. It costs nothing to apply for an EIN, it can be registered online, and most vendors will require a tax ID before conducting business with a retailer.

2. Alcohol Licenses and Permits

A necessary qualification for alcoholic gift baskets is one that is required in order to sell them. In addition to obtaining a license to operate your business, you will be required to obtain a license that allows you sell and distribute alcoholic beverages and products.

If you are planning to sell alcoholic gift baskets or add wines to any of your baskets, your business and in some states your employees will need a liquor license, which you can obtain at the state level.

3. General Business Permit

Note that how and where you register your gift basket business with the state will depend on your state’s laws. Howbeit, to find out what is needed to obtain a business license in your state, it’s advisable you start by visiting your state’s official website.

If your gift basket business will be located within the city limits, you may also be required to purchase a local business license. Some counties and other municipalities also require a license. Call your county or city clerk’s office for more information. The fee varies depending on the type of business and where it is located.

4. Resale Certificate

Since gift basket services involve purchasing and giving gifts easy and also providing both standard and customizable baskets that are appropriate for many different occasions, your business will need a resale license or certificate. Not all states require a sales license and each state has its own name for this type of license.

Note that this type of business license will allow your business to buy goods tax exempt from a manufacturer or distributor. Then you collect the sales tax from the customer and pay it back to the state.

5. Business Name Registration or DBA Certificate

If you do business as a name other than your full legal name, for example, you do business as “Gift Baskets by Tony Frame,” you will need to file a doing business as (DBA) filing.

Some business licenses include a business name registration; others require a separate registration or a DBA (doing business as) certificate. When you file for ​​corporate business structure, a foreign or fictitious name application is generally included. Again, check your state’s laws for more details.

6. Signage and building exterior

Note that many cities or county level governments have rules related to the size and placement of signage and the look of building exteriors (such as painting murals or bright colours) that are worth bearing in mind as you decide upon branding for your business location.

One of the requirements of being a business owner is getting all your licenses and permits out of the way and keeping them up to date. Even though it can be complicated and time-consuming, but it more or less comes with the territory of entrepreneurship.