Ebay is one of the most widely-used auction websites available to the public as of 2011. You may sell an unlimited number of items on eBay, provided you pay certain fees. It is not always clear when you must have a business license to sell on eBay, however, which has landed some people in "hot water" with their local Chamber of Commerce offices.
Basic, Occasional Sales
Basic, occasional sales on eBay typically do not require you to have a business license. An example of this kind of sale would be the coin collection you found in your granny's attic or the box of toys your kids no longer use. For these sales, you likely aren't going to repeat a similar listing, and you're usually working on your own behalf.
Ebay listings become more complicated when you become an auctioneer -- when you start listing items on a regular basis or are charging fees to list items for someone else. As pointed out by Cliff Ennicio of the Entrepreneur website, most states have laws that require auctioneers to have business licenses. When you list items under consignment, these laws operate under the idea that your clients are trusting you with the sale. Although every state has auctioneer laws, sometimes the laws apply only to these kinds of consignment sales, meaning you don't need a license if you're selling items you've purchased from a wholesaler.
How to Check Local Law
If you are not sure whether auctioneer license regulations apply to all eBay sellers or just those operating on consignment, your state auction board may be able to tell you. It is best to contact the board through your attorney. This preserves your anonymity and lets someone with more authority get the information you need, as pointed out by Ennicio. Sometimes the laws on Internet sales are not very clear, however, so you still may not have a definite answer even if you contact your board -- the best they can do is tell you what's on the books.
The Bottom Line
Because laws on auctions can be ambiguous, it's always better to play it safe and get your business license if you plan to sell on eBay routinely. The easiest way to do this is to register with your state registration authority -- usually the Secretary of State or county clerk -- which involves paying a small fee and publishing notice of your registration in a newspaper. This establishes you as a sole proprietorship. You may use your regular name as your business name for this purpose if you wish. If you are just going to sell occasionally, all you need to do is provide eBay with a credit/debit card or bank account information, and tell eBay how you'll handle seller fees, select payment methods you'll accept and set your public feedback profile to public.