Starting a Business

Do I need a business license to operate a garage sale if it is profitable and a significant source of income?

I'm a coupon shopper. I'm able to purchase merchandise at local stores for 90 percent off retail utilizing coupons. In my city I'm allowed four garage sales a year. I'm planning to have one per quarter to sell the stockpile I accumulate every three months. Usually, my stockpile's worth ranges from $3,000 to $5,000. Because this is a significant source of income, do I need a business license for tax purposes or for any other reason? I want to keep the spirit of the garage sale (cash only, no receipts, no tax).
Opinions expressed by Entrepreneur contributors are their own.
Each locality differs in its approach to garage sales. Some require a permit or license; others do not, as long as you stay within the maximum number permitted each year.

It would be worth speaking to the local town clerk or a business attorney to see if there are any issues concerning the amount of money earned and if there's a tipping point that requires more substantial registration.

Your reselling of merchandise also raises some concerns--it's unlikely that the merchants would want to give resellers 90 percent discounts on their merchandise; they'd rather give that to the end-user customers as a means to build a loyal customer base.

Your all-cash/no receipt/no sales tax policy could also run you afoul of the taxing authorities, as you really are treating this like a business. Speak to an accountant to make sure your bases are covered.
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