LaunchPath

Flagship channel-state reference guide

Start Etsy in California: full reference guide

Use this page when you want the complete dense version: all sections, all appendices, and the full official source directory in one scrollable reference surface.

Last verified: April 26, 2026 Reference mode Dense appendix

Built from reviewed public pages for California, IRS, FinCEN, Los Angeles, Etsy. Use it as a first-pass guide, then verify the official links that match your setup.

How to use this page

Dense appendix modeFull source directory attachedLast verified April 26, 2026

This version favors completeness over pacing. Use it when you need the appendix, the dense source trail, or the full long-form reference in one place.

Best reading order

  1. Use the fast-answer and official-links sections first if you only need the main route and source trail.
  2. Open the entity, setup, tax, and local sections only where your exact launch path actually branches.
  3. Use the full source directory last as the appendix, not the starting point, unless you already know the exact agency task.
Fast answer appendix Official links first Full source directory
Back to the guided journey

Reference mode

Everything in one dense page

The guided journey is the easier starting point. This page keeps the full accordion guide and source appendix when you want the complete research-backed reference view.

Best when you need

  • The full section map in one scroll without the lighter journey framing.
  • The appendix and official-source directory preserved next to the answer sections.
  • A clearer audit trail before you print, compare, or cross-check another route.

Still better handled in the journey

  • First-pass reading when you want the shortest, safest beginner route.
  • Deciding what to do first before you need the full appendix.
  • Switching states or platforms quickly without reading the full dense version.
Reference map
Start here Fast answer If you want to open Etsy in California, you usually need to do five things in order: Everyone 5 steps

If you want to open Etsy in California, you usually need to do five things in order:

  1. Pick an Etsy-eligible product lane (handmade, vintage, or craft/party supplies) and avoid prohibited items.
  2. Choose your setup: sole proprietorship vs single-member LLC, and decide whether you need a county fictitious business name (FBN/DBA).
  3. Get your federal and California registrations in place (EIN if needed; CDTFA analysis if you will have non-marketplace sales).
  4. Verify local county and city rules (permits, zoning, and home-occupation constraints).
  5. Open and verify your Etsy shop, set up shipping and listings, then launch small and tighten operations.

Practical first-launch recommendation

If you are testing casually with minimal risk, sole proprietor can work (especially if you will not hold inventory or ship significant volume yet).

If you intend to build a durable Etsy business selling physical products, a single-member LLC is often the better long-term fit in California because the cost of mistakes (claims, chargebacks, local compliance issues, or a platform disruption) is usually higher than founders expect.

Avoid these first-launch mistakes

  • Launching products that do not qualify under Etsy’s creativity standards (or that violate the prohibited items rules).
  • Treating “I’m only selling on Etsy” as a permanent tax answer, then adding craft fairs or a website without re-doing CDTFA analysis.
  • Underpricing by ignoring Etsy fee stacking and ad attribution fees.

California-specific friction

County FBN/DBA filing plus publication requirements can delay launch if you pick a trade name late.

  • County FBN/DBA filing plus publication requirements can delay launch if you pick a trade name late.
  • California LLCs have ongoing SOS (Statement of Information) and FTB (annual tax and return) maintenance.
  • Local city business-tax registration can apply (example: City of Los Angeles BTRC).
  • Proposition 65 can be a surprise compliance cost if you sell certain materials/products into California.

Etsy-specific friction

Etsy is not “anything goes”: reselling and drop shipping are broadly prohibited except narrow exceptions; production partners are allowed only within Etsy’s rules and disclosure requirements.

  • Etsy is not “anything goes”: reselling and drop shipping are broadly prohibited except narrow exceptions; production partners are allowed only within Etsy’s rules and disclosure requirements.
  • Etsy fees stack (listing + transaction + payment processing + ads if applicable) and pricing errors are a common early killer.
  • Reserves, chargebacks, and case-resolution processes can affect cash flow; build a tracking-first workflow.
  • Etsy policy effective dates matter (for example, policy updates effective May 7, 2026 should be re-checked before you rely on them).

Insurance reality

Etsy’s “Purchase Protection” style program is not insurance. If you sell physical products, you should still evaluate commercial general liability and product liability insurance, and you may want shipping insurance for higher-value shipments.

  • Etsy’s “Purchase Protection” style program is not insurance. If you sell physical products, you should still evaluate commercial general liability and product liability insurance, and you may want shipping insurance for higher-value shipments.
  • Etsy shipping labels may allow optional insurance purchase on some carriers. Source: https://help.etsy.com/hc/en-us/articles/360001988847-Insurance-and-Claims-for-Shipping-Labels
Back to top Next: Quick-start checklist
Checklist Quick-start checklist Use the research-backed checklist groups before you spend, before your first sale, and before launch goes live. Everyone 3 groups

Do these before you spend money

  • Confirm your products fit Etsy’s creativity standards (handmade, vintage, or craft/party supplies) and do not violate Etsy’s Seller Policy or Prohibited Items Policy.
  • Pick your entity.
  • Pick your name.
  • Decide whether you will sell under your legal name, a county FBN/DBA, or a brand.
  • Decide whether you will make items yourself or use a production partner (allowed if the item is your original design and you disclose the partner).
  • Confirm you can keep clean documentation (supplier invoices, component receipts, production records) and can ship reliably with tracking.

Do these before your first sale

  • Form the business (LLC) or file a county FBN/DBA if needed for your trade name.
  • Get an EIN from the IRS if applicable.
  • Open a dedicated business bank account and set up bookkeeping.
  • Do the California CDTFA “marketplace-only vs direct sales” analysis before assuming you do or do not need a seller’s permit.
  • Check local permits and home-based business rules (especially if you will store inventory or have regular carrier pickups).
  • Create your Etsy shop and complete identity verification.

Do these before launch goes live

  • Understand Etsy fees and defaults (listing fees, transaction fees, payment processing fees, Offsite Ads behavior, and any shop set-up fee shown during onboarding).
  • Configure listings, shop policies, processing times, and shipping profiles.
  • Decide your “proof” workflow: tracking, shipping labels, and customer-message response time (these affect disputes and “purchase protection” outcomes).
Back to top Next: Official links you will use first
Choose your setup Entity choice Compare the sole-proprietor and single-member LLC paths before banking, tax setup, and platform onboarding. Everyone 2 options

Sole proprietor

Best for: Best if you want the cheapest and simplest start.

What it means

  • California does not require a California Secretary of State formation filing for a sole proprietorship.
  • If you use a name other than your personal legal name, California’s fictitious business name statement process is handled with the county where your principal place of business is located (and has a publication step under California law).
  • Business income generally runs through your personal return.
  • You do not get a liability shield.

Why someone chooses it

Main downside: Personal liability risk (especially for physical products).

Single-member LLC (default example path)

Best for: Best if you want a more durable setup for a real business.

What it means

  • Formation uses Articles of Organization (Form LLC-1) through the California Secretary of State’s bizfile system.
  • California requires Statement of Information (Form LLC-12) within 90 days after registration and then every 2 years.
  • California has a recurring FTB LLC annual tax ($800) and may impose an additional LLC fee at certain California income thresholds.

Why someone chooses it

Main downside: Use the California State Guide and the Official Source Directory for the exact links and timing rules. Higher cost and more maintenance than a sole proprietorship.

Back to top Next: What to do in order
Main path What to do in order The full end-to-end setup path, kept in the same order as the researched guide. Everyone 14 steps

  1. Step 1: Choose an Etsy-eligible, low-risk launch lane

    Main guide step 1

    Etsy is not a “general marketplace for everything.” Before you do anything else, verify your lane fits Etsy rules:

    Why it matters: Start with low-risk physical goods and avoid regulated categories (food, supplements, cosmetics with claims, medical claims, hazmat-heavy products, alcohol, and children’s products) unless you are doing separate category-specific compliance research. Key Etsy sources:

    • Eligible: handmade items, vintage items (20+ years old), and craft/party supplies (subject to Etsy’s definitions).
    • Not eligible (common beginner mistake): reselling “normal” commercial products (unless it’s in an allowed supply/vintage exception), or drop shipping finished products (limited exception for craft and party supplies).
    • Creativity standards: https://www.etsy.com/legal/handmade
    • Seller Policy: https://www.etsy.com/legal/sellers
    • Prohibited Items Policy: https://www.etsy.com/legal/prohibited
    • Drop shipping / reselling: https://help.etsy.com/hc/en-us/articles/23948763872151-Does-Etsy-Allow-Drop-Shipping-or-Reselling
    • Production partners: https://help.etsy.com/hc/articles/360000336547

  2. Step 2: Choose your name and brand approach

    Main guide step 2

    Decide whether you are:

    Why it matters: Practical rule: Even if Etsy shows a “shop name,” you still need your legal and tax setup to match real documents for banking, taxes, and platform verification.

    • operating under your personal legal name,
    • using a trade name (county FBN/DBA),
    • building a brand name that may differ from the legal entity name,
    • making your own items, or using a production partner for your original designs.

  3. Step 3: Form the business (or do the county FBN/DBA branch)

    Main guide step 3

    If you choose sole proprietor:

    Why it matters: If you choose a single-member LLC:

    • No California SOS formation filing.
    • If you will use a trade name, follow the county FBN/DBA branch (see the California State Guide for the statewide law floor and the “county-based” nature of the filing).
    • Run the SOS business search and naming checks.
    • File LLC-1.
    • File LLC-12 within 90 days.
    • If you will use a different operating name, confirm the county FBN/DBA branch.

  4. Step 4: Get your EIN (if applicable)

    Main guide step 4

    Use the IRS EIN application when needed (most LLCs will get one). IRS start page:

    • https://www.irs.gov/businesses/small-businesses-self-employed/get-an-employer-identification-number

  5. Step 5: Banking and bookkeeping (do this early)

    Main guide step 5

    Open a business checking account.

    • Open a business checking account.
    • Keep a clean separation between personal and business spending.
    • Save Etsy monthly statements, shipping-label charges, refunds, and chargeback records.
    • Keep your production partner and supplier documentation organized (Etsy policy enforcement and customer disputes both punish “no documentation” situations).

  6. Step 6: California tax setup and “marketplace-only” reality

    Main guide step 6

    California uses CDTFA for seller’s permits and related accounts.

    Why it matters: Two common cases: Two key sources to use when deciding: Etsy marketplace tax note: Etsy publicly states it collects and remits California sales tax on Etsy orders as of January 10, 2019. Source:

    • Etsy-only sales: CDTFA’s online seller guidance says sellers who only sell through a marketplace generally are not required to register with CDTFA solely for those marketplace-facilitated sales (but you still have income tax and recordkeeping duties).
    • Etsy plus any direct sales: if you also sell on your own website, at craft fairs, by invoice, or through any non-marketplace channel, you can trigger a seller’s permit requirement and may need to collect and report California sales tax.
    • CDTFA Online Seller Flowchart (Pub 584): https://www.cdtfa.ca.gov/formspubs/pub584on.pdf
    • CDTFA “Doing Business in California” (Pub 51): https://cdtfa.ca.gov/formspubs/pub51/getting-started-and-filing-your-return.htm
    • https://help.etsy.com/hc/articles/360000343968-

  7. Step 7: Local permits, zoning, and home-based business constraints

    Main guide step 7

    California pushes many “business license” and zoning questions down to the local level.

    Why it matters: Before you operate from a home or lease space: Los Angeles home-occupation example floor (official city business portal):

    • check the California SOS “Business Resources” page (it points you to county/city resources): https://www.sos.ca.gov/business-programs/business-entities/resources
    • use CalGOLD to identify permits that may apply: https://www.calgold.ca.gov/FAQ.aspx
    • if you are in the City of Los Angeles, expect a business-tax registration check (BTRC) and review home-occupation constraints.
    • https://business.lacity.gov/plan/home-based-business

  8. Step 8: If you hire employees, do the employer + insurance branch

    Main guide step 8

    Skip this if you have no employees.

    Why it matters: If you hire in California:

    • EDD employer registration rules (includes the 15-day / $100 wages-in-a-quarter trigger): https://edd.ca.gov/en/payroll_taxes/Am_I_Required_to_Register_as_an_Employer/
    • California workers’ compensation requirement: https://www.dir.ca.gov/dwc/employer.htm

  9. Step 9: Create and verify your Etsy shop

    Main guide step 9

    Etsy onboarding is a real compliance gate. Expect:

    Why it matters: Also plan for “seller info” confirmation and disclosures if Etsy asks (example: compliance programs and thresholds can trigger additional required info displays). Start page:

    • identity verification (Etsy states it partners with Persona for identity verification): https://help.etsy.com/hc/en-us/articles/22481159004567-How-to-Verify-Your-Identity-on-Etsy
    • shop onboarding steps (and the possibility of a one-time shop set-up fee shown during onboarding): https://help.etsy.com/hc/en-us/articles/115015672808
    • https://help.etsy.com/hc/en-us/articles/14553858116759-Etsy-Asked-Me-to-Confirm-My-Seller-Info

  10. Step 10: Understand Etsy fees (before you price anything)

    Main guide step 10

    Practical rule:

    Why it matters: Price the first listings only after you account for listing fees, transaction fees, payment-processing fees, shipping, packaging, returns risk, and any advertising charges you choose to use.

    • Etsy does not use a monthly seller-plan choice for a standard U.S. shop.
    • As of April 26, 2026, Etsy's public Fees & Payments Policy says a one-time setup fee may apply when you open the shop, the listing fee is $0.20 per listing, listings renew every 4 months, and the transaction fee is 6.5% of the displayed price plus shipping and gift wrapping.
    • Etsy Help says payment-processing fees apply on orders paid through Etsy Payments, and the exact processing fee schedule depends on the seller's country.
    • Offsite Ads are automatically enabled. Etsy says participation may become mandatory if your shop has made more than USD 10,000 in sales in the previous 12 months, so re-check the live wording before assuming you can opt out later.

  11. Step 11: Set up production partners (only if you truly qualify)

    Main guide step 11

    If you will use a production partner (including print-on-demand):

    Why it matters: Key sources:

    • confirm the item is your original design (or buyer-customized), and
    • disclose the production partner per Etsy policy.
    • Production partners: https://help.etsy.com/hc/articles/360000336547
    • “What can I sell” and reselling notes: https://help.etsy.com/hc/en-us/articles/360024112614

  12. Step 12: Build your “seller-managed shipping” operations

    Main guide step 12

    Minimum operations setup:

    Why it matters: Key Etsy sources:

    • Set up your storefront and shop sections.
    • Set clear processing times and realistic delivery expectations.
    • Use tracked shipping for physical products whenever possible.
    • Decide whether you will buy shipping labels through Etsy.
    • Storefront: https://help.etsy.com/hc/en-us/articles/360000338047-How-to-Set-Up-Your-Storefront
    • Shipping labels: https://help.etsy.com/hc/en-us/articles/360001967188-How-to-Purchase-Shipping-Labels-on-Etsy

  13. Step 13: Understand payout friction (reserves) and disputes

    Main guide step 13

    New shops should plan for “money timing” risk:

    Why it matters: Etsy also has an order-dispute framework and a “purchase protection” style program that can cover eligible orders up to $250 (and it is explicitly not insurance). Policy page (effective date matters):

    • Etsy describes payment account reserves and how tracking can release held funds: https://help.etsy.com/hc/en-us/articles/360058722214-What-is-a-Payment-Account-Reserve-
    • https://www.etsy.com/legal/policy/purchase-protection-program-for-sellers/34509585385

  14. Step 14: Add the “California physical products” compliance lens (when relevant)

    Main guide step 14

    For physical products sold into California, one common extra friction area is Proposition 65 warnings, which can apply depending on the chemicals and exposure levels involved.

    Why it matters: OEHHA’s warning rules are complex and change over time. A safe starting point:

    • https://oehha.ca.gov/proposition-65/crnr/proposition-65-clear-and-reasonable-warnings-safe-harbor-methods-and-content

Best practical order for the LLC launch path

  1. Choose an Etsy-eligible product lane first.
  2. Choose the entity name and shop name.
  3. File LLC-1.
  4. Get the EIN.
  5. Open the bank account.
  6. Decide whether you will be Etsy-only or will also have direct sales; do the CDTFA analysis early.
  7. File LLC-12 early (don’t wait until the end of the window).
  8. If your operating name differs, do the county FBN/DBA branch (and publication).
  9. Check city permits, zoning, and Los Angeles rules if applicable.
  10. Open and verify your Etsy shop (identity verification).
  11. Build listings, shipping profiles, and shop policies.
  12. Calendar FTB annual tax and the Form 568 filing stack.
Back to top Next: California tax stack
State filing and tax California tax stack Keep the California registration, tax, and maintenance rules together while you launch. Everyone 6 checks

1. EIN

IRS start pages:

  • Most LLCs should get one.
  • Sole proprietors may still use one.
  • EIN start: https://www.irs.gov/businesses/small-businesses-self-employed/get-an-employer-identification-number
  • Form SS-4 info: https://www.irs.gov/forms-pubs/about-form-ss-4

2. California sales tax / seller’s permit analysis (CDTFA)

CDTFA “marketplace-only” guidance is narrow and does not automatically cover non-marketplace sales.

  • CDTFA “marketplace-only” guidance is narrow and does not automatically cover non-marketplace sales.
  • If you might sell outside Etsy even occasionally (craft fairs, pop-ups, direct invoices), do the CDTFA decision analysis before launch.

3. Marketplace facilitator + Etsy sales-tax collection

Etsy states it collects and remits California sales tax on Etsy orders. Keep that platform rule separate from your own CDTFA registration and resale analysis:

  • https://help.etsy.com/hc/en-us/articles/360000343968-How-US-State-Sales-Tax-Applies-to-Etsy-Orders

4. Resale purchases

If you will buy inventory or components for resale and you are registered (or otherwise eligible), use California’s resale certificate rules.

  • CDTFA Pub 73 (“Your California Seller’s Permit”): https://www.cdtfa.ca.gov/formspubs/pub73.pdf

5. LLC tax treatment and recurring obligations (FTB)

California generally follows federal classification rules, but California’s LLC annual tax and LLC fee rules still apply.

  • LLC overview: https://www.ftb.ca.gov/file/business/types/limited-liability-company/index.html
  • Due dates (includes annual tax and estimated fee timing): https://www.ftb.ca.gov/file/when-to-file/due-dates-business.html
  • FTB states the first-year annual LLC tax exemption applied only for tax years beginning on or after January 1, 2021 and before January 1, 2024. If you form an LLC now (2026), you should assume the $800 annual tax applies unless you qualify for a narrow exception. Source: https://www.ftb.ca.gov/file/business/types/limited-liability-company/index.html

6. LLC annual tax and fee forms

Common form references:

  • FTB 3522 (LLC Tax Voucher) for the annual tax payment.
  • Form 568 (LLC Return of Income).
  • FTB 3536 (Estimated Fee for LLCs) when the LLC expects to owe an LLC fee.
  • Due dates: https://www.ftb.ca.gov/file/when-to-file/due-dates-business.html
  • Form 568 booklet (current year): https://www.ftb.ca.gov/forms/2025/2025-568-booklet.html
Back to top Next: Etsy account and operations
Platform setup Etsy account and operations Use this section for the Etsy-specific account, plan, eligibility, and operations work. Everyone 5 steps

  1. Step 9: Create and verify your Etsy shop

    Platform step 1

    Etsy onboarding is a real compliance gate. Expect:

    Why it matters: Also plan for “seller info” confirmation and disclosures if Etsy asks (example: compliance programs and thresholds can trigger additional required info displays). Start page:

    • identity verification (Etsy states it partners with Persona for identity verification): https://help.etsy.com/hc/en-us/articles/22481159004567-How-to-Verify-Your-Identity-on-Etsy
    • shop onboarding steps (and the possibility of a one-time shop set-up fee shown during onboarding): https://help.etsy.com/hc/en-us/articles/115015672808
    • https://help.etsy.com/hc/en-us/articles/14553858116759-Etsy-Asked-Me-to-Confirm-My-Seller-Info

  2. Step 10: Understand Etsy fees (before you price anything)

    Platform step 2

    Practical rule:

    Why it matters: Price the first listings only after you account for listing fees, transaction fees, payment-processing fees, shipping, packaging, returns risk, and any advertising charges you choose to use.

    • Etsy does not use a monthly seller-plan choice for a standard U.S. shop.
    • As of April 26, 2026, Etsy's public Fees & Payments Policy says a one-time setup fee may apply when you open the shop, the listing fee is $0.20 per listing, listings renew every 4 months, and the transaction fee is 6.5% of the displayed price plus shipping and gift wrapping.
    • Etsy Help says payment-processing fees apply on orders paid through Etsy Payments, and the exact processing fee schedule depends on the seller's country.
    • Offsite Ads are automatically enabled. Etsy says participation may become mandatory if your shop has made more than USD 10,000 in sales in the previous 12 months, so re-check the live wording before assuming you can opt out later.

  3. Step 11: Set up production partners (only if you truly qualify)

    Platform step 3

    If you will use a production partner (including print-on-demand):

    Why it matters: Key sources:

    • confirm the item is your original design (or buyer-customized), and
    • disclose the production partner per Etsy policy.
    • Production partners: https://help.etsy.com/hc/articles/360000336547
    • “What can I sell” and reselling notes: https://help.etsy.com/hc/en-us/articles/360024112614

  4. Step 12: Build your “seller-managed shipping” operations

    Platform step 4

    Minimum operations setup:

    Why it matters: Key Etsy sources:

    • Set up your storefront and shop sections.
    • Set clear processing times and realistic delivery expectations.
    • Use tracked shipping for physical products whenever possible.
    • Decide whether you will buy shipping labels through Etsy.
    • Storefront: https://help.etsy.com/hc/en-us/articles/360000338047-How-to-Set-Up-Your-Storefront
    • Shipping labels: https://help.etsy.com/hc/en-us/articles/360001967188-How-to-Purchase-Shipping-Labels-on-Etsy

  5. Step 13: Understand payout friction (reserves) and disputes

    Platform step 5

    New shops should plan for “money timing” risk:

    Why it matters: Etsy also has an order-dispute framework and a “purchase protection” style program that can cover eligible orders up to $250 (and it is explicitly not insurance). Policy page (effective date matters):

    • Etsy describes payment account reserves and how tracking can release held funds: https://help.etsy.com/hc/en-us/articles/360058722214-What-is-a-Payment-Account-Reserve-
    • https://www.etsy.com/legal/policy/purchase-protection-program-for-sellers/34509585385
Back to top Next: Local permits and Los Angeles branch
Local branch Local permits and Los Angeles branch These local and city checks can still change the answer even after the state and platform path is clear. Location-specific 2 branches

Local permits and location checks

California pushes many business-permit questions down to counties and municipalities.

  • California pushes many business-permit questions down to counties and municipalities.
  • For any place where the business will operate:
  • check SOS “Business Resources” (county/city pointers): https://www.sos.ca.gov/business-programs/business-entities/resources
  • confirm city business license / tax registration requirements,
  • confirm zoning and home occupation rules (especially if you will store inventory or have repeated carrier pickups).

Los Angeles Appendix

If the business operates in the City of Los Angeles, add one more review layer.

  • If the business operates in the City of Los Angeles, add one more review layer.
  • Los Angeles Office of Finance start pages:
  • Business tax FAQ: https://finance.lacity.gov/business-tax-information-faq
  • How to register for a BTRC: https://finance.lacity.gov/tax-education/new-business-registration/how-register-btrc
  • Renewal instructions: https://finance.lacity.gov/business-tax-renewal-instructions
  • Los Angeles Business Navigator home-based business overview:
  • https://business.lacity.gov/plan/home-based-business
  • Practical caution:
  • If your Etsy operations involve meaningful inventory storage, frequent deliveries/pickups, or nonresident workers, get local confirmation before assuming a home-based setup is allowed.
Back to top Next: Employees and insurance
Optional branch Employees and insurance Use this branch if you plan to hire or need the insurance follow-up that comes with scaling. Only if hiring or scaling 3 branches

1. Employer registration (EDD)

EDD employer registration start page: https://edd.ca.gov/en/payroll_taxes/Am_I_Required_to_Register_as_an_Employer/

  • EDD employer registration start page: https://edd.ca.gov/en/payroll_taxes/Am_I_Required_to_Register_as_an_Employer/

2. Workers’ compensation

California DIR start page: https://www.dir.ca.gov/dwc/employer.htm

  • California DIR start page: https://www.dir.ca.gov/dwc/employer.htm

Insurance reality

Etsy’s “Purchase Protection” style program is not insurance. If you sell physical products, you should still evaluate commercial general liability and product liability insurance, and you may want shipping insurance for higher-value shipments.

  • Etsy’s “Purchase Protection” style program is not insurance. If you sell physical products, you should still evaluate commercial general liability and product liability insurance, and you may want shipping insurance for higher-value shipments.
  • Etsy shipping labels may allow optional insurance purchase on some carriers. Source: https://help.etsy.com/hc/en-us/articles/360001988847-Insurance-and-Claims-for-Shipping-Labels
Back to top Next: Ongoing compliance calendar
Stay compliant Ongoing compliance calendar Keep the recurring compliance checks and live-operating routine visible after launch. Everyone 5 groups

Before first sale

  • Finish your entity or county FBN/DBA setup (if needed).
  • Get EIN if applicable.
  • Open a bank account and start bookkeeping.
  • Do the CDTFA marketplace-only vs direct-sales analysis.
  • Check local permits, zoning, and home-occupation limits.
  • Complete Etsy shop onboarding and identity verification.

Weekly (early stage)

  • Keep tracking on shipments and respond quickly to buyer messages.
  • Audit listings for policy compliance (photos, descriptions, production-partner disclosure).

Monthly

  • Reconcile Etsy fees, refunds, and shipping label charges.
  • Review reserve status and cash flow.
  • Set aside tax money based on profit (income tax) and sales tax (if you have any non-marketplace taxable sales).

Quarterly

  • If you are registered with CDTFA for direct sales, file and pay on your assigned schedule.
  • If you have employees, handle EDD reporting and deposits on schedule.

Annual or periodic

  • California SOS LLC-12 initial and biennial statement of information (LLCs only).
  • California FTB LLC annual tax and Form 568 filing stack (LLCs only).
  • Renew any city business-tax registration / license requirements (city-specific).
Back to top Next: Common mistakes
Avoid these Common mistakes These are the repeated beginner errors called out in the research pack. Everyone 6 mistakes

Common Mistakes New Etsy Operators Make

  • Launching products that do not qualify under Etsy’s creativity standards (or that violate the prohibited items rules).
  • Treating “I’m only selling on Etsy” as a permanent tax answer, then adding craft fairs or a website without re-doing CDTFA analysis.
  • Underpricing by ignoring Etsy fee stacking and ad attribution fees.
  • Poor documentation: no receipts, no supplier invoices, and no production-partner disclosures.
  • Weak shipping operations (no tracking) leading to reserves, cases, and cash flow problems.
  • Mixing personal and business money.

Practical first-launch recommendation

If you are testing casually with minimal risk, sole proprietor can work (especially if you will not hold inventory or ship significant volume yet).

If you intend to build a durable Etsy business selling physical products, a single-member LLC is often the better long-term fit in California because the cost of mistakes (claims, chargebacks, local compliance issues, or a platform disruption) is usually higher than founders expect.

Back to top Next: Full official source directory
Full appendix Full official source directory Every official source row from the research pack, kept in its full table structure. Everyone 52 rows

Source group

Statewide Start

California Secretary of State

State start-here page

Form / portal Guidance page
Fee None for the page
Timing First decision
Who needs it Everyone

High-level overview of entity types (including sole proprietor and LLC).

Open official link

California Secretary of State

State business portal

Form / portal bizfile portal
Fee Varies by filing
Timing Before launch and during maintenance
Who needs it Filing entities

Entry point for many SOS business searches and filings.

Open official link

California Secretary of State

County/city compliance starting point

Form / portal Business Resources
Fee None for the page
Timing Before local filings
Who needs it Everyone

SOS points founders to counties/cities for licenses, FBN/DBA, zoning, permits.

Open official link

CalGOLD (California online permit assistance tool)

Permit identification tool

Form / portal CalGOLD tool
Fee None for the page
Timing Before local permits
Who needs it Everyone

Use to identify permits/licenses by location and business type.

Open official link

Source group

Entity Choice and Formation

California Secretary of State

Compare business types

Form / portal Guidance page
Fee None for the page
Timing First decision
Who needs it Everyone

Confirms sole proprietorship basics and points to LLC process.

Open official link

California Secretary of State

LLC formation hub

Form / portal Forms hub
Fee Varies
Timing Before launch
Who needs it LLC founders

Contains links to LLC-1, LLC-12, amendments, and other LLC filings.

Open official link

California Secretary of State

LLC fee schedule (quick check)

Form / portal Fees table
Fee None for the page
Timing Before filing
Who needs it LLC founders

SOS fee schedule lists LLC formation and statement filing fees and indicates online filing.

Open official link

California Secretary of State

LLC formation filing

Form / portal bizfile + LLC-1
Fee $70
Timing At formation
Who needs it Single-member LLC founders

Use the SOS hub to file online and access the LLC-1 PDF; confirm current fees on the SOS fee schedule.

Open official link

California Secretary of State

Post-filing statement

Form / portal Statement of Information (Form LLC-12) / bizfile
Fee $20
Timing Within 90 days and then every 2 years
Who needs it LLC founders

Contains the LLC-12 details and filing methods.

Open official link

California Secretary of State

Statements filing guidance

Form / portal Statement filing tips
Fee None for the page
Timing During maintenance
Who needs it Filing entities

SOS statement timing windows and practical filing guidance.

Open official link

Source group

Sole Proprietor and Local Name Filings

California Secretary of State

Sole proprietor baseline

Form / portal Guidance page
Fee No SOS formation fee
Timing Before launch
Who needs it Sole proprietors

Confirms no SOS formation filing for sole proprietors.

Open official link

California Legislature (Leginfo)

FBN/DBA publication requirement

Form / portal Statute
Fee None for the page
Timing After county filing
Who needs it People using a trade name

Requires publication within 45 days after filing and filing affidavit of publication within 45 days after completion.

Open official link

California Legislature (Leginfo)

FBN/DBA expiration rules

Form / portal Statute
Fee None for the page
Timing Ongoing
Who needs it People using a trade name

FBN statements generally expire 5 years after filing; can expire earlier on certain changes.

Open official link

California Secretary of State

County/city lookup

Form / portal County/city pointers
Fee Varies
Timing Before FBN
Who needs it Sole proprietors and LLCs using a DBA

Your county clerk handles the actual FBN statement filing.

Open official link

Source group

Federal and State Tax Setup

IRS

EIN start page

Form / portal EIN application
Fee Free
Timing Early in setup
Who needs it LLC founders and businesses that need an EIN

Standard federal EIN path.

Open official link

IRS

EIN paper fallback

Form / portal Form SS-4
Fee Free
Timing If not applying online
Who needs it Applicants using mail/fax paths

IRS SS-4 overview.

Open official link

CDTFA

CDTFA registration portal

Form / portal Online Services - Registration
Fee None for registration portal
Timing Before taxable direct sales if registration is required
Who needs it California sellers who must register

Registration requirement depends on sales mix (marketplace-only vs direct).

Open official link

CDTFA

Seller’s permit guidance

Form / portal Publication 73
Fee None for the page
Timing During planning
Who needs it Founders evaluating seller’s-permit duties

General seller’s permit operational guidance.

Open official link

CDTFA

Marketplace-only registration decision aid

Form / portal Publication 584
Fee None for the page
Timing Before and after launch
Who needs it Marketplace sellers and multi-channel sellers

Flowchart: marketplace-only sellers generally do not register solely for marketplace sales; direct sales can change the answer.

Open official link

CDTFA

Marketplace facilitator law overview

Form / portal Tax guide
Fee None for the page
Timing During planning
Who needs it Marketplace sellers and facilitators

Background on who is treated as the retailer for marketplace-facilitated sales.

Open official link

CDTFA

Marketplace seller high-level baseline

Form / portal Pub 51 (online)
Fee None for the page
Timing During planning
Who needs it Online sellers

Pub 51 states that sellers who sell exclusively through a registered marketplace facilitator are generally not required to be registered as a retailer with CDTFA.

Open official link

Source group

Entity Tax Maintenance (FTB)

FTB

LLC overview (FTB)

Form / portal Guidance page
Fee None for the page
Timing During planning and annually
Who needs it California LLCs

Includes annual tax and fee overview and time-sensitive exemptions.

Open official link

FTB

Due dates (businesses)

Form / portal Due-date table
Fee None for the page
Timing Calendar your year
Who needs it California LLCs

Includes $800 annual tax due timing and estimated fee timing.

Open official link

FTB

Form 568 booklet

Form / portal Booklet (Form 568)
Fee None for the page
Timing Annual return
Who needs it California LLCs

Official LLC return reference for fee thresholds and filing stack.

Open official link

FTB

Annual tax payment voucher

Form / portal FTB 3522
Fee $800 annual tax (payment amount)
Timing 15th day of 4th month after tax year begins
Who needs it California LLCs

Payment voucher and instructions for the annual tax payment.

Open official link

FTB

Estimated LLC fee voucher

Form / portal FTB 3536
Fee Varies by LLC income
Timing 15th day of 6th month of the tax year (when applicable)
Who needs it LLCs owing an LLC fee

Used to estimate and pay the LLC fee when thresholds apply.

Open official link

Source group

Federal Reporting (BOI / CTA)

FinCEN

BOI status and filing portal

Form / portal BOI reporting hub
Fee None
Timing Re-check before forming
Who needs it Everyone forming an entity

FinCEN’s March 26, 2025 update states U.S.-created entities are exempt; foreign entities may still have reporting deadlines. This is unusually time-sensitive; re-check.

Open official link

Source group

Employees, Payroll, and Insurance

California EDD

Employer registration

Form / portal e-Services for Business
Fee None for registration
Timing Per EDD rule (ex: within 15 days after paying more than $100 wages in a calendar quarter)
Who needs it Businesses hiring employees

Read EDD’s rule carefully; triggers are fact-specific.

Open official link

California DIR (DWC)

Workers’ compensation

Form / portal Insurance policy or authorized self-insurance
Fee Premium-based or varies
Timing Before or at hiring
Who needs it Most employers

California requires workers’ comp coverage even with 1 employee.

Open official link

Source group

Platform Setup (Etsy)

Etsy Help

Open a shop (onboarding)

Form / portal Signup flow
Fee Shop set-up fee may apply; varies by location
Timing Before launch
Who needs it All Etsy sellers

Etsy notes a one-time, non-refundable shop set-up fee may be shown during onboarding (amount varies by location).

Open official link

Etsy Help

Identity verification

Form / portal Verification flow
Fee None stated on help page
Timing During onboarding
Who needs it Many new sellers

Etsy states it partners with Persona for identity verification.

Open official link

Etsy Help

Fees overview

Form / portal Fees overview
Fee Varies by fee type
Timing Ongoing
Who needs it All Etsy sellers

Includes listing fee, transaction fee, payment processing, Offsite Ads, and set-up fee notes.

Open official link

Etsy Help

Listing fee

Form / portal Listing / renewal
Fee $0.20 per listing/renewal
Timing When listing/renewing
Who needs it All Etsy sellers

Listing expires after 4 months (per Etsy fee pages); renewals can trigger fees.

Open official link

Etsy Help / Etsy legal

Transaction fee

Form / portal Transaction fee
Fee 6.5%
Timing Per sale
Who needs it All Etsy sellers

Applies to order amount; see Etsy sources for what’s included.

Open official link

Etsy Help

Payment processing fee (US)

Form / portal Etsy Payments
Fee 3% + $0.25 (US bank accounts)
Timing Per sale
Who needs it Sellers using Etsy Payments

Rate varies by bank location; use the table.

Open official link

Etsy Help

Offsite Ads

Form / portal Offsite Ads
Fee 12% or 15% per attributed order (rules vary by revenue)
Timing Per attributed sale
Who needs it Many Etsy sellers

Opt-out ability depends on the shop’s prior 12 months revenue; re-check.

Open official link

Etsy Help

Etsy Plus

Form / portal Subscription
Fee $10 / month
Timing Optional
Who needs it Sellers who want extra tools

Optional subscription with monthly listing and ads credits.

Open official link

Etsy legal

Seller policy floor

Form / portal Policy
Fee None
Timing Ongoing
Who needs it All Etsy sellers

Your core obligations as a seller.

Open official link

Etsy legal

Creativity standards

Form / portal Policy
Fee None
Timing During product selection and listing
Who needs it All Etsy sellers

Defines handmade/vintage/supplies and examples; key for eligibility.

Open official link

Etsy legal

Prohibited items

Form / portal Policy
Fee None
Timing During product selection and listing
Who needs it All Etsy sellers

Prohibits/restricts certain items; has effective-date versions, so re-check.

Open official link

Etsy Help

Production partners

Form / portal Disclosure requirements
Fee None
Timing Before listing
Who needs it Sellers using production assistance

Production partner use is allowed for original designs, with disclosure requirements.

Open official link

Source group

Fulfillment, Logistics, or Store Operations (Etsy seller-managed shipping)

Etsy Help

Storefront setup

Form / portal Shop homepage settings
Fee None
Timing Before launch
Who needs it Etsy sellers

Storefront completeness can affect trust and visibility.

Open official link

Etsy Help

Shipping labels

Form / portal Label purchase flow
Fee Varies by carrier/service
Timing Per shipment
Who needs it Etsy sellers shipping physical items

Etsy supports label purchase for certain carriers (US includes USPS/UPS/FedEx).

Open official link

Etsy Help

Payment account reserve

Form / portal Reserve explanation
Fee None
Timing Ongoing
Who needs it Etsy sellers (sometimes)

Explains reserves; tracking can release held funds under certain conditions.

Open official link

Etsy legal

Purchase Protection (seller)

Form / portal Policy
Fee None
Timing When cases arise
Who needs it Etsy sellers

This is not insurance; it is a program with eligibility requirements and effective dates.

Open official link

Source group

Insurance Checkpoint

Etsy Help

Shipping insurance option via Etsy labels

Form / portal Shipsurance / carrier options
Fee Varies
Timing When buying a label
Who needs it Physical product sellers

Some Etsy shipping labels allow optional insurance purchase (see Etsy help page).

Open official link

Unverified (not an Etsy requirement in public policy as of April 26, 2026)

Business/product liability insurance (non-platform)

Form / portal Third-party insurance
Fee Premium varies
Timing Before scaling
Who needs it Physical product sellers

Etsy’s Purchase Protection program is not insurance; evaluate general liability/product liability separately.

Open official link

Source group

California Product Compliance (common Etsy physical-product friction)

OEHHA (CalEPA)

Proposition 65 warnings baseline

Form / portal Warning guidance
Fee None for the page
Timing Before selling into CA when relevant
Who needs it Physical product sellers

Applies based on chemicals/exposure; warning rules can change (OEHHA page includes dates).

Open official link

Source group

Los Angeles Branch

Los Angeles Office of Finance

City business tax baseline

Form / portal FAQ
Fee None for the page
Timing If business is in Los Angeles
Who needs it Los Angeles-based businesses

Start page for “are you engaged in business” and basics.

Open official link

Los Angeles Office of Finance

Register for a BTRC

Form / portal BTRC registration
Fee Varies
Timing When beginning business in the city
Who needs it Los Angeles-based businesses

Registration step for the Business Tax Registration Certificate.

Open official link

Los Angeles Office of Finance

Renewal instructions

Form / portal Renewal instructions
Fee Varies
Timing Annual renewal cycle
Who needs it Los Angeles-based businesses

Page includes current-year small business exemption language and renewal/interest timing; re-check annually.

Open official link

LA Business Navigator

Home-based business rules (home occupation)

Form / portal Guidance
Fee None for the page
Timing Before operating from home
Who needs it Los Angeles home-based businesses

Lists basic home occupation constraints (deliveries/pickups, employees, visibility, equipment).

Open official link
Back to top