LaunchPath

Flagship channel-state reference guide

Start Etsy in Michigan: 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 28, 2026 Reference mode Dense appendix

Built from reviewed public pages for Michigan, IRS, FinCEN, Detroit, 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 28, 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 Michigan, you usually need to do five things in order: Everyone 5 steps

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

  1. Choose your setup: sole proprietorship vs single-member LLC.
  2. Get your federal and Michigan registrations in place before launching.
  3. Verify local county or city permit, zoning, and home-business rules.
  4. Open and verify your Etsy account or storefront.
  5. Launch only after your product, fulfillment, tax, and compliance setup is ready.

Practical first-launch recommendation

If you are testing casually with minimal risk, sole proprietor can work.

If you intend to build a real Etsy business, single-member LLC is usually the better long-term path.

Avoid these first-launch mistakes

  • Buying inventory or launching before checking legal and platform restrictions
  • Using a brand name without filing the right Michigan county assumed-name document or LARA Certificate of Assumed Name
  • Mixing personal and business money

Michigan-specific friction

Michigan's marketplace-only sales-tax answer is simpler than New York or Tennessee, but it is not the whole story if you also make direct sales.

  • Michigan's marketplace-only sales-tax answer is simpler than New York or Tennessee, but it is not the whole story if you also make direct sales.
  • Michigan pushes sole-proprietor assumed-name filings down to the county clerk, so the naming branch is local instead of one clean statewide online filing.
  • Michigan's resale-certificate branch can become awkward for a marketplace-only seller if a supplier wants a Michigan sales-tax license number on Form 3372.
  • Detroit adds real local tax, licensing, zoning, and occupancy review if the business operates there.
  • Michigan LLC founders still need to track the recurring February 15 annual-statement deadline.

Etsy-specific friction

Etsy identity verification and bank verification can stall onboarding if your records do not match.

  • Etsy identity verification and bank verification can stall onboarding if your records do not match.
  • Etsy's allowed-item rules are narrower than broad online-marketplace eligibility.
  • Listing fees, transaction fees, payment-processing fees, and Offsite Ads can stack quickly if you price casually.
  • Restricted-category, reselling, or listing-accuracy reviews can block listings after you already bought stock.
  • Etsy's public shop set-up fee is still location-variable.

Insurance reality

Etsy's public protection language is not a substitute for business insurance.

  • Etsy's public protection language is not a substitute for business insurance.
  • Etsy's Purchase Protection program may cover certain qualifying buyer refunds up to $250, but Etsy says the program is not an insurance policy, warranty, or guarantee.
  • Etsy Help recommends shipping insurance for higher-value orders, and commercial general liability or product liability coverage becomes more important as order volume and product risk increase.
  • Etsy's current public help says Purchase Protection updates begin on May 7, 2026, so re-check the live help and legal-policy pages if your launch is on or after that date.
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

  • Pick your entity.
  • Pick your business name.
  • Decide your Etsy product lane.
  • Avoid regulated or high-risk categories for your first launch unless the request specifically wants them.
  • Confirm the offer is not blocked by law, safety rules, or platform policy.
  • Make sure you can document sourcing, licensing, or supplier legitimacy where relevant.

Do these before your first sale

  • Form the business or file the right Michigan assumed-name document if needed.
  • Get an EIN from the IRS if applicable.
  • Open a dedicated business bank account.
  • Register for Michigan tax or seller permits that apply.
  • Check local permits and home-based business rules.
  • Create your Etsy account and complete verification.

Do these before launch goes live

  • Complete the Etsy shop setup steps.
  • Confirm product, category, or account eligibility.
  • Set up fulfillment, shipping, inventory, or storefront operations correctly.
  • Build the first listing, store pages, or checkout flow correctly.
  • Start small so you can test demand and catch compliance mistakes early.
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

  • Michigan does not require a LARA entity-formation filing if you operate as a sole proprietor under your own legal name.
  • If you use a trade name, Michigan public guidance routes the assumed-name filing to the county clerk, not to LARA.
  • Business income generally runs through your personal tax return unless facts change the tax treatment.
  • You usually do not get a liability shield.

Why someone chooses it

  • Faster launch
  • Lower up-front filing costs
  • Fewer entity maintenance steps

Main downside: Personal liability

single-member LLC

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

What it means

  • Michigan LLC formation uses Articles of Organization (CSCL/CD-700) filed with LARA.
  • A Michigan LLC lists a resident agent and registered office, and then keeps up the annual LLC Annual Statement.
  • Federal tax treatment is usually disregarded-entity treatment by default for a single-member LLC, but Michigan still expects the business to handle tax registration, local permitting, and employer setup separately.

Why someone chooses it

  • Liability protection
  • Cleaner setup for banking, vendors, bookkeeping, and scaling
  • Better fit for trademarks, insurance, employees, and later restructuring

Main downside: Higher setup friction and cost 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 a low-risk launch model

    Main guide step 1

    For a first launch, stay inside the safest lane:

    Why it matters: Practical rule: If the offer touches health, safety, children, regulated finance, chemicals, alcohol, medical claims, or restricted IP, slow down and do category-specific compliance research before buying or launching.

    • simple handmade items
    • seller-designed items you can document as your own work
    • clearly qualifying vintage items
    • clearly qualifying craft or party supplies
    • no high-risk categories from food, supplements, cosmetics, medical claims, batteries-heavy hazmat, alcohol, children's products
    • no products or offers that require specialized compliance unless the guide is explicitly built for them

  2. Step 2: Choose your name and brand approach

    Main guide step 2

    You need to decide whether you are:

    Why it matters: Important:

    • operating under your own legal name,
    • using a county assumed name,
    • selling your own handmade items,
    • selling your own original designs,
    • selling qualifying vintage,
    • or selling qualifying craft or party supplies.
    • Etsy shop names do not replace the legal entity name or tax records behind the business.
    • Etsy account, bank, identity, and tax details still need to match real-world records.
    • If you plan to use a production partner, Etsy expects that to be disclosed in the applicable listings.
    • Michigan's reviewed public sole-proprietor name path is county-based rather than a statewide LARA assumed-name filing.

  3. Step 3: Form the business

    Main guide step 3

    If you choose sole proprietor: If you sell under your legal name, this packet did not verify a separate Michigan state entity-formation filing.

    • If you choose sole proprietor: If you sell under your legal name, this packet did not verify a separate Michigan state entity-formation filing.
    • If you choose sole proprietor: If you use a trade name, file the assumed-name document with the county clerk in each county where the business is carried on.
    • If you choose sole proprietor: Michigan public guidance reviewed for this packet treats the sole-proprietor assumed-name path as county-based rather than LARA-based.
    • If you choose single-member LLC: Do this in order:
    • If you choose single-member LLC: Check Michigan naming rules and distinguishability before filing, and reserve the name if you need more time.
    • If you choose single-member LLC: File Articles of Organization (CSCL/CD-700) with LARA.
    • If you choose single-member LLC: Adopt the operating agreement internally, get the EIN, and put the February 15 annual-statement date on the calendar immediately.
    • If you choose single-member LLC: If the LLC will use a different public-facing name, file Certificate of Assumed Name (CSCL/CD-541) with LARA.

  4. Step 4: Get your EIN

    Main guide step 4

    Use the IRS EIN application if applicable. For many LLCs this is required. For many sole proprietors it is optional but still useful for banking, vendors, and platform setup.

  5. Step 5: Open banking and bookkeeping

    Main guide step 5

    Do this right away:

    • Open a business checking account.
    • Use one account and one card for business only.
    • Save every receipt, invoice, shipping bill, platform fee statement, and tax record.
    • Build a tax folder and a compliance folder from day one.

  6. Step 6: Register for state tax, seller permit, or resale setup

    Main guide step 6

    Michigan tax registration runs through MTO or mailed Form 518.

    • Michigan tax registration runs through MTO or mailed Form 518.
    • Michigan says retailers making direct taxable sales to the final consumer need a sales-tax license before those sales begin.
    • Michigan's public marketplace-facilitator FAQ says if all of your sales are through facilitators with Michigan nexus, you generally do not have a sales-tax filing obligation for those marketplace sales.
    • If you also make direct sales through your own site, invoices, local pickup, or in-person events, Michigan says you report only that outside-marketplace activity on your own return.
    • Michigan uses Form 3372 for resale or exemption documentation, but the retail-resale line asks for a Michigan sales-tax license number, so a marketplace-only Etsy seller should treat the supplier resale path as a real friction point instead of assuming it will be easy.

  7. Step 7: Check local permits, county rules, and home-business limits

    Main guide step 7

    Michigan may not have one statewide local-business form for every county or city.

    Why it matters: Do this before operating:

    • check the state business portal,
    • contact the county clerk if you need a county-level assumed-name filing,
    • contact the city, town, or village office where you will operate,
    • ask about zoning, occupancy, and local permit rules.

  8. Step 8: If you hire employees, handle payroll registrations and insurance

    Main guide step 8

    If you do not hire anyone yet, skip this for now.

    Why it matters: If you hire:

    • Register Michigan withholding through MTO or Form 518.
    • Open the unemployment account through Michigan UIA registration and MiUI.
    • Michigan workers' compensation generally applies when the business regularly employs 1 or more employees 35 hours or more per week for 13 weeks or longer during the prior 52 weeks, or 3 or more employees at one time.
    • Michigan does not have a general private-employer disability-insurance registration in the public source set reviewed here, but the Earned Sick Time Act is a live branch that took effect February 21, 2025.
    • If an owner-exclusion form might matter, treat that branch as fact-specific and confirm the current workers' compensation form path before relying on it.

  9. Step 9: Create your Etsy shop

    Main guide step 9

    Have these ready:

    Why it matters: Platform registration flow: Important Etsy nuance:

    • government-issued ID
    • phone number
    • email address
    • bank account information
    • tax information
    • business registration or license if required
    • proof of address or identity if the platform asks for it
    • Etsy says it does not require you to hold a business license just to sell on Etsy.
    • Etsy also says you still must follow the laws that apply to you as a small business selling online.
    • That means Michigan, county, Detroit, and home-business compliance do not disappear just because Etsy onboarding lets you proceed.
    • Start at Etsy's public shop-opening guide and open the shop from Etsy.com/sell.
    • Complete the setup in a desktop web browser, choose the shop language, country, currency, and a compliant shop name, and turn on required two-factor authentication.
    • Choose whether you are onboarding as an individual / sole proprietorship or as an incorporated business.
    • Connect your bank account, add your billing card, and enroll in Etsy Payments.
    • Create at least one compliant listing, choose the right item category, and set shipping and processing details accurately.
    • Complete identity verification and seller-information checks. Etsy's public help says U.S. bank verification uses Plaid, identity verification uses Persona plus government-issued ID, and missed seller-information deadlines can block payouts or place the shop into Etsy-initiated vacation mode.

  10. Step 10: Choose the right platform plan

    Main guide step 10

    Practical rule:

    Why it matters: Price the first listings only after you account for the setup-fee possibility, listing fees, transaction fees, payment-processing fees, shipping, packaging, return risk, and any ad charges you choose to use. Treat Etsy Plus as optional. It only becomes worth testing if the shop will actually use its extra customization tools, monthly credits, and restock-request features often enough to justify the recurring fee.

    • Etsy does not require a monthly seller-plan choice for a normal U.S. shop.
    • As of April 28, 2026, Etsy's public fee pages show a listing fee of $0.20 per listing, listings renew every 4 months, the transaction fee is 6.5%, and U.S. payment-processing fees are 3% + $0.25.
    • Etsy's public help also says a one-time shop set-up fee may apply, but the amount varies by location.
    • Offsite Ads are automatically enabled. Etsy's public help still shows 15% below the $10,000 USD prior-365-day revenue threshold, 12% at the higher tier, and a $100 per-order cap, but the exact threshold wording should still be re-checked if the shop is near that edge.
    • Etsy Plus is optional at $10 per month and is not required for a normal Michigan first launch.

  11. Step 11: Decide whether brand or IP programs belong in the initial launch

    Main guide step 11

    For a first launch, keep the brand story simple and compliant instead of overbuilding trademark work before demand is proven.

    • Etsy does not have a marketplace-seller brand registry requirement you must join before a normal launch.
    • What matters first is whether the item fits Etsy's allowed categories, whether you own the rights to the design or branding you are using, and whether any production partner needs to be disclosed.
    • If you use print-on-demand or another production partner, Etsy says the partner must be producing your original design and must be disclosed on the applicable listings.
    • If you are making the item yourself, keep your own photos, process notes, and supplier records so you can support the listing if questions come up.

  12. Step 12: Complete the listing, shipping, and storefront branch

    Main guide step 12

    Use the Etsy-specific version of this section:

    Why it matters: For a beginner launch, seller-managed shipping is the baseline. Do not assume Etsy is warehousing or fulfilling ordinary shop inventory for you.

    • create the first listing in Shop Manager,
    • choose the right category and item type,
    • upload your own product photos and any video you need,
    • set processing time, shipping profile, returns policy, and origin details accurately,
    • disclose any production partner that qualifies,
    • and open the shop only after the first listing is accurate enough that you could ship the first order yourself.

  13. Step 13: Confirm product, service, or category eligibility before scaling

    Main guide step 13

    Etsy allows items that are made by a seller, designed by a seller, handpicked by a seller, or sourced by a seller within Etsy's current policy boundaries.

    • Etsy allows items that are made by a seller, designed by a seller, handpicked by a seller, or sourced by a seller within Etsy's current policy boundaries.
    • Mass-produced resale is not generally allowed in Etsy's handmade category.
    • Etsy Help says drop shipping is not allowed except in narrow craft-supply cases, and production partners are allowed only for the seller's original designs or a buyer's customization.
    • Vintage items must be at least 20 years old, and craft supplies have their own rule set.
    • Highly regulated, unsafe, infringing, or prohibited items can still be blocked even if Michigan would otherwise allow the business to operate.

  14. Step 14: Launch with a compliance-first operating routine

    Main guide step 14

    Once live, keep these habits:

    • reconcile payouts, fees, refunds, and reimbursements
    • monitor account health or store operations
    • maintain invoices and supplier records
    • keep tax reserves separate
    • avoid mixing personal and business spending
    • monitor margins, returns, and compliance issues

Best practical order for the LLC launch path

  1. Choose the Etsy product lane first.
  2. Choose the legal name and public brand plan.
  3. File Articles of Organization (CSCL/CD-700).
  4. Get the EIN.
  5. Open the bank account.
  6. Decide whether you are using the Michigan marketplace-only tax posture or registering for sales tax from day one.
  7. If needed, file CSCL/CD-541 for the assumed name.
  8. Check county and city permit, zoning, and occupancy rules.
  9. Build the Etsy shop and complete identity, bank, and seller-information verification.
  10. Finish the first listing, storefront, return-policy, and shipping setup.
  11. If hiring, add withholding, UIA, workers' compensation, and ESTA setup.
  12. Track the recurring February 15 annual statement and February 28 annual sales-tax return deadlines that apply.
Back to top Next: Michigan tax stack
State filing and tax Michigan tax stack Keep the Michigan registration, tax, and maintenance rules together while you launch. Everyone 7 checks

1. EIN

A single-member LLC generally needs an EIN.

  • A single-member LLC generally needs an EIN.
  • A sole proprietor may not always need one federally, but it is often practical anyway.

2. Michigan sales tax, seller permit, or equivalent registration

Michigan says retailers selling tangible personal property to the final consumer need a sales-tax license.

  • Michigan says retailers selling tangible personal property to the final consumer need a sales-tax license.
  • Michigan's public record says the sales-tax rate is 6% and Michigan does not allow city, local, or county sales tax.
  • Registration path: MTO eRegistration or mailed Form 518.
  • Public timing: MTO eRegistration is authenticated within 10-15 minutes of submission; mailed Form 518 processing is listed at 4-6 weeks.
  • Public license fee: none
  • Public return timing: monthly, quarterly, or annual depending on assignment, plus the annual return by February 28.

3. Marketplace or platform tax rule

Etsy, as marketplace facilitator, is the party that calculates, collects, and remits Michigan tax on qualifying Etsy-facilitated sales when it has Michigan nexus.

  • Etsy, as marketplace facilitator, is the party that calculates, collects, and remits Michigan tax on qualifying Etsy-facilitated sales when it has Michigan nexus.
  • Michigan's public FAQ says the marketplace-facilitator collection duty began January 1, 2020.
  • If all of your sales are through facilitators with Michigan nexus, Michigan says you have no sales-tax filing obligation for those marketplace sales.
  • If you also make direct sales through your own site, in-person events, or other non-marketplace lanes, Michigan says you exclude the Etsy-facilitated sales from your own return and report only the outside-marketplace activity.

4. Resale purchases or exempt purchasing

Practical takeaway:

  • Michigan uses Form 3372, Michigan Sales and Use Tax Certificate of Exemption.
  • The form includes a For Resale at Retail line that asks for a Michigan sales-tax license number.
  • It also includes a For Resale at Wholesale line that does not ask for that number.
  • source-backed inference as of April 28, 2026: a Michigan-based Etsy-only seller can have a no-filing marketplace posture, but the supplier resale-document path can still become awkward if the seller wants to claim retail resale exemption without a Michigan sales-tax license number.
  • If supplier resale paperwork matters on day one, confirm the intended path with Michigan Treasury before relying on assumptions.

5. Entity tax treatment

Federal default treatment for a single-member LLC is generally disregarded-entity treatment unless the owner elects otherwise.

  • Federal default treatment for a single-member LLC is generally disregarded-entity treatment unless the owner elects otherwise.
  • This packet did **not** identify a separate general Michigan LLC franchise-tax filing for a standard single-member LLC in the public official sources reviewed on April 28, 2026.
  • If you elect S corporation or C corporation treatment, or your fact pattern is more complex, mark the Michigan state-income-tax branch needs tax-specific verification.

6. Entity filing-fee or franchise-tax rule

Recurring Michigan LLC state maintenance identified in the public source set is the annual statement, not a separate public franchise-tax filing.

  • Recurring Michigan LLC state maintenance identified in the public source set is the annual statement, not a separate public franchise-tax filing.
  • Annual statement fee: $25
  • Due date: February 15
  • Use the LARA business filing system to re-check the live filing year.

7. If the founder changes entity type later

source-backed inference: if you move from sole proprietor to LLC, or change FEIN-backed tax identity later, update the facts across MTO, UIA, banking, supplier files, and Etsy account records so the registrations stay consistent.

  • source-backed inference: if you move from sole proprietor to LLC, or change FEIN-backed tax identity later, update the facts across MTO, UIA, banking, supplier files, and Etsy account records so the registrations stay consistent.
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 your Etsy shop

    Platform step 1

    Have these ready:

    Why it matters: Platform registration flow: Important Etsy nuance:

    • government-issued ID
    • phone number
    • email address
    • bank account information
    • tax information
    • business registration or license if required
    • proof of address or identity if the platform asks for it
    • Etsy says it does not require you to hold a business license just to sell on Etsy.
    • Etsy also says you still must follow the laws that apply to you as a small business selling online.
    • That means Michigan, county, Detroit, and home-business compliance do not disappear just because Etsy onboarding lets you proceed.
    • Start at Etsy's public shop-opening guide and open the shop from Etsy.com/sell.
    • Complete the setup in a desktop web browser, choose the shop language, country, currency, and a compliant shop name, and turn on required two-factor authentication.
    • Choose whether you are onboarding as an individual / sole proprietorship or as an incorporated business.
    • Connect your bank account, add your billing card, and enroll in Etsy Payments.
    • Create at least one compliant listing, choose the right item category, and set shipping and processing details accurately.
    • Complete identity verification and seller-information checks. Etsy's public help says U.S. bank verification uses Plaid, identity verification uses Persona plus government-issued ID, and missed seller-information deadlines can block payouts or place the shop into Etsy-initiated vacation mode.

  2. Step 10: Choose the right platform plan

    Platform step 2

    Practical rule:

    Why it matters: Price the first listings only after you account for the setup-fee possibility, listing fees, transaction fees, payment-processing fees, shipping, packaging, return risk, and any ad charges you choose to use. Treat Etsy Plus as optional. It only becomes worth testing if the shop will actually use its extra customization tools, monthly credits, and restock-request features often enough to justify the recurring fee.

    • Etsy does not require a monthly seller-plan choice for a normal U.S. shop.
    • As of April 28, 2026, Etsy's public fee pages show a listing fee of $0.20 per listing, listings renew every 4 months, the transaction fee is 6.5%, and U.S. payment-processing fees are 3% + $0.25.
    • Etsy's public help also says a one-time shop set-up fee may apply, but the amount varies by location.
    • Offsite Ads are automatically enabled. Etsy's public help still shows 15% below the $10,000 USD prior-365-day revenue threshold, 12% at the higher tier, and a $100 per-order cap, but the exact threshold wording should still be re-checked if the shop is near that edge.
    • Etsy Plus is optional at $10 per month and is not required for a normal Michigan first launch.

  3. Step 11: Decide whether brand or IP programs belong in the initial launch

    Platform step 3

    For a first launch, keep the brand story simple and compliant instead of overbuilding trademark work before demand is proven.

    • Etsy does not have a marketplace-seller brand registry requirement you must join before a normal launch.
    • What matters first is whether the item fits Etsy's allowed categories, whether you own the rights to the design or branding you are using, and whether any production partner needs to be disclosed.
    • If you use print-on-demand or another production partner, Etsy says the partner must be producing your original design and must be disclosed on the applicable listings.
    • If you are making the item yourself, keep your own photos, process notes, and supplier records so you can support the listing if questions come up.

  4. Step 12: Complete the listing, shipping, and storefront branch

    Platform step 4

    Use the Etsy-specific version of this section:

    Why it matters: For a beginner launch, seller-managed shipping is the baseline. Do not assume Etsy is warehousing or fulfilling ordinary shop inventory for you.

    • create the first listing in Shop Manager,
    • choose the right category and item type,
    • upload your own product photos and any video you need,
    • set processing time, shipping profile, returns policy, and origin details accurately,
    • disclose any production partner that qualifies,
    • and open the shop only after the first listing is accurate enough that you could ship the first order yourself.

  5. Step 13: Confirm product, service, or category eligibility before scaling

    Platform step 5

    Etsy allows items that are made by a seller, designed by a seller, handpicked by a seller, or sourced by a seller within Etsy's current policy boundaries.

    • Etsy allows items that are made by a seller, designed by a seller, handpicked by a seller, or sourced by a seller within Etsy's current policy boundaries.
    • Mass-produced resale is not generally allowed in Etsy's handmade category.
    • Etsy Help says drop shipping is not allowed except in narrow craft-supply cases, and production partners are allowed only for the seller's original designs or a buyer's customization.
    • Vintage items must be at least 20 years old, and craft supplies have their own rule set.
    • Highly regulated, unsafe, infringing, or prohibited items can still be blocked even if Michigan would otherwise allow the business to operate.
Back to top Next: Local permits and Detroit branch
Local branch Local permits and Detroit 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

Michigan pushes many naming, permit, zoning, and occupancy questions down to counties and municipalities.

  • Michigan pushes many naming, permit, zoning, and occupancy questions down to counties and municipalities.
  • For any place where the business will operate:
  • check the Michigan business start pages,
  • contact the county clerk if you need an assumed-name filing,
  • contact the city, village, or township office,
  • ask zoning or building staff whether storing inventory, receiving shipments, or running business operations at the address is allowed.
  • Typical local risk areas:
  • county assumed-name filing
  • home occupation restrictions
  • zoning for storage and shipment prep
  • signage
  • parking and carrier activity
  • business occupancy or building approvals

Detroit Appendix

If the business operates in Detroit, add one more review layer.

  • If the business operates in Detroit, add one more review layer.
  • Detroit says some, not all, business types need a city business license.
  • Detroit's BSEED licensing page says you should establish the business first and check zoning before applying.
  • Detroit's zoning page says that after required inspections pass, a Certificate of Occupancy is issued, and if the land use also needs a business license, the license can then be issued. The city says only then may the new use be opened and operated.
  • Detroit's local tax branch is separate enough that you should review the city's income-tax and withholding pages directly before relying on a generic Michigan-only setup checklist.
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 5 branches

1. Employer registration

Register Michigan withholding through MTO or Form 518.

  • Register Michigan withholding through MTO or Form 518.
  • Open the unemployment account through Michigan UIA employer registration and MiUI.
  • New liable employers should re-check the assigned tax-rate notice, but Michigan's public UIA guidance says many new employers begin at 2.7% for the first two years.

2. Workers' compensation

Michigan public guidance says coverage is required for:

  • Michigan public guidance says coverage is required for:
  • private employers regularly employing 1 or more employees 35 hours or more per week for 13 weeks or longer during the preceding 52 weeks,
  • or private employers regularly employing 3 or more employees at one time, including part-time employees.
  • Michigan also says a partner counts as an employee of the partnership, a corporate officer counts as an employee of the corporation, and a member who is a manager counts as an employee of an LLC.
  • A sole proprietor working alone is not an employee of that sole proprietorship.
  • Michigan workers' compensation generally applies when the business regularly employs 1 or more employees 35 hours or more per week for 13 weeks or longer during the prior 52 weeks, or 3 or more employees at one time.
  • If an owner-exclusion form might matter, treat that branch as fact-specific and confirm the current workers' compensation form path before relying on it.

3. Disability, paid leave, or similar coverage

This packet did not identify a general state-run Michigan private-employer disability-insurance registration.

  • This packet did not identify a general state-run Michigan private-employer disability-insurance registration.
  • But Michigan's Earned Sick Time Act is a live statewide employer branch.
  • The public ESTA page says the act took effect February 21, 2025.
  • The public ESTA FAQ says accrual begins February 21, 2025 for most employers and October 1, 2025 for a small business.
  • The same FAQ says employers can satisfy the law with an existing PTO policy if it provides at least the same benefits and conditions.
  • Michigan does not have a general private-employer disability-insurance registration in the public source set reviewed here, but the Earned Sick Time Act is a live branch that took effect February 21, 2025.

4. Exemption certificate if applicable

Michigan public workers' compensation guidance says compliance may be achieved by purchasing insurance, self-insuring, or properly executing an exclusion form.

  • Michigan public workers' compensation guidance says compliance may be achieved by purchasing insurance, self-insuring, or properly executing an exclusion form.
  • This packet did **not** verify the exact exclusion form identifier for every owner-officer scenario, so treat that owner-exemption paperwork branch as fact-specific.

Insurance reality

Etsy's public protection language is not a substitute for business insurance.

  • Etsy's public protection language is not a substitute for business insurance.
  • Etsy's Purchase Protection program may cover certain qualifying buyer refunds up to $250, but Etsy says the program is not an insurance policy, warranty, or guarantee.
  • Etsy Help recommends shipping insurance for higher-value orders, and commercial general liability or product liability coverage becomes more important as order volume and product risk increase.
  • Etsy's current public help says Purchase Protection updates begin on May 7, 2026, so re-check the live help and legal-policy pages if your launch is on or after that date.
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 entity or DBA setup.
  • Get EIN if applicable.
  • Open bank account.
  • Register for state tax permits that apply.
  • Check local permits.
  • Complete platform verification.

Before first live launch

  • Finish the platform operations branch.
  • Confirm category or product eligibility.
  • Build accurate listings, store pages, or policies.
  • Complete fulfillment or shipping setup.

Monthly

  • Reconcile payouts, fees, refunds, and reimbursements.
  • Review cash reserves for taxes.
  • Review margins, inventory age, or shipping performance.
  • Check account health, store errors, or suppressed listings.

Quarterly

  • File Michigan sales-tax returns if the assigned filing cadence is quarterly.
  • Review estimated-tax reserves for federal and Michigan income-tax exposure if the business is profitable.

Annual or periodic

  • File the Michigan LLC Annual Statement by February 15 if you formed an LLC.
  • File the annual Michigan sales-tax return by February 28 if the sales-tax branch applies.
  • Re-check Detroit or other local permit, zoning, or city-tax renewal obligations if the business operates there.
  • Re-check general liability, product liability, and shipping-insurance needs before scaling order volume or moving into riskier products.
Back to top Next: Common mistakes
Avoid these Common mistakes These are the repeated beginner errors called out in the research pack. Everyone 8 mistakes

Common Mistakes New Operators Make

  • Buying inventory or launching before checking legal and platform restrictions
  • Using a brand name without filing the right Michigan county assumed-name document or LARA Certificate of Assumed Name
  • Mixing personal and business money
  • Skipping tax registration because "the platform handles tax"
  • Launching with regulated products too early
  • Keeping weak supplier or compliance documentation
  • Missing state maintenance filings
  • Treating the platform as the compliance department

Practical first-launch recommendation

If you are testing casually with minimal risk, sole proprietor can work.

If you intend to build a real Etsy business, single-member LLC is usually the better long-term path.

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 50 rows

Source group

Statewide Start

State of Michigan

Michigan business start page

Form / portal Start-here resource hub
Fee None for the page
Timing First planning step
Who needs it Everyone

Statewide business portal that points founders to startup resources, permits, tax, and workforce links.

Open official link

Michigan Department of Licensing and Regulatory Affairs

LARA startup roadmap

Form / portal Startup roadmap
Fee None for the page
Timing Early in setup
Who needs it Founders choosing entity and filing order

Official LARA roadmap used here as the main Michigan startup guide.

Open official link

Michigan Department of Treasury

Treasury new-business tax hub

Form / portal MTO eRegistration and tax setup
Fee None for the page
Timing Early in setup
Who needs it Businesses registering for Michigan taxes

Treasury page for online new-business registration and tax-obligation guidance.

Open official link

Source group

Entity Choice and Formation

Michigan Department of Licensing and Regulatory Affairs

Compare business types

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

Official LARA guide used here for Michigan business-type and startup orientation.

Open official link

Michigan Department of Licensing and Regulatory Affairs

LLC naming rules

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

Public page says the name must be distinguishable and that a different operating name uses CSCL/CD-541.

Open official link

Michigan Department of Licensing and Regulatory Affairs

Default entity formation filing

Form / portal Articles of Organization
Fee $50
Timing At formation
Who needs it single-member LLC founders

Public form shows the current filing fee and the resident-agent / registered-office structure.

Open official link

Michigan Department of Licensing and Regulatory Affairs

Immediate post-filing requirement

Form / portal Internal operating agreement and EIN branch
Fee None identified
Timing Immediately after formation
Who needs it single-member LLC founders

No separate Michigan LLC initial report or publication requirement was identified in the official Michigan source set reused for this Etsy packet.

Open official link

Michigan Department of Licensing and Regulatory Affairs

Ongoing entity maintenance

Form / portal LLC Annual Statement
Fee $25
Timing February 15 each year after organization, except first year if formed after September 30
Who needs it single-member LLC founders

Public LARA page gives due-date rules and confirms the annual-statement requirement.

Open official link

Source group

Sole Proprietor and Local Name Filings

Michigan Department of Agriculture and Rural Development / Michigan state official PDF

Sole proprietor baseline

Form / portal County assumed-name filing guidance
Fee Varies by county
Timing Before using a name other than the owner's real name
Who needs it Sole proprietors and co-partnerships using an assumed name

Official Michigan guidance says sole proprietors and co-partners file assumed names with the county clerk, while corporations and LLCs file with the state.

Open official link

Michigan Department of Licensing and Regulatory Affairs

County or local clerk lookup

Form / portal County-clerk and name-search guidance
Fee Varies by county
Timing Before county filing
Who needs it Sole proprietors using a county assumed name

Official LARA brochure says assumed names of sole proprietorships are filed with the county clerk and points founders to county resources.

Open official link

Source group

Federal and State Tax Setup

IRS

EIN overview and online application

Form / portal Online EIN application
Fee Free
Timing Early in setup
Who needs it LLCs, employers, and sole proprietors wanting an EIN

IRS says form the state entity first if you are creating one.

Open official link

IRS

EIN paper form

Form / portal Form SS-4
Fee Free
Timing If not applying online
Who needs it Founders not using the online EIN flow

Public IRS page for paper, fax, or other non-online applications.

Open official link

Michigan Department of Treasury

Michigan tax registration

Form / portal MTO eRegistration or Form 518
Fee None for registration itself
Timing Before taxable retail sales, withholding, or other Michigan tax activity
Who needs it Businesses registering for Michigan taxes

Public Treasury FAQ says MTO eRegistration authenticates in 10-15 minutes; mailed Form 518 is listed at 4-6 weeks.

Open official link

Michigan Department of Treasury

Sales-tax license rules

Form / portal Sales-tax license
Fee None
Timing Before direct retail sales
Who needs it Retailers making direct sales to the final consumer

Public FAQ says Michigan sales-tax licenses have no fee, licenses are valid January through December, and wholesalers do not receive retail sales-tax licenses.

Open official link

Michigan Department of Treasury

Marketplace or platform tax rule

Form / portal Guidance page
Fee None for the page
Timing Before and after launch
Who needs it Marketplace sellers and direct sellers

Public FAQ says Michigan marketplace-facilitator collection began January 1, 2020, and marketplace-only sellers generally have no filing obligation for those facilitated sales.

Open official link

Michigan Department of Treasury

Resale or exemption certificate

Form / portal Form 3372
Fee None for the form
Timing After registration if applicable
Who needs it Inventory purchasers seeking resale treatment

Public form asks for a Michigan sales-tax license number on the For Resale at Retail line.

Open official link

Michigan Department of Treasury

Recordkeeping guidance

Form / portal Exemption and records guidance
Fee None for the page
Timing Ongoing
Who needs it Registered taxpayers and vendors

Public FAQ says sellers should rely on a valid exemption claim such as Form 3372, not just a tax-exempt number.

Open official link

Source group

Entity Tax Maintenance

IRS

Entity tax treatment

Form / portal Guidance page
Fee None for the page
Timing During planning and annually
Who needs it single-member LLC founders

Public IRS page covers default federal classification and election paths.

Open official link

Michigan Department of Treasury / Michigan Department of Licensing and Regulatory Affairs

Michigan-specific recurring entity tax filing or fee

Form / portal LLC Annual Statement remains the recurring public Michigan state maintenance item identified
Fee $25 annual statement fee
Timing Re-check before each filing year
Who needs it single-member LLC founders

No separate public Michigan LLC franchise-tax filing was identified in the official Michigan source set reused for this Etsy packet.

Open official link

Source group

Federal Reporting

FinCEN

BOI status

Form / portal BOI reporting-status guidance
Fee None
Timing Check before relying
Who needs it Everyone forming an entity

Public FinCEN guide says U.S.-created domestic entities are exempt from BOI reporting after the March 26, 2025 interim final rule.

Open official link

Source group

Employees, Payroll, and Insurance

Michigan Department of Treasury

Employer withholding registration

Form / portal MTO eRegistration or Form 518
Fee None for registration itself
Timing When first becoming an employer
Who needs it Businesses hiring employees

Michigan uses the same Treasury registration flow for sales, use, and withholding tax setup.

Open official link

Michigan Unemployment Insurance Agency

Unemployment account

Form / portal MiUI employer account
Fee None identified for setup
Timing When first becoming an employer
Who needs it Businesses hiring employees

Public UIA employer hub is the current start point for employer unemployment accounts and filings.

Open official link

Michigan Workers' Disability Compensation Agency

Workers' compensation coverage

Form / portal Coverage through insurance, self-insurance, or exclusion branch
Fee Premium-based or varies
Timing Before or at hiring when coverage thresholds are met
Who needs it Covered employers

Public page gives the 1 full-time worker for 13 weeks or 3 workers at one time coverage thresholds and explains who counts as an employee.

Open official link

Michigan Department of Labor and Economic Opportunity

Earned sick time / leave branch

Form / portal ESTA page, poster, and FAQ
Fee None for the page
Timing Before or at hiring and during policy setup
Who needs it Employers with Michigan employees

Public LEO page says the act took effect February 21, 2025 and links the required poster and FAQ.

Open official link

Michigan Department of Labor and Economic Opportunity

Earned sick time detail

Form / portal FAQ guidance
Fee None for the page
Timing During policy design
Who needs it Employers with Michigan employees

Public FAQ gives current accrual, use, carryover, notice, and small-business timing rules.

Open official link

Michigan Workers' Disability Compensation Agency

Exclusion form if applicable

Form / portal Exclusion-form branch
Fee Varies
Timing Only when eligible and needed
Who needs it Eligible owner or officer situations

Public page confirms exclusion forms exist, but this combo did not verify every exact owner-exemption form identifier.

Open official link

Source group

Platform Setup

Etsy Help

Platform registration guide

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

Etsy says sellers start at Etsy.com/sell, use a desktop browser to set up the shop, and complete required two-factor authentication. Etsy also says it does not require a business license, but sellers must follow applicable law.

Open official link

Etsy Help

Etsy Payments enrollment

Form / portal Etsy Payments
Fee No monthly standard-plan fee stated
Timing During onboarding
Who needs it All new Etsy shops

New shops enroll in Etsy Payments as part of opening the shop. Etsy says sellers must be in an eligible country to open a new shop.

Open official link

Etsy Help

Choose individual or business onboarding path

Form / portal Etsy Payments setup
Fee None stated on the page
Timing During onboarding
Who needs it Sellers deciding how to onboard

Etsy says sellers choose whether they are using Etsy Payments as an individual or a business for legal and tax purposes.

Open official link

Etsy Help

Identity verification

Form / portal Persona verification flow
Fee None stated on the page
Timing During onboarding
Who needs it Many new sellers

Etsy says it partners with Persona; the name on the ID must match the name on the bank account you shared.

Open official link

Etsy Help

Bank verification

Form / portal Plaid or manual verification
Fee None stated on the page
Timing Before opening and after bank changes
Who needs it U.S. sellers using Etsy Payments

Etsy says U.S. sellers verify through Plaid or manual test deposits. The page says sellers signing up must verify before opening the shop, and existing sellers can be suspended if they do not verify a changed bank account in time.

Open official link

Etsy Help

Seller-info confirmation overlay

Form / portal Seller-info confirmation flow
Fee None stated on the page
Timing When Etsy notifies the seller
Who needs it Some Etsy sellers

Etsy says missed legal deadlines can block payouts and place the shop into Etsy-initiated vacation mode until the required information is confirmed.

Open official link

Etsy Help

Platform pricing and fees

Form / portal Fees overview
Fee Set-up fee varies by location; listing fee $0.20; transaction fee 6.5%; Offsite Ads fee 12% or 15% depending on revenue tier
Timing At signup and later
Who needs it All Etsy sellers

Main public fee source. Re-check the live set-up-fee display during onboarding because Etsy says the amount varies by location.

Open official link

Etsy Help

Payment-processing fee detail

Form / portal Payment-processing fee table
Fee 3% + $0.25 for United States bank accounts as of April 28, 2026
Timing Ongoing
Who needs it Etsy Payments sellers

Etsy says the fee varies by country and is in addition to the transaction fee.

Open official link

Etsy Help

Optional subscription

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

Optional monthly subscription; not required for a normal U.S. shop launch.

Open official link

Etsy

Brand or IP program

Form / portal Reporting Portal
Fee None
Timing Optional
Who needs it Brand owners or rights holders

Etsy does not have an Amazon-style brand registry requirement for sellers. The reviewed public record supports Etsy's Reporting Portal and IP policy as the relevant optional enforcement tools instead.

Open official link

Source group

Fulfillment, Logistics, or Store Operations

Etsy Help

Listing creation

Form / portal Listing creation flow
Fee Listing fees apply
Timing Before launch and during operations
Who needs it Etsy sellers

Etsy says sellers must register as a seller before creating a listing and that the item must fit Etsy's handmade, vintage, or craft-supply categories.

Open official link

Etsy Help

Storefront setup

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

Etsy says missing storefront basics like a shop icon can affect visibility in search.

Open official link

Etsy Help

Return-policy setup

Form / portal Return-policy settings
Fee None for the settings page
Timing Before publishing physical listings
Who needs it Sellers of physical items

Etsy says sellers outside the EU must set a return policy whenever they edit or create a physical-item listing, even if the policy says no returns or exchanges are accepted.

Open official link

Etsy Help

Category, compliance, or product restriction guide

Form / portal Allowed-item guidance
Fee None for the page
Timing During sourcing or setup
Who needs it Etsy sellers

Items must be made, designed, handpicked, or sourced by the seller and still comply with the Prohibited Items Policy.

Open official link

Etsy Help

Reselling and production-partner limits

Form / portal Guidance pages
Fee None for the pages
Timing Before sourcing or outsourcing
Who needs it Sellers using suppliers or production partners

Public help says drop shipping is not allowed except for narrow craft-supply situations and production partners must be disclosed for original designs.

Open official link

Etsy Help

Shipping workflow

Form / portal Shipping workflow
Fee Varies by carrier or label choice
Timing During launch setup and order fulfillment
Who needs it Etsy sellers shipping physical items

Public help keeps the seller responsible for shipping performance even when third-party services are used.

Open official link

Etsy Help

Shipping labels

Form / portal Etsy shipping-label purchase flow
Fee Varies by carrier and service
Timing During order fulfillment
Who needs it Sellers using Etsy labels

Optional label tool; can affect shipping workflow and some performance programs.

Open official link

Etsy Help

Payment-account reserve

Form / portal Reserve explanation
Fee None for the page
Timing Ongoing
Who needs it Some Etsy sellers

Reserve timing and percentages vary by account; treat the existence of reserves as real but the exact reserve terms as account-specific.

Open official link

Etsy Help

Purchase Protection

Form / portal Purchase Protection help page
Fee None for the page
Timing When cases arise
Who needs it Etsy sellers

Etsy says qualifying orders up to $250 may be covered, but the program is not insurance and sellers still need accurate processing, shipping, and listing practices.

Open official link

Source group

Insurance Checkpoint

Etsy Help / Etsy legal policy

Platform protection and shipping-risk checkpoint

Form / portal Etsy Purchase Protection
Fee None for the program
Timing Before scaling physical-product sales
Who needs it Etsy operators selling physical goods

Public Etsy help says qualifying orders up to $250 may be refunded by Etsy instead of the seller. The help page also says updates begin on May 7, 2026, and public Etsy materials do not identify a universal seller liability-insurance threshold for standard shops.

Open official link

Etsy Help

Shipping-label insurance and claims

Form / portal Shipping-label coverage and claims guidance
Fee Varies by carrier and coverage level
Timing When buying labels
Who needs it Physical-product sellers using Etsy labels

Carrier coverage and claim paths vary. This is shipment-level protection, not business liability coverage.

Open official link

Source group

Detroit Branch

City of Detroit

City tax or permit warning

Form / portal Business-license and permit guide
Fee Varies by license
Timing If business is in Detroit
Who needs it Detroit-based businesses

City page says some, not all, business types need a Detroit business license and says to establish the business and check zoning first.

Open official link

City of Detroit

City zoning and occupancy branch

Form / portal Zoning permit, site-plan review, and occupancy path
Fee Varies
Timing Before opening a Detroit operating site
Who needs it Detroit-based businesses

City zoning page says after required inspections a Certificate of Occupancy is issued, and if a business license is also required, only then may the new use be opened and operated.

Open official link

City of Detroit

City tax and withholding branch

Form / portal City income-tax and withholding pages
Fee Varies by filing
Timing If business is in Detroit or has Detroit withholding obligations
Who needs it Detroit-based businesses

Use the city's current income-tax hub and re-check whether local business-income-tax or withholding filings apply to your fact pattern.

Open official link
Back to top