Most cities require a Business License, although there are some who do not. I was surprised to find out that most cities have adapted to the internet age and require a business license for internet business transactions. The fees are minimal; generally about $25 for the first year with following years’ fees based on the income generated during each year’s business period.
If you don’t contact your city to tell them about your business, it’s likely that they’ll come looking for you as they generally monitor (or are notified by the State) of registrations for Tax ID numbers since a portion of all tax collected will be sent to the municipality in which you live.
When you contact (or are contacted by) the city to register for a business license, be sure to tell them you are a internet based business. Generally there’ll be some follow-up questions to help them determine your actual place of business, if you will be stocking inventory, and any traffic concerns that may relate to zoning. If you are working with a drop shipper, the process is pretty painless, however, if you are warehousing inventory it may be necessary to have an inspection of your facility to determine if you are meeting all building, zoning and fire codes. The latter is rarely necessary for internet operated businesses, but be prepared to satisfy the needs of your community’s leader’s with a smile on your face should it be necessary.