Do I Need a Tax ID Number to Sell on Amazon or Etsy?

Key Takeaways

• Selling on Amazon or Etsy does not automatically require a Tax ID, but your business setup, hiring plans, and tax registrations often do.
• Most marketplace sellers need an EIN if they form an LLC/corporation, hire employees, or choose certain tax elections; many sole proprietors can start with an SSN.
• Sales tax obligations may still apply even when the marketplace collects and remits in many states; permits may be required for direct sales or specific situations.
• Having a Tax ID helps separate business and personal information, streamline onboarding, and support wholesale, banking, and tax reporting needs.

Selling online through Amazon or Etsy can look simple—list products, make sales, get paid. The compliance side can be less obvious. Whether you “need a Tax ID number” depends on what kind of Tax ID you mean (EIN vs. state tax account), how your business is structured, and what activities you perform beyond marketplace sales.

What “Tax ID Number” Means for Amazon and Etsy Sellers

Federal Tax ID (EIN)

An Employer Identification Number (EIN) is a federal tax ID issued to a business. It’s commonly used to open a business bank account, file certain business tax returns, issue 1099s to contractors, and run payroll. Many sellers use an EIN to avoid sharing a Social Security Number with platforms, vendors, or banks.

State Tax IDs (Sales Tax Permit, Withholding, and Other Accounts)

Separately from an EIN, states may require tax accounts such as:

• Sales tax permit (often called a seller’s permit, sales tax ID, or sales tax number)
• Withholding tax account (if you have employees in a state)
• Business income/franchise tax registrations (varies by state and entity type)

Marketplace Facilitator Rules (Why This Gets Confusing)

In many states, Amazon and Etsy act as “marketplace facilitators,” meaning the platform may collect and remit sales tax on certain marketplace transactions. That can reduce your sales tax filing burden for those marketplace sales, but it does not eliminate all state requirements in every situation (for example, when you also sell through your own website, at events, or make other taxable sales the marketplace does not handle).

Ready to get started? Apply online now.

When You Need an EIN to Sell on Amazon or Etsy

You formed an LLC, corporation, or partnership

If you operate as a separate legal entity, an EIN is typically required for tax administration and business operations. Common triggers include:

• Multi-member LLC (treated like a partnership by default)
• Corporation (including S-corporation status)
• Partnership

You hire employees (even one)

Hiring employees generally requires an EIN. It also typically requires state unemployment and withholding tax accounts in the states where employees work.

You want to keep your SSN off business documents

Many sole proprietors who could use an SSN still choose an EIN for practical reasons, such as marketplace onboarding, vendor forms, and wholesale applications.

You need to issue 1099s to contractors

If you pay certain non-employees for services, you may need to issue Form 1099-NEC when payments reach $600 or more in a calendar year to a qualifying recipient. Having an EIN simplifies W-9 collection and vendor management for your business.

When You Might Not Need an EIN (Yet)

Sole proprietor with no employees and limited reporting needs

If you operate as a sole proprietor, have no employees, and are not required to file business returns that require an EIN, you may be able to start selling using your SSN for tax reporting.

You only sell through a marketplace that handles sales tax for those transactions

Even if a marketplace collects and remits sales tax on your marketplace orders in many states, you may still need an EIN for other reasons (entity type, payroll, banking). Sales tax handling is not the same as federal business identification.

Sales Tax Reality for Marketplace Sellers

Marketplaces may collect sales tax, but permits can still matter

In many cases, Amazon or Etsy will calculate and collect sales tax from customers and remit it to states for marketplace sales. However, you may still need a sales tax permit if you:

• Sell the same products through your own site (Shopify, WooCommerce, etc.)
• Make in-person sales at pop-ups, markets, or trade shows
• Ship from or store inventory in a state that creates a registration requirement
• Have direct taxable sales in a state outside the marketplace

If you are expanding into state registrations, it can help to review examples like a Tennessee sales tax number or an Illinois sales tax number to understand what information is typically requested during registration.

Need help registering? Start your application.

Common Amazon and Etsy Tax Forms and What They Mean

Form W-9 for U.S. sellers

U.S. sellers are commonly asked for a Form W-9 to confirm the name and taxpayer identification number associated with the account. Depending on your setup, that taxpayer ID could be an SSN or an EIN.

Form 1099-K reporting thresholds

Marketplaces may issue Form 1099-K to report payment card and third-party network transactions. The exact threshold can change based on applicable rules, but many business owners plan for reporting at $600 in gross payments for the year. Keeping clean records is important because 1099-K reports gross amounts, not profit.

At-a-Glance: Which Tax IDs You May Need

How to Decide What You Need (Practical Checklist)

Step 1: Confirm your business structure

Write down whether you’re a sole proprietor, single-member LLC, multi-member LLC, partnership, or corporation. Entity type is one of the fastest ways to determine whether an EIN is necessary.

Step 2: Map where you sell and where inventory is located

Track:

• Your home state (where you operate)
• States where you store inventory (including fulfillment warehouses)
• States where you make direct sales outside the marketplace

Step 3: Identify whether you have employees or plan to hire

If hiring is on your roadmap within the next 30–90 days, it’s usually better to obtain an EIN and set up payroll-related registrations before the first paycheck is issued.

Get your permit today — begin here.

Frequently Asked Questions

Do I need an EIN to sell on Amazon as a sole proprietor?

Not always. A sole proprietor with no employees can often use an SSN for tax reporting and a W-9. You typically need an EIN if you hire employees, form a partnership/corporation, or want an EIN for business banking and vendor paperwork.

Do I need an EIN to sell on Etsy?

Not automatically. If you operate as an LLC/corporation, plan to hire, or need to issue 1099-NEC forms for services totaling $600 or more to a contractor in a year, an EIN is commonly needed or strongly recommended.

Will Amazon or Etsy collect and remit sales tax for me?

Often, yes for marketplace transactions in many states under marketplace facilitator rules. However, if you also sell through your own website or in person, you may still need a sales tax permit and must collect/remit sales tax on those non-marketplace sales where required.

If the marketplace collects sales tax, do I still need a sales tax permit?

Sometimes. Many sellers still register when they have direct taxable sales, operate a separate e-commerce site