Should I register my Etsy shop as a 'business' or an 'individual' if I have a Tennessee LLC?

If you have an EIN and file taxes as a business entity (not a disregarded entity), register as a business. Etsy then verifies the entity name and EIN against IRS records, so the name has to match your Tennessee Articles of Organization. A single-member Tennessee LLC taxed as a disregarded entity can register as an individual and provide an SSN or ITIN.

What happens if I do not complete Etsy's seller verification?

Etsy withholds payouts until verification is complete, whichever state the shop's LLC comes from. If you miss the deadline shown in your Shop Manager dashboard, you have 90 days before the shop may be closed.

I do not live in Tennessee. Can I still use a Tennessee LLC on Etsy?

Etsy does not check where you live, only that the Tennessee entity is validly registered and that the details you enter match Tennessee's record. The catch is not Etsy, it is the state you actually operate from: states require an out-of-state LLC to register as a foreign LLC before it transacts business there, which is a second filing and a second fee on top of Tennessee's $300. Forming in Tennessee while working somewhere else usually means paying both states, not one.

Do I need a Tennessee sales-tax permit before my first sale through Etsy?

Not for your Etsy orders themselves. Tennessee charges a 7% state rate and, like every sales-tax state, has a marketplace-facilitator law that makes Etsy collect and remit it for you. You need your own Tennessee registration once you also sell off-marketplace and either have physical presence in Tennessee or cross its remote-seller threshold of $100,000 in sales in the previous 12-month period.

Marketplace Verification

How to pass Etsy verification with a Tennessee LLC

What Etsy asks for at signup, and which Tennessee LLC documents satisfy each requirement.

By Edmond Hui · Last updated: August 4, 2026

Edmond Hui · Founder, MyStateLLC

Edmond Hui is a software engineer and serial entrepreneur based in New York who has founded multiple online businesses across e-commerce, media, and information publishing. Before transitioning into tech, he spent years as a commercial real estate professional closing deals totaling over 100,000 square feet, giving him firsthand experience with business formation and entity structuring. He built MyStateLLC to provide the free, state-specific LLC guidance he wished existed when forming his own companies.

A Tennessee LLC is generally eligible for Etsy verification — you will need to provide your Articles of Organization, EIN, beneficial-owner ID, and a valid US business address. Nothing about forming in Tennessee blocks approval, and nothing about it guarantees approval either: the final call is Etsy's.

Etsy requires sellers using Etsy Payments to complete identity and tax verification before receiving payouts. For a Tennessee LLC registered as a business (not a disregarded entity), Etsy collects the entity name as it appears on your Articles of Organization, the legal address, the EIN or other taxpayer number, and verifies this information against the IRS database. Etsy also requires a government photo ID and selfie via its identity-verification partner Persona, plus a bank account linked to receive Etsy Payments disbursements.

In Tennessee the entity behind that check is an LLC created by filing Articles of Organization, which costs $300. Tennessee does not publish a processing time for LLC filings, so treat state approval as the open-ended step in your timeline rather than the Etsy review. Because Tennessee names a member or manager on a routine public filing, the owner name Etsy asks you to confirm is already a matter of public record.

Tennessee has 45,814 solo retail trade businesses with no employees, averaging $72,015 in annual receipts (U.S. Census Bureau, Nonemployer Statistics (NES), 2023).

Not legal advice: Verification requirements change, and so do Tennessee's filing fees and forms. Confirm current platform rules with Etsy, and current filing rules with the Tennessee filing office, before you file. Etsy's requirements were last reviewed 2026-07-21, and Tennessee's figures on this page come from its own published schedule.

What Etsy requires, and how a Tennessee LLC meets each

Requirement	How your Tennessee LLC satisfies it
LLC entity name verified against IRS	Use the exact LLC name as Tennessee recorded it on your Articles of Organization; it must match your bank account holder name.
Employer Identification Number (EIN)	Provide your federal EIN (free from the IRS; non-US founders without an SSN must apply via Form SS-4 by fax or phone rather than the online tool) — independent of Tennessee.
Taxpayer information and IRS verification	Complete the tax interview. A Tennessee LLC owned by US persons typically submits a W-9 using its EIN; non-US owners of a disregarded-entity Tennessee LLC generally use a W-8 form instead.
Government photo ID and selfie (via Persona)	Provide a government ID for each beneficial owner named in your Tennessee filings. Tennessee names a member or manager on a routine public filing, so at least one name already matches state records.
Bank account for Etsy Payments disbursements	Link a US business bank account opened with your EIN and your Tennessee Articles of Organization.

Tennessee-specific things to watch

Tennessee names a member or manager on a routine public filing, so Etsy's beneficial-owner check will line up with public state records — you still upload a government ID for each owner. (Tennessee's annual report (a per-member filing) discloses the LLC's members/managers.)
Budget for Tennessee's ongoing LLC costs before projecting your Etsy margins: Tennessee imposes a franchise & excise tax on LLCs: $100 minimum franchise tax plus 6.5% excise tax on net earnings.
Etsy payouts flow through to your personal return, and Tennessee won't tax them under a personal income tax: No personal income tax on wages; note the franchise & excise tax below.

Tennessee sales tax & nexus rules for Etsy sellers

Tennessee charges a 7% state sales-tax rate, and like every state with a sales tax it has a marketplace-facilitator law — Etsy collects and remits Tennessee sales tax on your marketplace orders for you. You still need your own Tennessee registration if you also sell off-marketplace (your own site, invoices) and either have physical presence in Tennessee — an in-state location, inventory, or employees — or cross the state's remote-seller economic-nexus threshold of $100,000 in sales in the previous 12-month period.

Tennessee has no transaction count threshold. Tennessee's 7% state rate is one of the highest in the nation, and combined with local rates can reach 9.75% in some areas (Nashville-area rate is 9.25%). Tennessee does not impose a state income tax on wages, making it a popular business state. Digital goods and SaaS are taxable in Tennessee. Register through Tennessee Taxpayer Access Point (TNTAP).

How to verify your Tennessee LLC on Etsy

LLC entity name verified against IRS. Use the exact LLC name as Tennessee recorded it on your Articles of Organization; it must match your bank account holder name.
Employer Identification Number (EIN). Provide your federal EIN (free from the IRS; non-US founders without an SSN must apply via Form SS-4 by fax or phone rather than the online tool) — independent of Tennessee.
Taxpayer information and IRS verification. Complete the tax interview. A Tennessee LLC owned by US persons typically submits a W-9 using its EIN; non-US owners of a disregarded-entity Tennessee LLC generally use a W-8 form instead.
Government photo ID and selfie (via Persona). Provide a government ID for each beneficial owner named in your Tennessee filings. Tennessee names a member or manager on a routine public filing, so at least one name already matches state records.
Bank account for Etsy Payments disbursements. Link a US business bank account opened with your EIN and your Tennessee Articles of Organization.

Non-US founders with Tennessee LLCs

Non-US sellers can use Etsy Payments in supported countries, but a Tennessee LLC's seller account must be linked to a US bank account or an eligible payment method. Non-US beneficial owners of a Tennessee LLC must still complete identity verification via Persona with a valid government ID.

Frequently Asked Questions

: If you have an EIN and file taxes as a business entity (not a disregarded entity), register as a business. Etsy then verifies the entity name and EIN against IRS records, so the name has to match your Tennessee Articles of Organization. A single-member Tennessee LLC taxed as a disregarded entity can register as an individual and provide an SSN or ITIN.
: Etsy withholds payouts until verification is complete, whichever state the shop's LLC comes from. If you miss the deadline shown in your Shop Manager dashboard, you have 90 days before the shop may be closed.
: Tennessee charges $300 to file Articles of Organization, and that is the state's fee to create the LLC. Tennessee does not publish a processing time for LLC filings, so treat state approval as the open-ended step in your timeline rather than the Etsy review. Etsy charges nothing for verification itself, so the $300 filing fee and Tennessee's ongoing obligations are the real cost of getting verified as a Tennessee entity.
: Etsy does not check where you live, only that the Tennessee entity is validly registered and that the details you enter match Tennessee's record. The catch is not Etsy, it is the state you actually operate from: states require an out-of-state LLC to register as a foreign LLC before it transacts business there, which is a second filing and a second fee on top of Tennessee's $300. Forming in Tennessee while working somewhere else usually means paying both states, not one.
: Not for your Etsy orders themselves. Tennessee charges a 7% state rate and, like every sales-tax state, has a marketplace-facilitator law that makes Etsy collect and remit it for you. You need your own Tennessee registration once you also sell off-marketplace and either have physical presence in Tennessee or cross its remote-seller threshold of $100,000 in sales in the previous 12-month period.