Should I register my Etsy shop as a 'business' or an 'individual' if I have a Texas 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 Texas Certificate of Formation. A single-member Texas 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 Texas. Can I still use a Texas LLC on Etsy?

Etsy does not check where you live, only that the Texas entity is validly registered and that the details you enter match Texas'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 Texas's $300. Forming in Texas while working somewhere else usually means paying both states, not one.

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

Not for your Etsy orders themselves. Texas charges a 6.25% 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 Texas registration once you also sell off-marketplace and either have physical presence in Texas or cross its remote-seller threshold of $500,000 in sales in the previous 12-month period.

Etsy asks for "Articles of Organization". Texas gave me a Certificate of Formation. Which do I upload?

Upload the Certificate of Formation. Texas does not issue a document called Articles of Organization; the Certificate of Formation is the same instrument under the name Texas uses for it, and it is what Etsy means by a formation or business-registration document.

Marketplace Verification

How to pass Etsy verification with a Texas LLC

What Etsy asks for at signup, and which Texas 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 Texas LLC is generally eligible for Etsy verification — you will need to provide your Certificate of Formation, EIN, beneficial-owner ID, and a valid US business address. Nothing about forming in Texas 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 Texas LLC registered as a business (not a disregarded entity), Etsy collects the entity name as it appears on your Certificate of Formation, 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 Texas the entity behind that check is an LLC created by filing a Certificate of Formation, which costs $300. Texas 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 Texas 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.

Texas has 210,043 solo retail trade businesses with no employees, averaging $63,323 in annual receipts (U.S. Census Bureau, Nonemployer Statistics (NES), 2023).

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

What Etsy requires, and how a Texas LLC meets each

Requirement	How your Texas LLC satisfies it
LLC entity name verified against IRS	Use the exact LLC name as Texas recorded it on your Certificate of Formation; 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 Texas.
Taxpayer information and IRS verification	Complete the tax interview. A Texas LLC owned by US persons typically submits a W-9 using its EIN; non-US owners of a disregarded-entity Texas 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 Texas filings. Texas 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 Texas Certificate of Formation.

Texas-specific things to watch

Texas 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. (The Certificate of Formation (Form 205) must name at least one governing person (member or manager), a public record; the annual Public Information Report also discloses management.)
Texas issues a Certificate of Formation rather than "Articles of Organization." When Etsy asks for "formation documents," upload your Certificate of Formation.
Budget for Texas's ongoing LLC costs before projecting your Etsy margins: Texas imposes a franchise tax; LLCs under the no-tax-due threshold ($2,650,000 total revenue for 2026-27 reports) owe $0 but must still file an annual Public Information Report.
Etsy payouts flow through to your personal return, and Texas won't tax them under a personal income tax: Texas levies no personal income tax.

Texas sales tax & nexus rules for Etsy sellers

Texas charges a 6.25% state sales-tax rate, and like every state with a sales tax it has a marketplace-facilitator law — Etsy collects and remits Texas sales tax on your marketplace orders for you. You still need your own Texas registration if you also sell off-marketplace (your own site, invoices) and either have physical presence in Texas — an in-state location, inventory, or employees — or cross the state's remote-seller economic-nexus threshold of $500,000 in sales in the previous 12-month period.

Texas has one of the highest nexus thresholds at $500,000, giving smaller remote sellers significant breathing room. There is no transaction count. Texas's 6.25% state rate can be supplemented by up to 2% in local taxes (many cities are at the 8.25% cap). Texas broadly taxes SaaS and digital services. Register through the Texas Comptroller of Public Accounts.

How to verify your Texas LLC on Etsy

LLC entity name verified against IRS. Use the exact LLC name as Texas recorded it on your Certificate of Formation; 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 Texas.
Taxpayer information and IRS verification. Complete the tax interview. A Texas LLC owned by US persons typically submits a W-9 using its EIN; non-US owners of a disregarded-entity Texas 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 Texas filings. Texas 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 Texas Certificate of Formation.

Non-US founders with Texas LLCs

Non-US sellers can use Etsy Payments in supported countries, but a Texas LLC's seller account must be linked to a US bank account or an eligible payment method. Non-US beneficial owners of a Texas 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 Texas Certificate of Formation. A single-member Texas 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.
: Texas charges $300 to file a Certificate of Formation, and that is the state's fee to create the LLC. Texas 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 Texas's ongoing obligations are the real cost of getting verified as a Texas entity.
: Etsy does not check where you live, only that the Texas entity is validly registered and that the details you enter match Texas'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 Texas's $300. Forming in Texas while working somewhere else usually means paying both states, not one.
: Not for your Etsy orders themselves. Texas charges a 6.25% 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 Texas registration once you also sell off-marketplace and either have physical presence in Texas or cross its remote-seller threshold of $500,000 in sales in the previous 12-month period.
: Upload the Certificate of Formation. Texas does not issue a document called Articles of Organization; the Certificate of Formation is the same instrument under the name Texas uses for it, and it is what Etsy means by a formation or business-registration document.