How to Start a Jewelry Business: Licenses, Permits, and What It Actually Costs (2026 Guide)

1. Business structure and entity formation

Form your business entity before making your first sale. A jewelry business has multiple meaningful liability exposures: product liability from defective or injurious jewelry, customer disputes over custom pieces, inventory theft (precious metals and stones are a high-theft category), and for businesses that buy secondhand jewelry, potential fraud claims from sellers or legal complications if purchased items turn out to be stolen.

An LLC provides liability protection that keeps these exposures from reaching your personal assets. LLC formation costs $50–$500 depending on the state: Wyoming and New Mexico are inexpensive ($100 and $50 respectively) with no annual minimum taxes; California charges $70 to form but has an $800 annual minimum franchise tax. Most states fall in the $50–$150 range with annual report fees of $20–$100.

After forming the LLC, get an EIN from the IRS (free, 10 minutes at irs.gov/ein) and open a dedicated business checking account. Jewelry inventory — especially precious metals — should be tracked separately from personal assets for insurance, accounting, and tax purposes. A business account enables clean inventory accounting and simplifies year-end tax filings.

If you're selling under a brand name different from your legal business name (e.g., "Meridian Jewelry Studio, LLC" doing business as "Meridian"), file a DBA registration with your county clerk. Cost is $25–$75 and it enables you to open bank accounts, create signage, and market under your brand name.

2. Licenses and permits, step by step

Here's the standard permit sequence for a jewelry business. Address them in this order — entity formation before licenses, seller's permit before first sale.

3. FTC jewelry labeling and advertising rules

The FTC's Guides for the Jewelry, Precious Metals, and Pewter Industries (16 CFR Part 23) establish standards for how you describe and market jewelry. These are not aspirational guidelines — they're the basis for FTC enforcement actions and private civil suits. Here's what you must comply with:

• Gold and karat marking: Products described as "gold" must be at least 10 karat. Karat markings (10K, 14K, 18K, 24K) must accurately reflect gold content — 14K means 14/24 parts gold (58.3%). "Gold-filled" describes a base metal with a gold layer bonded by heat/pressure (1/20 or 5% gold by weight); "gold-plated" is a thinner layer (less than 1/20 gold by weight). "Gold tone," "gold color," or "goldtone" indicates no actual gold content. Using "gold" alone to describe gold-plated items is an FTC violation.
• Silver marking: "Sterling" or "Sterling Silver" means 92.5% silver (925). "Silver-filled" and "silver-plated" have specific meaning under the guides. Items should not be described as "silver" if they're silver-plated base metal without qualification.
• Diamond descriptions: Only genuine diamonds (natural or lab-grown, as long as disclosed) may be called "diamonds." Lab-grown diamonds must be identified as lab-created, lab-grown, synthetic, or cultured — they cannot be described simply as "diamonds" without qualification. Diamond simulants (cubic zirconia, moissanite, white sapphire) must be identified as simulants, not diamonds. Diamond quality grades (cut, color, clarity, carat) should be based on recognized grading standards, and claims of "flawless" or "perfect" must meet specific standards.
• Gemstone treatment disclosure: All significant gemstone treatments must be disclosed: heat treatment of sapphires, rubies, and tanzanite; fracture filling of rubies; irradiation of colored diamonds and topaz; diffusion treatment of sapphires. "Significant" means treatments that affect durability, care requirements, or value. Failure to disclose treatments is an FTC violation and can result in product returns, chargebacks, and enforcement action.
• Platinum marking: "Platinum" alone requires at least 95% platinum content. Alloys with 50–95% platinum must be identified with the specific alloy composition (e.g., "585Plat" for 58.5% platinum).

4. CPSC product safety requirements for jewelry

The Consumer Product Safety Commission (CPSC) sets mandatory safety standards for children's jewelry under the Consumer Product Safety Improvement Act (CPSIA). If any of your products are intended for children under 12, or could reasonably be used by children, these requirements apply:

• Lead limits: Children's jewelry must contain no more than 100 ppm lead in any surface coating and no more than 300 ppm total lead content. The CPSC has recalled numerous imported children's jewelry products for exceeding these limits. If you source components from overseas, you need certificates of compliance from suppliers showing lead testing results.
• Cadmium restrictions: Following a 2010 recall of cadmium-containing children's jewelry, the CPSC has issued guidance that manufacturers should avoid cadmium in children's jewelry. Some states (California, Connecticut) have specific cadmium limits for children's products.
• Small parts: Jewelry components small enough to fit entirely in a small parts cylinder test (designed to approximate the throats of children under 3) are prohibited in products intended for children under 3. Charms, beads, and findings that could become choking hazards must be assessed against this standard.
• Third-party testing: CPSIA requires that children's products subject to mandatory standards be tested by a CPSC-recognized third-party laboratory before first sale, with a Children's Product Certificate (CPC) issued based on the test results. This testing is mandatory — self-certification is not sufficient for children's products. Testing costs vary by product complexity: $50–$300 per SKU is typical for basic jewelry testing.
• Adult jewelry: Adult jewelry is not subject to mandatory CPSIA testing, but the CPSC can still take action on adult jewelry that presents an unreasonable risk of injury. Product liability insurance covers claims arising from these situations — maintain it regardless of whether you sell children's products.

5. What a jewelry business actually costs to start

Startup costs vary enormously based on business model: an Etsy-based handmade jewelry designer has very different capital requirements than a retail jeweler stocking precious metal and diamond inventory.

The home studio / online model is the most capital-efficient entry point. Most successful small jewelry businesses start here, building a client base and brand identity before considering retail. A retail jewelry store has inventory-intensive capital requirements — especially if stocking precious metal and diamond inventory — and should only be pursued with strong evidence of existing demand.

6. Selling online and at craft fairs: sales tax and marketplace compliance

The expansion of sales tax economic nexus laws since the 2018 Supreme Court decision in South Dakota v. Wayfair means that online jewelry sellers face multi-state compliance obligations once they reach sufficient sales volume.

• Economic nexus thresholds: Most states trigger sales tax nexus at $100,000 in sales or 200 transactions with customers in that state during a calendar year. Once you cross the threshold in any state, you must register for a seller's permit in that state, collect that state's sales tax on future sales, and file periodic returns. This applies whether you're selling through your own website, Etsy, Amazon, or any other channel.
• Marketplace facilitator rules: Etsy, Amazon, and other major marketplaces are required to collect and remit sales tax on behalf of sellers in most states under marketplace facilitator laws. This means for Etsy sales, Etsy typically handles the sales tax collection and remittance — you don't separately collect it. However, you may still need to register in some states as a formality, and for sales through your own website or at craft fairs, you handle sales tax directly. Verify with each platform what they collect and report on your behalf.
• Craft fair sales tax: When you sell at a craft fair in your home state, you collect your home state's sales tax. When you sell at a craft fair in another state, you typically need to register as a temporary vendor with that state's revenue department, collect their sales tax at the current rate, and file a return after the event. Most states have streamlined this process — many require a simple online registration and a post-event return. The fees are usually small ($0–$50), but skipping it creates a liability that can be assessed years later if the state audits vendor lists from fair organizers.
• Import compliance: If you source jewelry or components from overseas suppliers, be aware of customs requirements: formal entry thresholds (currently $800 for informal entry; above that requires formal Customs and Border Protection entry and payment of applicable duties), country of origin marking requirements, and for precious metals and stones, any applicable import restrictions (e.g., conflict diamond regulations under the Kimberley Process Certification Scheme, U.S. sanctions on certain origin countries).

7. State-specific requirements for jewelry businesses

A few states have requirements beyond the standard business license and seller's permit stack:

• California: California's precious metals dealer law (Business and Professions Code Section 21625 et seq.) requires dealers who buy or receive used personal property (including jewelry) from the public to obtain a local permit, maintain purchase records, and hold purchased items for a minimum of 30 days before resale. California's Proposition 65 requires a warning on products containing chemicals on the Prop 65 list — including lead, which is relevant for certain jewelry components. California does not tax most services but does tax physical goods including jewelry.
• New York: New York City requires a secondhand dealer license from the NYC Department of Consumer and Worker Protection (DCWP) for businesses that buy secondhand goods, including estate jewelry. The license requires fingerprinting, a background check, and payment of a $110 two-year fee. New York State requires a vendor's license (seller's permit) for all retail sales. NYC's sales tax rate (combined state + city) is 8.875% — the rate you collect from NYC customers.
• Texas: Texas has a metals dealer registration program through local law enforcement (sheriff or police department) for businesses that purchase precious metals and jewelry. Texas charges 8.25% sales tax on jewelry. Texas also has specific regulations on appraisal services — if you provide valuations or appraisals, ensure you're compliant with state appraisal regulation requirements.
• Florida: Florida's secondhand dealer law is administered at the county level. Miami-Dade, Broward, and Palm Beach counties each have their own registration and record-keeping requirements for precious metals dealers. Florida levies 6% state sales tax on jewelry plus applicable county surtaxes.
• Georgia: Georgia's Precious Metals and Gems Act requires dealers who buy precious metals and gems from the public to obtain a local business license from the county sheriff, maintain transaction records, and hold purchased items for 10 days. Violations are criminal misdemeanors in Georgia.

8. Where new jewelry businesses run into trouble

• Misrepresenting metal content in product listings. Calling gold-plated items "gold," describing silver-plated items as "silver," or listing the karat of a piece without verifying it — these are FTC Jewelry Guide violations that generate consumer complaints, chargebacks, and potential enforcement action. Always describe metal content accurately using the FTC's defined terminology.
• Failing to disclose gemstone treatments. Untreated sapphires command premium prices; heat-treated sapphires command lower prices. Fractured-fill rubies have durability issues that natural rubies don't. Not disclosing known treatments is a material omission that can support fraud claims and chargebacks. Document your treatment disclosure on every invoice and product listing.
• Not getting a precious metals dealer license before buying estate jewelry. Buying estate jewelry from individuals without the required dealer registration — even informally, even from family friends — can constitute operating an unlicensed precious metals dealership in states with dealer laws. The penalties include fines, forced return of purchased items, and in repeat cases, criminal charges.
• Ignoring craft fair sales tax in other states. Selling $3,000 in jewelry at a Colorado craft fair without collecting Colorado sales tax creates a $240 tax liability (at 8% combined rate), plus interest and penalties if assessed. Multiply this across 10 fairs in 10 states over 3 years and it becomes a significant audit exposure.
• Underinsuring inventory. A standard homeowner's or renter's policy has a $1,500–$2,500 sub-limit for jewelry — not a business inventory policy. If you have $10,000 in precious metal and stone inventory in a home studio, your homeowner's policy won't cover a burglary. Get a separate commercial property policy or rider that specifically covers jewelry inventory at its full value.
• Not vetting children's product compliance before selling. A single CPSC recall on children's jewelry — which requires notifying all customers, arranging returns, and potentially paying civil penalties — can cost more than a year of revenue. If you sell any jewelry intended for or appealing to children, verify lead and cadmium content through accredited testing before your first sale.

Frequently asked questions

Official Sources

• SBA: Apply for Licenses and Permits
• IRS: Employer Identification Number
• FTC: Guides for the Jewelry, Precious Metals, and Pewter Industries
• FTC: Jewelry Advertising Guides
• Jewelers Vigilance Committee: Industry Compliance
• CPSC: Consumer Product Safety Requirements
• SBA: Choose a Business Structure
• USPTO: Trademark Basics