A used bookshop’s paperwork comes down to six things: a business structure and name, an EIN where one is required, a sales tax permit, a way to record the boxes of books you buy, lease and consignment terms, and insurance. Most of it comes before the first shelf is stocked. The rules below use New York and Texas as labeled examples; your own state and city may differ on each point.
Choose a structure and register the name
A sole proprietorship does not require forming a separate legal entity, but the owner’s personal assets and the shop’s liabilities are not kept apart, and you may still need a DBA, tax registration and local permits. An LLC is filed with the state, usually through the Secretary of State, and generally shields personal assets from business claims. If the shop trades under another name, most states want a DBA registration, with details set by state, county and city.
Check whether you need an EIN
The IRS issues EINs for free and says not to pay for one. You need one if the shop has employees or owes certain employment or excise taxes, and the IRS lists partnerships and corporations among the entities that need one. A single-member LLC that the IRS treats as a disregarded entity, with no employees and no excise tax liability, is not required to have an EIN and uses the owner’s name and taxpayer number for federal purposes.
The same goes for a sole proprietor with no staff. Even then, a bank may ask for an EIN to open a business account, and the IRS notes that an EIN can be requested for banking or state tax reasons, so ask your bank and state tax agency before deciding.
Sales tax permit and resale certificate
The permit comes from your state tax agency and is what lets the shop collect sales tax. In New York, the Tax Department says anyone who sells taxable property must register before beginning business, even when the sales happen from a home or only once a year. Texas, as another example, handles the application through the Comptroller and tells applicants to allow two to three weeks for the permit to arrive, so the application belongs well ahead of opening. Whether your state taxes book sales, and how it treats used goods, is a question for that agency.
A resale certificate is a separate document. In Texas, Form 01-339 lets a buyer purchase tax-free an item it will resell if the seller accepts a properly completed form, and the seller keeps it for four years. A permit number does not replace the certificate. It matters when you buy new stock from a distributor. A one-time private sale, such as a neighbor selling you a box of paperbacks, may be a different situation. A seller who does not charge tax is not enough to tell how the sale is treated, so ask your state tax agency how it handles purchases of used goods from private individuals.
Buying collections with a simple purchase receipt
Most of a used shop’s stock arrives in boxes from people clearing shelves or an estate. A one-page receipt records what the shop paid and to whom, and gives your accountant a cost figure for the lot. Some cities and states regulate secondhand dealers, so ask the city or county clerk where you open whether that applies to books and what records it expects.
Here is a hypothetical receipt, not a legal form:
PURCHASE RECEIPT
Date: October 12, 2026
Seller: [full name, address, phone]
Buyer: [shop name]
Items: approx. 240 mixed paperbacks and hardcovers, fiction and history, 6 boxes
Price paid: $180, cash
Seller states they own these books and are free to sell them.
Signed: ______ (seller) ______ (buyer)
Describing a mixed lot by count and category is a common bookkeeping approach, but local secondhand dealer rules may ask for more detail, such as an itemized list or the seller’s ID. A single valuable item is worth its own line with title and edition. If some boxes include British printings, remember that US and UK editions of one title carry different ISBNs, where an ISBN is available at all, as this guide to buying books from overseas explains. Older books may not have one, so note the edition whenever it affects price.
Put the lease and consignment terms on paper
A commercial lease for a bookshop needs more than a rent figure. Check the length and any renewal option, how the rent rises, which costs beyond rent fall on the tenant, and whether the use clause covers readings or online order packing. Ask what load the floor is rated for before ordering shelving, because stocked bookcases are heavy. Zoning ordinances can restrict some kinds of businesses, so confirm with the city planning office that a shop is allowed at the address.
Consignment, where local authors or collectors leave books for the shop to sell, needs its own short agreement. Write down the percentage split, how long the shop holds the items, who bears loss or damage, when payouts are made, and what happens to books still unsold after the agreed date. Ask your state tax agency how sales of consigned items are taxed.
A lease or consignment agreement is worth having a local attorney read before you sign. Add a third agreement if you hire outside help, such as a carpenter to build the shelving or a freelancer to set up the shop’s website. Before work starts, put the scope, price and payment dates, deadline, ownership of the finished fixtures or site, and the contractor’s proof of insurance in writing. ConsumerShield, an online legal information platform, offers legal forms for small businesses, including an independent contractor agreement you can customize.
Insurance before the shelves fill
General liability coverage responds to a customer’s injury, such as a fall over a stack or a shelf coming loose. Property coverage is for the stock, shelving and equipment, but what it pays depends on the cause of the damage and the policy’s exclusions, so ask which causes of loss, such as fire, a burst pipe or flooding, are covered. Ask the agent how stock is valued, at cost or at retail, and whether consigned books sitting in your shop are covered, since they are in the building but not on your books.
The lease may also spell out what coverage the tenant must carry and who has to be named on the policy. Bring that section and your consignment terms to the agent and ask how the policy meets each.
