More commonly called an employer identification number or a Federal tax ID number, a sales tax number identifies and tracks businesses to ensure they are adhering to their tax responsibilities. Although very business can choose to apply for an EIN, not every company needs one.
Which Businesses Need a Sales Tax Number?
Whether you need to apply for an EIN depends on how you register your business. If your small business is a sole proprietorship, you may not need a tax ID number. On the other hand, if your company withholds taxes on wages you pay to non-resident aliens, uses a Keogh plan or otherwise employs individuals, obtaining an EIN is a requirement. Tax ID numbers are also required if you sell firearms, alcohol or tobacco or if you deal in estates, trusts, nonprofits or several other types of organizations. Once you obtain your EIN, you will include it on tax documents and any W-2s, 401(k) information or other official documents you provide for your employees.
Why You Should Get a Sales Tax Number
Even if you do not need to apply for a Federal tax ID number, it is a good idea to do so. Having one helps to protect your personal assets, allows you to hire employees and obtain licenses and permits, and allows you to open bank accounts or credit accounts in your company name. The people you do business with will take your company more seriously if they can verify an EIN number for you.
How to Apply for a Sales Tax Number
Applying for an employer identification number is as simple as filling out an online application at IRS-EIN-Tax-ID. The application takes just a few minutes, is available 24 hours a day and is usually approved within a couple of days. To learn more about running your business, including information about an irrevocable trust tax ID number, get in touch with the professionals at IRS EIN Tax ID Filing Service.