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Federal ID Number VS State Tax ID Number

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Don’t waste your money; before you consider paying for a third party service for a Federal Employer Id Number (most run over $100) and running the risk of releasing your personal information to some …

Don’t waste your money; before you consider paying for a third party service for a Federal Employer Id Number (most run over $100) and running the risk of releasing your personal information to some unknown website probably oversees. Let me show you a better way to get a Tax Id Number. And don’t waste your valuable time searching all over the internet by yourself to figure out the best way to apply for an EIN number. The homework and research has already been done for you. All you have to do is go to http://www.IrsEin.org and watch a free step by step video and learn how to get your own IRS number for your business within the next 15 minutes.

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  • 1. Federal ID Number VS State Tax ID Number FEDERAL TAX ID NEWS Volume - 16, Issue – 6 IRSEIN.org
  • 2. Aspiring business owners often ask this question “What is the difference between a Federal ID Number and a State Tax ID number?” First let’s know what a State Tax ID number is. The State’s Tax ID number is also known as:  Reseller permit  Sales tax vendor id number  Sales tax registration  Reseller tax id  Reseller certificate  Certificate of authority  Sales tax Identification number  State tax ID number The sales tax is applied to physical goods like food, clothing, cars, appliances, furniture, and other goods. Intangible goods are excluded from tax. That means services like landscaping, tuition fees, real estate investment, even attorney fees and other purchases made by families with higher income are not necessarily in need to have the state tax. A business or a seller will be charge of tax if it is a NEXUS. Nexus or the physical presence is created when the business or the company has a temporary or permanent presence of people and/or property in a given location. Be aware that different states or locality have different definitions or scopes of their nexus thus leading to problems for business about tax operations There is also a tax exemption certificate which is issued by the state. This certificate allows your company to collect the required tax and use it to issue appropriate reseller permit exemptions certificates and even the resale certificates that are used for purchasing inventory. On the other hand, the Federal ID Number works differently. It is also known as the Employer Identification Number (EIN) that works like a social security number for businesses. Here is some of the factual information that will give you a brief description of the federal ID number: 1. The federal ID number is issued by the Internal Revenue Service solely to a particular business entity. 2. The EIN or federal Id Number is used when you will be hiring employees. 3. The federal ID number is used to file business taxes.
  • 3. This nine digit number lets you process tax returns, open bank accounts and secure a business permit. This serves as identification for your business. Any business firm who registers as a limited liability company, partnership, corporation or a joint venture must get an EIN. No matter how small a business is with one or more part-time or full-time employees; and if you pay contractors or any services valued at more than $600 a year, you need to get your own employer number. In conclusion, both the federal ID number and State tax ID number are two different things that you need to process. Both are working differently for special purposes. Are you ready to get an EIN number for your business? Don’t waste your money; before you consider paying for a third party service for a Federal Employer Id Number (most run over $100) and running the risk of releasing your personal information to some unknown website probably oversees. Let me show you a better way to get a Tax Id Number. And don’t waste your valuable time searching all over the internet by yourself to figure out the best way to apply for an EIN number. The homework and research has already been done for you. All you have to do is go to http://www.IrsEin.org and watch a free step by step video and learn how to get your own IRS number for your business within the next 15 minutes. Other Related Articles :  How To Get An Ein / Tax Id Number (.pdf)  Federal Tax Number- Do You Need One?  Where to Get Federal Tax and State ID Number