A state tax ID is a number issued to businesses operating in states that collect a personal income tax. This number is reported to employees on Internal Revenue Service (IRS) Form W-2 after the end of each tax year and to contractors on Form 1099. This number is issued separately from tax numbers used to report unemployment taxes, state sales taxes and corporate taxes. There are 9 states that do not issue state tax IDs: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington and Wyoming. In these states, the federal Employer Identification Number (FEIN) is used in lieu of the state tax ID.
Apply for your state tax ID using the forms on your state's web portal. Most states accept these forms online. If your state does not, you will find a mailing address on the Department of Revenue website. You will need to fill out basic information about your company including the business name, principal address, structure (corporation or Limited Liability Company), the name of the owner and partners (if any) and the estimated number of employees.
Check with your state Department of Revenue or Secretary of State to determine whether or not you will need to obtain a state tax ID. Most small businesses without employees are not required to apply for a state tax ID. Some states, such as California, have stricter regulations and may require fraternities, college clubs and homes with a classified household worker to have a state tax ID. The IRS has created a database of all state government links for your convenience.
File for a federal Employer Identification Number (FEIN) with the IRS if you do not already have one. The FEIN will be needed to obtain a state tax ID. You may receive a FEIN instantly by calling the IRS Business and Specialty Tax Line at (800) 829-4933 or by filing on the IRS EIN Assistant website. Find a link to this website in Resources.
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