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Business ID ? / Federal ID? / State ID?

As a sole proprietor, you can use your Social Security number as your Federal ID number for most purposes.

However, if you EITHER...

  1. Will pay employees to work in your business, or
  2. Will be subject to Federal excise taxes due to the nature of your business, you need to submit a Form SS-4 and obtain an Employer Identification Number which will be used for those purposes.

If you will be selling items then you will also need to obtain a Sales Tax License. Most states also have what is called a Use Tax which is the flip side of a sale tax.  If you buy an item to use in your business without paying  sales tax (wholesale) you are still required to pay a Use Tax on the item.  In most states Sales Tax Rate = Use Tax Rate.  WARNING - Sales/Use Taxes are the largest source of State revenues for many states so they are very serious on collecting this tax.



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We do not offer legal advice. All information provided on this website is for informational purposes only and is not a substitute for proper legal advice. If you have legal questions, we recommend that you seek the advice of legal professionals.

Tax Disclaimer: To ensure compliance with IRS Rules, any U.S. federal tax advice provided in this communication is not intended or written to be used, and it cannot be used by the recipient or any other taxpayer (i) for the purpose of avoiding tax penalties that may be imposed on the recipient or any other taxpayer under the Internal Revenue Code, or (ii) in promoting, marketing or recommending to another party a partnership or other entity, investment plan, arrangement or other transaction addressed herein.

Copyright 2017 Wink Tax Services / Wink Inc.
Last modified: January 30, 2017