What is an Employer Identification Number (EIN)?
Your state tax ID and federal tax ID numbers — also known as an Employer Identification Number (EIN) — work like a personal social security number, but for your business. They let your small business pay state and federal taxes. You also need EIN to get reseller permits and get tax exempted in US states for your Amazon/Walmart business.
Just as individual U.S. citizens have unique social security numbers to identify themselves, U.S. businesses are issued employer identification numbers, commonly referred to as EINs. EINs are unique, nine-digit numbers issued by the Internal Revenue Service (IRS) and primarily used to report employment taxes. They may also be called federal tax ID numbers. Like social security numbers, they never expire and are never reissued to another business.
Businesses need an EIN to pay their federal taxes online, to file their annual tax return, and to issue payroll and tax documents to suppliers. The number has less to do with employees and more to do with taxation, so if your business pays taxes (and who doesn’t), you need an EIN.
Source: Shopify and IRS.gov
Ready to be a get your EIN? Head over to our ‘Apply Now’ section, send us your LLC documents and our team will reach out to you! EIN typically takes 24 hours for US citizens/residents with SSN and up to 8 weeks for non-residents.
Doing business in the USA as a wholesaler or retailer?
Let’s discuss a reseller license and what it is.
A Reseller License or Certificate is a document that enables you to buy items in bulk or wholesale without having to pay for the local sales tax. Instead, you resell these items and your customers pay the tax when they buy your products. You collect these taxes and forward it to the state where your company is based.
For example: You sell an item on Amazon/Walmart for $50 and you buy it for $40 which means you keep $10 as a profit. With reseller permit, your supplier/retailer won’t charge you the tax (since the item is for resale) and instead of $40 you might only pay $30, which means more profit.
Generally, states require businesses to submit these collected taxes quarterly or monthly.
A Reseller License is also referred to as: Reseller Permit, Reseller Certificate, Certificate of Authority, Resale Certificate, Seller’s Permit, Sales Tax Vendor ID Number, Reseller Tax ID, State Tax ID Number, Tax Registration Certificate and Sales Tax Exemption Certificate.
This permit can be obtained from the state’s department of revenue or from the state’s Tax Department. Once obtained, you may show or give this document to your vendor or supplier (upload it on Amazon, Walmart, or other retailers) when buying goods or materials for resale so that it won’t have to charge you sales tax.
Note: you would need a valid EIN to get a reseller permit. Don’t have an EIN? head to our EIN section and apply for one.
Ready to be a get your reseller permit? Head over to our ‘Apply Now’ section, tell us some more details (EIN, LLC name, Address) and our team will reach out to you!