# Do I need a Federal Tax ID Number?



## lasttuesday

I've noticed that a lot of wholesale vendors (most, actually) require a federal tax id number to set up an account, some to even view their wholesale prices. Right now, I'm still learning the process and have surprised myself by selling a few pieces here and there, but I'm not sure if I'm going to be able to turn it into a "business" so to speak. My questions then:

-Do I need a Tax ID number?
-When should I worry about it?
-Are there downsides to having one? What if I don't end up making a business out of this? Are there punishments?
-How much of a hassle is this going to be?
-Are wholesalers going to talk to me at all without one?

Thanks again for your help, you guys are great!


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## adamx8

I just buy my shirts over the net and most won't care if you have one. I have the federal number but those wholesalers your talking about want your State Tax ID, not the Federal one. I don't have the State one yet myself. I am thinking I am going to have to get one shortly though.


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## JeridHill

A federal tax id is needed if you have employees, otherwise, you can use your social security number. As for the vendors, Adam already mentioned you need a state tax id. This could also be called a vendor's license or a reseller's certificate.


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## truemeaning

I just started my company and will be getting my garments made soon so I'm sorta new to this too. I think you should get your state tax i.d. number, it's needed for some of the things you will need for your business like to see wholesale prices and get a new bank account. You should go ahead and register your company and legitimize it and at the same time you can apply for your state tax I.D. number. I think you also need it for your taxes at the end of the year.


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## prometheus

If you are going to sell something, you need it.


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## Rodney

> -How much of a hassle is this going to be?


Not much. Lots of info on the forum how to get one 



> -Are wholesalers going to talk to me at all without one?


Not many will. You definitely won't be getting the best prices.



> -Are there downsides to having one? What if I don't end up making a business out of this? Are there punishments?


Yes, there are punishments if you don't report your taxes.

If you don't end up making a business out of it, then you won't need to use your reseller's permit or taxid anymore. You're not committed to using it forever.


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## ws66370

i too am currently juggling weather or not to get mine too right now. how much cheaper will i be able to get shirts for if i have it. for example right now i cna get white gildan heavy cotton for about $1.50 per shirt or $1.20 if i am ordering by the case. would i be able to get much of a discount below this?


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## mtmob

where are you getting them that cheap without a tax id number? if you dont ,ind me asking...


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## badalou

1. You need a resale certificate or sellers permit from your state. This because you may need to charge sales tax to some customes. I sell a lot to retailers so they need to give me a copy of their sellers permit.
2. You need a social security number if you do not have employees
3. You need a federal tax ID *ONLY*if you have employees.
4. You need a factious name statement from your county
5. You may need a city license in some cities. Check yours.


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## Ujudgnme2

Allow me.....I always tell people NOT to get the resale's permit until you are sure you are going to do business. You actually have a number of years to not show a profit for the start up of your business (ask your tax advisor). This means you can write off whatever you are spending and you dont have to show a profit. I am not one to put myself into a position where someone will come knocking at my door or create a problem when I dont have to. If you are ready to go full force then you can get your resell's permit. Remember, when you do this, you will have paperwork to fill out later this year. You have the right to put zero (0) if you have not purchased anything which you will now need to pay taxes on. Some have purchased wholesale, not used a resale's permit and there is no paper trail. What's wrong with this, nothing. When you open a paper trail, you better be ready to pay out. If you are not ready for this, just take your time.




lasttuesday said:


> I've noticed that a lot of wholesale vendors (most, actually) require a federal tax id number to set up an account, some to even view their wholesale prices. Right now, I'm still learning the process and have surprised myself by selling a few pieces here and there, but I'm not sure if I'm going to be able to turn it into a "business" so to speak. My questions then:
> 
> -Do I need a Tax ID number?
> -When should I worry about it?
> -Are there downsides to having one? What if I don't end up making a business out of this? Are there punishments?
> -How much of a hassle is this going to be?
> -Are wholesalers going to talk to me at all without one?
> 
> Thanks again for your help, you guys are great!


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## adamx8

mtmob you can actually get the shirts that cheap from many places on the net to include eBay. Just look around, I get mine for the same without the permit or number.


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## mystysue

We have both a state resale number and a fed tax id.. the resale number we use to buy things from companies that we are gonna resell.. We actually needed a fed tax id too.. but not to purchase things.. What we have found is this.. If you sell things to some of the bigger companies.. say you made shirts with logos for good size company and the sales were over a certain amount they have needed us to send out fed tax id and at the year end we get a tax form from them (i think its a 1099? but im away from the shop so dont know for sure).. a prime example of when you would need a fed tax number is this.. we just did some work for the ritz carlton hotel.. it was only a 300 dollar job of some gold lettering on a door.. After we did the job.. we got a letter saying to fill out this form and send them our fed tax ID number then they would process our payment. Another company that we did some work for required the fed tax id to show we were an outside contractor and not an employee.. which means that if we didnt have it they would have deducted fed and state taxes from our check.. for payment.. I know its wierd but this is what we have discoverd..

So to make a long post short.. If you are just selling to individuals and not companies.. you would just need a state resale number.. but if you plan on selling to any companies.. (or perhaps even stores) its best to get a fed tax id too.. The fed tax id is free..and takes like 2 mins to get on the irs web site..

I do know that legally companies need to get this number from you if you sell them over a certain amount of product and its always best to be on the safe side.. 
after the first of the year we got forms galore from companies we had sold to all last year


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## Shuffy

at least get your sale tax ID # --- even if you don't sell anything within the quarter . . you still have to send in the paperwork showing zero amount of tax collected -- otherwise you might have a fine hanging over you . . .
in the state of Florida . . there is a collection allowance (2.5%) you can hold back . . personally I don't . . I have that 2.5% go to the education fund


Diane


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## RobatMDC

Need it, no. But it really makes it easier when reporting taxes and deducting expenses on your income when your business becomes more than a hobby. The EIN is just like a Social Security number, it identifies a separate entity for business and tax purposes. 
To quote the folks from the IRS:
"_*About EINs:* An Employer Identification Number (EIN), also known as a Federal Tax Identification Number, is a nine-digit number that the IRS assigns to business entities. The IRS uses this number to identify taxpayers that are required to file various business tax returns. EINs are used by employers, sole proprietors, corporations, partnerships, non-profit organizations, trusts and estates, government agencies, certain individuals and other business entities._"
Online Application - Form SS-4, Employer Identification Number (EIN)

It costs, nothing, can be done on-line and is a good start when you decide to incorporate and go multi-national. 

Hey, everybody's gotta have a dream, right?
​


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## shannyshields

well, i am just starting in this by wanting to sell a couple shirts at a local fair on the 4th of July. I too, noticed that it was better to have that i.d number when trying to buy wholesale, so i just got back from the Nevada taxation department where i spent 215.00 applying for a business license and now have to go to the city and spend another 205.00! So, apparently what i have learned so far for my state, i that i need both a state and city business license and will hopefully be getting my i.d for wholesale(reseller's permit) soon.....i hope i am not paying for more than i have too!!! the people at the office were very rude and i seem to be running into brick walls when i try to get information as to what i actually need for all of this. I have looked online, but would love to just talk to someone who will tell my get these forms, bring them here and pay this.....wishful thinking!


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## badalou

OK, let clear this up. First if any company ask you for yout fed ID they are asking because they are under the assumption that you may have employees as do most companies that they may have done business with. If you do not have A fed. ID then you send them your SS number. YOU DO NOT NEED A FED ID IF YOU DO NOT HAVE EMPLOYESS. There are alot of you that are confusing fed ID with resale numbers. When you want to buy from a wholesaler they want your Resale number.. period.. Fed ID is for taxes not resale...If you are selling to a retail outfit as I do then you need to get their resale number other wise your state may collect the sales tax from you that you did not collect from your customer. Your wholesale suppliers want your resale certificate or permit becuase they do not sell to anyone as a end user. In other words you are a retail customer. They do not want to nor will they collect sales tax from you so they requare you to be a reseller and have the resalers permit from your state. And one person here said you do not have to have a sellers permit.... If your state does an audit and finds that you have set yourself up as a reseller and you are selling anything to a end user and you have not collected sales tax then you could be facing heavy fines and may lose the ability to get a resale certificate in the future.


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## prometheus

badalou said:


> OK, let clear this up. First if any company ask you for yout fed ID they are asking because they are under the assumption that you may have employees as do most companies that they may have done business with. If you do not have A fed. ID then you send them your SS number. YOU DO NOT NEED A FED ID IF YOU DO NOT HAVE EMPLOYESS. There are alot of you that are confusing fed ID with resale numbers. When you want to buy from a wholesaler they want your Resale number.. period.. Fed ID is for taxes not resale...If you are selling to a retail outfit as I do then you need to get their resale number other wise your state may collect the sales tax from you that you did not collect from your customer. Your wholesale suppliers want your resale certificate or permit becuase they do not sell to anyone as a end user. In other words you are a retail customer. They do not want to nor will they collect sales tax from you so they requare you to be a reseller and have the resalers permit from your state. And one person here said you do not have to have a sellers permit.... If your state does an audit and finds that you have set yourself up as a reseller and you are selling anything to a end user and you have not collected sales tax then you could be facing heavy fines and may lose the ability to get a resale certificate in the future.


Thanks Lou.


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## Rodney

> Some have purchased wholesale, not used a resale's permit and there is no paper trail. What's wrong with this, nothing. When you open a paper trail, you better be ready to pay out. If you are not ready for this, just take your time.


Actually, if you are making sales and collecting taxes (as you should be if you're making sales in your state), then you NEED a reseller's permit so you can report the taxes. If you don't, you could face a fine and jail time.


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## shannyshields

So, i guess my main question is does the reseller's permit come with the business license? I am sure that these questions are getting repetative for you guys, but i am so new at this and when i ask these questions at the departments they act like i am a looney!!!! OH, and thanks for all the information!!!!!!!


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## Rodney

> So, i guess my main question is does the reseller's permit come with the business license?


No, a business license is one thing and a seller's permit is another thing.



> when i ask these questions at the departments they act like i am a looney


Where exactly are you asking the questions? 

Visit your state's official website and they usually have links to all the information you need for starting a busines.

Reseller's permits are for reporting sales taxes in your state.

Business Licenses are for registering yourself as a business in your area. Some cities require one, some cities don't. Some require a fictitious business name statement, some require something else. But if you go to your local chamber of commerce, they will tell you what license (if any) is required.


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## JeridHill

It actually depends on your county. In our county, your business license is your resellers permit.


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## Rodney

JeridHill said:


> It actually depends on your county. In our county, your business license is your resellers permit.


There's also different names used for the different permits in different states...so that can make things confusing 

So in your county, you report your sales taxes through your business license?


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## mystysue

In our city to get a business licence we had to have a resale tax number.. to get the resale tax number we had to have a facticious business name. We did it all in one day.. filed for our dba.. (fac. business name) then went to state sales tax office, the to city business office. It was a pita day of waiting in lines, driving etc but was nice to get it all done..


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## JeridHill

Rodney said:


> There's also different names used for the different permits in different states...so that can make things confusing
> 
> So in your county, you report your sales taxes through your business license?


You go into the auditor's office, purchase a business license. They send you forms to fill out your taxes depending on your type of business and level of sales. That's it. To pay taxes, simply use your business license number. I've also used this number as a reseller's certificate through various vendors since the business license number and reseller's number are the same.

That's why when giving advice on this type of thing, I always tell them to contact their local auditor's office and go from there. Each county does it differently and as far as I know, the auditor's office is involved in one way or another.


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## Rodney

JeridHill said:


> You go into the auditor's office, purchase a business license. They send you forms to fill out your taxes depending on your type of business and level of sales. That's it. To pay taxes, simply use your business license number. I've also used this number as a reseller's certificate through various vendors since the business license number and reseller's number are the same.
> 
> That's why when giving advice on this type of thing, I always tell them to contact their local auditor's office and go from there. Each county does it differently and as far as I know, the auditor's office is involved in one way or another.


No wonder why it's so confusing for different folks.

The process you describe completely different in California (and probably in different areas of California).

Might be interesting to compile a resource for starting a business in different states (although there are probably already websites like this in google )


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## prometheus

Rodney said:


> No wonder why it's so confusing for different folks.
> 
> The process you describe completely different in California (and probably in different areas of California).
> 
> Might be interesting to compile a resource for starting a business in different states (although there are probably already websites like this in google )


Actually I don't think there is. I did a lot of searches and most hits are for places that want to do it for you ($$). It is a very vague and confusing thing. Every state doing their own thing. Even people in that do this for the governemnt don't give you very defined answers and the county/state sites aren't that great either. Like two weeks ago I applied for my Resale tax #. It took me a few weeks of online work trying to find how to do it online. When I did, I didn't hear anything back for a week, while people were telling me that they got an email just like that. I sent an email and got a repsonse telling me to call a number. When I did, the lady on hte phone started talking about "withholding". When I told her what I was looking for she gave me the same response as before that it would take 2 to 4 weeks to get a number, even though an acountant told me it is immediate and they do it all the time.


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## theflowerboxx

JeridHill said:


> You go into the auditor's office, purchase a business license. They send you forms to fill out your taxes depending on your type of business and level of sales. That's it. To pay taxes, simply use your business license number. I've also used this number as a reseller's certificate through various vendors since the business license number and reseller's number are the same.
> 
> That's why when giving advice on this type of thing, I always tell them to contact their local auditor's office and go from there. Each county does it differently and as far as I know, the auditor's office is involved in one way or another.


Yup that's all you have to do I believe in the whole state of Ohio. If I remember correctly the fee is a one-time fee of $25.00 and that gets you into business. Back in the day it was $10.00 annually but they changed that a few yrs ago.

Remember when you use your resale license that it connects your purchase with your SSN so be sure and keep records for taxes.


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## shannyshields

Well, thankyou for all the advice! I finally got everything taken care of and figured out the how i get that number here in nevada. I had to first go to the department of taxation(For tax purposes and to register for my state business license) then, they stamped my application and i was told to go to the city and appy for my city business license, which is the city of sparks. But, before going there i had to get my DBA form notarized and bring it to the court house to have it filed. after that, i was ablt to go to the city with all of my papers and pay 100.00 for the license and another 105.00 for the permit to run a business in my home. It ended up being alot more expensive than i thought, but it is finally done. In all, i have spent over 400.00 for these licenses! the woman from the state department of taxation said that I will be getting stuff from them in 2 weeks and in that, will be my resale number that i will use to buy wholesale!!!! what a pain! glad its done. and thanks for all of your information!


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## RobatMDC

OUCH! And I always heard Nevada was a business haven . . .

Up here in the outback of Idaho the state resellers permit for sales tax collection was nothing except a 35 minute wait for a person to point out the correct combination of forms required. The city (small as it is) has no requirements for any business that is not a storefront. The only upfront costs were Assumed Business Name ($25) and Articles of Incorporation filing fees ($100) with the Secretary of State.


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## shannyshields

I know! i was thinking the same thing while going through all of this...."isn't nevada suppose to wonderful for business? espcially the little guys?" Oh well, hopefully i can make up the costs once i start selling!


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## mystysue

The reason they say nevada is great for businesses.. is that there is NO state income tax.. If you are a good sized business that can save you thousands each year..


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## JeridHill

I don't envy you!

In all seriousness, good luck!


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## mystysue

I know when we got our tax number and business licence it all was not cheap.. But its all tax deductible (the only way you can think of the cost of doing business) I know to place the ad in the news paper for our dba cost us over a hundred.. But just think.. YOu are not a legit business and you have that over those that wont go the route of all the licences and stuff..


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## BIGSKIDOGG23

Is a sales tax license the same as a re sell permit?


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## JeridHill

I believe it differs from state to state. You may want to check with your local auditors office. Of course it may be called something different from state to state as well.


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## wanttobreakin

Have you gotten a Employer ID number from the IRS yet?

I just got mine and it was pretty quick... you can do it online:


Apply for an EIN (Employer Identification Number) Online


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## mystysue

The thing with the fed. employer tax number is many times.. you may not think you need it. But if your doing business with companies they are required to send in a (I believe its called ) a W-9 If they spend over like 500- 600 with you a year and you have to give them your fed. number or your social security number.. I myself would much rather have my fed tax id out there. Plus the federal number actually makes it seem like you are more of a *Company* that is set up to do business with them.


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## baumwolle

to add to what susan said ^^^

I am a sole proprietor with a fed ID and no employees. I use the Employer Identification Number (EIN)--not my SS--on various forms. It saves me from having to put my SS number out there for every client and vendor to see.


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## Free Man

RobatMDC said:


> OUCH! And I always heard Nevada was a business haven . . .
> 
> Up here in the outback of Idaho the state resellers permit for sales tax collection was nothing except a 35 minute wait for a person to point out the correct combination of forms required. The city (small as it is) has no requirements for any business that is not a storefront. The only upfront costs were Assumed Business Name ($25) and Articles of Incorporation filing fees ($100) with the Secretary of State.


Hi, where did you go to have the right forms pointed out to you? I live in CDA, Id. and I went to the city hall and the chamber of commerce and neither could help.


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## Corel Whisperer

I guess I’m lucky to live in Michigan a Sales Tax License is all you need for doing fairs, download the form apply online and it’s free. Depending on your sales you fill out paperwork once a year or every quarter.


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## ReeDesign

Along the same lines...Anywhere I can order heat transfers while I wait for my tax ID application to go through?(they said it could take 6 weeks and I have a t-shirt order lined up for right around the time my number should be issued to me!!) Trying to stay calm about it!


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## BigRigGrafix

I found this info on an IRS site; Hope it helps.


*Q.* Does my business need a federal tax ID number? 
*A.* Any business offering products or services that are taxed in any way must get a federal tax ID number. If your state taxes personal services, or if you are required to collect sales taxes on your sales, you need a federal tax ID number. All the government forms you will be required to file for your business will require either a Social Security number or a tax ID number. 
It's safe to say that any business that has employees and/or pays any kind of taxes will need a federal tax ID. Best advice is, when in doubt, get one. It's easy to do.
*See: How to get a federal tax ID number*


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## BigRigGrafix

Federal Tax ID (EIN)
Get your Tax ID in minutes. Fast, Secure online form.
www.gov-tax.net
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•Small Business Loans
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To set up a federal tax ID number (also called an Employer Identification Number, or EIN), contact your nearest Local IRS Field Office, or call the IRS Business and Specialty Tax Hotline at 800-829-4933.
You can also apply online for an EIN via the IRS web site. The online application asks the questions, you provide the answers and, just like that, you get your EIN immediately. You can then download, save, and print your EIN confirmation notice.
If you want to apply the old-fashioned way, the form you'll need to fill out is IRS From SS-4 (.pdf).


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## lamjone

I am also without a tax id number and I have a couple of wholesale websites that offer blanks but does anybody know any websites where I can get blanks that come in different styles and cuts other than just solid colors and normal crewnecks and vnecks


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## MsMillionairess

There is a LOT of good info in here! I've been working out of my home for a few years. Started as a side project then has been growing into a full business. I am just now looking into getting a sellers permit/business license. I don't plan to have a store front since I do most of my business online. I wonder, do I need all the licensing of a store front if I just work from home? I don't want to get fined for something like this.....


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