New business owners often wonder about the difference between a resale number and a tax ID number. Both are necessary, but serve separate purposes. Useful and practical information about these required tax numbers is provided at the Gov Doc Filing website which also provides a simple and convenient way to apply for them online.
Resale numbers are issued by the state you do business in. Operating a business in more than one state requires applying for a resale number from each one. The IRS, however, will only assign one tax ID number for your business.
Determining state and federal filing requirements can get complicated, especially for a new business. In addition to being a handy source of information, Gov Doc Filing’s website also makes each tax ID application a hassle-free process.
State Resale Number
When you register a new business with a state tax agency, they issue a resale number and a state resale certificate. The resale number is required for reporting annual state income tax returns and used to purchase tax-free goods from wholesalers. Without a state resale number, vendors won’t sell you any tax-free wholesale goods. When presented with a state resale number, however, the vendor will sell you tax-free goods because you will then collect the applicable state sales tax from your own customers when they purchase those goods from you.
Federal Tax ID Number
A federal tax ID issued by the IRS is required before applying for a state resale number and is used when filing annual federal income tax returns and quarterly payroll taxes. It’s also used when opening bank accounts and applying for credit in your business’s name. A simplified online application process for a federal tax ID number can be found at Gov Doc Filing’s website.
Making Things Easy
Every business must comply with state and federal tax filing requirements and additional reporting is necessary when taxable goods are sold to consumers. It can be confusing for a new business owner, but it can also be comforting to know there’s an online source that makes each tax ID number application process easy.
