How Do State Tax IDs vs Federal EIN Tax IDs Differ?

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What’s the difference between Employer Identification Number (EIN) and State Identification Number or also known as (Sales Tax Number)?

• An EIN is assigned by the IRS (Internal Revenue Service)
• A State ID Number is Assigned by the state
• An EIN is used to hire employees
• State ID Numbers are used to collect sales tax from clients and to avoid sales tax to suppliers
• An EIN is used to file business taxes
• State ID Numbers are used to file Sales Taxes
• A State ID Number is also known as Sales Tax permit, Certificate of Authority, Reseller Permit, Sales and Use Tax Number, Excise business Tax and Taxpayer ID Number
• An Employer Identification Number is also known as Federal Employer Identification Number (FEIN).

The Employer identification Number and State Identification Number are two separate documents assigned by the federal and state respectively.

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