What’s the difference between Employer Identification Number (EIN) or Federal Tax ID and State Tax ID or also known as (Sales Tax Number)?
• An EIN or Federal Tax ID is assigned by the IRS (Internal Revenue Service)
• A State Tax ID Number is Assigned by the state
• An EIN or Federal Tax ID is used to hire employees
• State Tax 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 Tax ID Numbers are used to file Sales Taxes
• A State Tax 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) or Federal Tax ID.
The Employer Identification Number or Federal Tax ID and State Identification Number or State Tax ID are two separate documents assigned by the federal and state respectively.