Is EIN the same as tax exempt?

Question

I just started a new business can I use my EIN for tax exempts for my business? Do I receive some kind of card stating I'm tax exempt?

Answer 1

The EIN is your Employer Tax ID Number. It is an identification number and gives you no rights. If you buy merchandise for resale, you can get an exemption certificate from your state tax agency. This gives you the privilege to purchase your stock in trade without paying sales tax. It does not exempt you from paying sales tax on items that you use in your business. (If you sell teddy bears, you can buy crates of teddy bears without paying sales tax but you have to pay sales tax when you buy office supplies.)

Answer 2

No, EIN is a federal number, and any exemption from sales tax is at the state level. But you pay sales tax on items you buy and use for your business, you aren't tax exempt. If you are buying items for resale, you can get a form from the state that allows you not to pay tax on those, since you'll collect it and remit it to the state when you sell the items.

Answer 3

An EIN (Employer Identification Number) is required for all companies and issued by the IRS. For a company to be tax-exempt, it must file Form 1024 requesting tax-exempt status. States have different rules for being a non-profit and how to file for non-profit status and reporting requirements.

Answer 4

Having an EIN does not mean that you are automatically tax exempt. To be tax exempt, you must rightfully claim a tax exemption. By not rightfully claiming a tax exemption could cost you more than paying the tax.

Answer 5

Items you purchase for your business to use are NOT EXEMPT. You pay sales tax like everyone else.

If you are purchasing items for resale and collecting taxes from your customers, then you can purchase them exempt from sales taxes. You will need to apply for a sales tax number from your state. The EIN does not qualify.

Answer 6

You might need to expand your question. For example, are you looking to operate a NPO (nonprofit organization) which might be exempt from federal and state income taxes or are you in an industry where you feel your purchases or products should not be subject to state sales and use taxes?

If its the former, look for package 1023 from the IRS to get you started (www.IRS.gov).

If it's the latter, each state has different rules for products, industries, services and transactions that might be subject to that state's sales and use taxes. A good resource for state information is Ryan's SALT Gateway (http://www.ryanco.com/topic.aspx).

Answer 7

EIN mean Employer's Identification Number. You will be using this number to pay your employment taxes. It has nothing to do with tax exempt status.