Businesses located in Texas require a state sales tax ID number as well as a federal employer identification number. Any business that exchanges goods or services or works with leasing or selling tangible personal property will need to file for a state sales tax ID in Texas.
For businesses that consist of a single individual (a sole proprietorship), a personal Social Security number can be used to register taxes for the business. However, if the business will eventually hire employees, register for certain licenses online or open bank accounts, loans or lines of credit, then even a sole proprietorship should register a request for a state EIN. A Texas sales and use tax permit is expected for all businesses, from individual owners to corporations.
The first step for any new business is to file for a federal EIN. The IRS provides online access to the related forms and information. The EIN application will require the owner’s name, Social Security number and general personal information like the addresses of the owner and the business.
In order to apply for an EIN, the business or organization should be legally formed and consolidated first. To file a nonprofit or tax-exempt organization, follow the directions on the IRS website.
After obtaining the federal EIN, it’s time to apply for the Texas sales tax ID number. The application can be found on the Texas comptroller website. To apply, you will need:
- The owner’s information and Social Security number
- Names, Social Security numbers and/or EINs for each partner, officer or director
- A North American Industrial Classification System code for the business
- Depending on the type of business, other information may be required. The website will provide a list.
To perform a Texas tax number lookup, use the Texas comptroller’s website to search for the business in question. The page will ask for any information you have about the company. If you have the taxpayer ID number or the FEI number, they can be entered at the top and searched.
To find a company by address or location or individual or legal name, expand those sections on the webpage and enter any information that’s available. Press the respective search button to search the Texas records for that business’s state sales tax EIN.
Anyone in Texas who engages in business that involves the sale of tangible personal property, the sale of taxable services or the leasing or renting of tangible property will need to have a state EIN.
Engaging in business refers to any company with an office, point of sales, warehouse or other physical place of business; any company operating through salespeople, employees, representatives or agents; or any company working with the rental or lease of property that produces receipts. The Texas comptroller website contains more information on what qualifies.
The Texas sales tax ID number is required for most financial operations of a business, including the hiring of employees and payroll. Any business with employees will need to register. Other financial transactions like bank accounts, loans and lines of credit will require the business to be registered federally and with the state of Texas.
For independent owners or sole proprietors where a state EIN is not absolutely required, there are advantages to registering for an EIN: namely, the ability to use that EIN rather than one’s personal Social Security number. It also allows for business expansion in the future. The process is fairly straightforward and can easily be completed online in minutes.