Starting a business involves a series of legal steps that vary from state to state. If you're planning to register your company in North Carolina, you may need a state tax ID number. This process can be completed through the state's online business registration system. Obtaining your NC state tax ID number is free, but there are a couple of things you must do before applying.
What Are Tax ID Numbers?
Most businesses that operate in the United States need a tax identification number. This nine-digit identifier is known as an EIN (employer identification number) or FEIN (federal employer identification number) and can be obtained online from the IRS. Without it, you cannot file tax returns, apply for business licenses or open a bank account for your company.
However, each state has unique requirements for business owners. North Carolina, for example, assigns its own tax ID numbers to companies. This unique identifier is issued by the state's department of revenue and works similarly to an EIN. It's legally required for most companies, nonprofits, estates, trusts and other entities. Even if you're a sole proprietor, you may still need to apply for an EIN number in NC under certain circumstances.
As long as you have employees in North Carolina or plan to open a business bank account, it's necessary to get an NC state tax ID number. Partnerships, corporations and church organizations are subject to these requirements too. The application process varies from one entity to another.
Apply for a NC State Tax ID Number
Entrepreneurs and business owners may apply for an EIN in NC via the state's online business registration system. Make sure you have the following information at hand before completing this process:
- General business information (the type of business, registration date, etc.)
- Business name and contact details
- Name of the responsible person and business partners
- Your EIN or FEIN
- Your North Carolina secretary of state number, if applicable
Sole proprietors, for instance, will need to provide their names, titles ("owner" in this case), Social Security numbers, business address and information about their products or services and primary activities. They must also state their reasons for applying, such as starting a new business, switching to a new type of organization or hiring employees. Additionally, they are required to answer a few questions related to their business, such as whether or not they pay federal excise taxes, sell alcohol or tobacco or expect to hire staff over the next 12 months.
Once you’re done, enter your email address in the designated field and submit your application. Next, you will be redirected to a confirmation page that includes a tracking number. Expect to receive an account ID number by email within five days. In general, it's not necessary to send any other documents by mail. If you need help with your application, you may call 1-877-308-9103 for assistance.
Are There Any Other Requirements?
Getting an NC state tax ID number is just the beginning of your journey as an entrepreneur. Depending on your business type and what you sell, you may need certain licenses and permits. In addition to federal, state and county taxes, business owners may be required to pay partnership taxes, motor carrier taxes, tobacco product taxes and more.
For example, if you provide taxable services or sell certain digital products at retail in North Carolina, you must pay a sales and use tax. This also applies to motels, hotels, dry cleaning businesses and companies that charge admission to entertainment activities. If your company falls into any of these categories, you must apply for a sales and use tax account number online or by mail.
The law is constantly changing. If you've never done business in North Carolina before, consider reaching out to a lawyer or a financial consultant. An expert can guide you through the business registration process and help you achieve legal compliance.
- IRS: Online EIN: Frequently Asked Questions
- North Carolina Department of Revenue: Online Business Registration
- North Carolina Department of Revenue: Who Should Register for Sales and Use Tax?
- IRS Tax ID (EIN) Number Application: Sole Proprietor Application
- Greenville NC: Taxes for Your Business
- Zoom Filings: Apply for a North Carolina Tax ID (EIN) Number
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