EIN for State Tax Registration and Sales Tax

Dec. 28, 2025, 12:57 p.m.
An Employer Identification Number (EIN) is often a requirement when registering a business for state taxes and sales tax in the United States. An EIN is a federal tax identification number issued by the IRS to identify a business entity. While it’s issued at the federal level, states rely on it to track and administer state taxes.
EIN for State Tax Registration and Sales Tax

Why States Require an EIN

Most state revenue and taxation departments use the EIN to:

  • Identify your business across tax systems

  • Link federal and state tax records

  • Process sales tax, payroll tax, and income tax filings

  • Issue permits, licenses, and tax accounts

Without an EIN, many states won’t allow you to complete tax registration.

EIN and State Tax Registration

When you register with a state tax agency, you’ll typically need an EIN for:

  • Sales and use tax permits

  • Employer withholding tax

  • Unemployment insurance (UI) tax

  • State income or franchise tax

  • Excise or industry-specific taxes

States like California, New York, Texas, Florida, and Washington all require an EIN during online or paper registration.

EIN for Sales Tax Registration

If your business:

  • Sells taxable goods or services

  • Has nexus in a state (physical or economic)

  • Operates an online or e-commerce store

  • Uses marketplaces or ships products into a state

You must register for sales tax, and an EIN is usually mandatory for:

  • Applying for a Sales Tax ID / Seller’s Permit

  • Filing monthly or quarterly sales tax returns

  • Remitting collected sales tax to the state

Who Needs an EIN for Sales Tax?

You generally need an EIN if you are:

  • An LLC or corporation

  • A partnership

  • A sole proprietor with employees

  • A non-U.S. resident business owner

  • An online seller with multi-state nexu

  • Some sole proprietors without employees may use an SSN in limited cases, but many states strongly prefer or require an EIN.

EIN vs State Tax ID

  • EIN → Issued by the IRS (federal)

  • State Tax ID → Issued by the state after registration

You must have an EIN before applying for most state tax IDs.

When to Apply for an EIN

Apply for an EIN before:

  • Registering for sales tax

  • Hiring employees

  • Opening a business bank account

  • Applying for business licenses or permits

The EIN application is free and usually issued immediately online by the IRS.

Common Mistakes to Avoid

  • Applying for state tax registration before getting an EIN

  • Using a personal SSN instead of an EIN when not allowed

  • Entering incorrect business structure details

  • Registering in the wrong state without sales tax nexus

 

https://www.irs.gov/businesses/small-businesses-self-employed/get-an-employer-identification-number