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Business Tax ID prior to business plan

I am writing up my first business plan. I've identified products I want to sell and a process in which to sell them. I contacted one company, but they refuse to give me a wholesale price list- or other information- without a valid business tax id. I am interested in getting the id from IRS and state tax agencies and pursuing this. However, if the wholesale margins don't work out, I will cut and run and chalk it up to experience. My concern is that if I don't pursue this project, I will have a business tax id and no income and will then have to file some kind of tax form. My concern, and it may be irrational, is that this could trigger problems for me like a potential audit. Is this a valid fear? Where can I go for more information. thank,

Don

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Reply to
bbcrock
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No. Just make sure you indicate no employees, or they'll set you up with employment tax filing requirements. If you have no employees and aren't going to have to deal with sales tax, I can't imagine what kind of state tax ID you'd be looking for.

-- Phil Marti Clarksburg, MD

Reply to
Phil Marti

The "state tax ID" they're probably looking for is probably a state sales tax exemption certificate. This will allow you to purchase goods for resale without paying sales tax (and from the seller's perspective, without collecting it). As you're looking for wholesale prices lists, they'll definitely want to make sure you're eligible to purchase from them w/o them having to worry about collecting & remitting state sales taxes.

Reply to
Mark A. Hvasta, CPA

Additionally, some states require a federal ID # before they will issue the desired sales tax number. I suppose it's a check and balance on people who think that mere possession of a sales tax number will allow them to buy everything without paying the tax. ChEAr$, Harlan Lunsford, EA n LA

Reply to
hlunsford

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