Question about EIN / Tax ID number

wrote

There's no valid reason to get a Federal Tax ID number (other than your SSN) for a retail consumer purchase. Federal EIN's are reserved for business entities, employers, non-profits and the like. If you aren't one of those, don't get that number. And yes, when you tell them you want a EIN, they'll be expecting tax reports and filings for that number. So - maybe you're trying to buy something you shouldn't be buying.

-- Paul Thomas, CPA snipped-for-privacy@bellsouth.net

Why? The answer to that question fills the gaping hole in your narrative, and until that's filled, no one can answer you question.

-- Phil Marti Clarksburg, MD

EIN's can be obtained for a variety of reasons which are listed on page two of Form SS-4 and related documentation. If you are a sole proprietor and request an EIN, the IRS will probably ask you every quarter about your reporting of employee withholding, whether you have any employees or not. Other entities may receive similar communications from the IRS. In the end, the EIN ties back to a social security number in most cases, so it is mostly a privacy issue, with an associated cost of inconvenience (given that security/privacy vs. convenience are always inversely related).

-Mark Bole

This sounds like a phishing scam. How are you going to pay for the purchase? Unless the company is extending credit to you, I can't think of any legitimate reason that they would need your tax ID number. If they are extending credit, you would have to give them your social security number so they could do a credit check. If they are not extending credit, I would find another place to buy the items. Bob Sandler

Did they require an EIN or a sales tax ID number? We get a lot of calls from clients saying that a business they have started dealing with requires a "tax number" from them and they often wonder why another business would need their federal EIN. Good question. Generally, what is being asked for is a sales tax number ( or resale certificate number). Either way, unless the deal is just too good to pass up, which I doubt it will be since you're not in a business, just walk away from the deal. You don't have either number and don't truly qualify to get either number.

I wonder if the OP was confused about what tax ID number was being requested. It is possible that he was attempting a purchase from a wholesale only company doing business in a state like California where a _State_ tax ID number issued by the Franchise Tax Board is required to purchase merchandise that is for resale. If the company sold directly to the end user then that company would be required to pay the sales tax. If for resale then the reseller (with the state tax ID number) has to pay the tax. Many wholesale companies only sell to resellers and always will require the tax ID number so they will not be on the hook for the state sales tax.

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-Ernie-

Could they have been talking about a SALES TAX resale number? Were you purchasing the kind of goods that would normally be resold?

-- Don EA in Upstate NY

It occurs to me that perhaps you were trying to buy certain items at wholesale rather than through regular retail outlets and this may be the reason they ask for a tax ID number. This of course is done to ensure that their products are not sold to the general public, but through regular and authorized retail outlets. OTOH, perhaps they were referring to your having a sales tax number, thinking that maybe you were already a regular retailer, and thus they would not have to charge you sales tax. Which kind of "tax ID" number were they referring to?

ChEAr$, Harlan Lunsford, EA n LA

I think this needs a little clarification. Sales Tax Numbers are issued by the Board of Equalization in California. (We have 3 separate taxing agencies, one for income tax, one for employment tax, and one for sales and use tax). Sellers sell to wholesale buyers who will then resell the items to the end user. The wholesale buyer does not pay sales tax to the seller. He eventually collects it from his customers and pays it over to the Board of Equalization. Sellers sell to buyers who will actually use the items. In this case the buyer will pay sales tax to the seller. This also includes anything sold to a wholesaler who is buying not for resale but for his own use (furniture, fixtures, equipment, supplies, etc.) Linda Dorfmont E.A., CFP, CSA