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Difference Between Employer ID Number

and State Tax ID Number

By Nashib Umer

The most frequently asked question by Business Owners is, "What is the difference between Employer Identification Number and State ID Number?"

  • Federal Tax ID Number assign by Internal Revenue Service.
  • Reseller Permit Assign by the state.
  • Employers Identification Number is used to hire employees.
  • Certificate of Authority is used to collect sales tax from your clients.
  • "FEIN" is used to file business taxes.
  • Sales and Use Tax Number is used to file Sales Taxes.
  • Employers Identification Number can be requested to IRS to cancel.
  • State ID can we cancelled by filing final sales tax return.
  • State Tax Identification Number is also known as Certificate of Authority, Reseller Permit, Sales and Use Tax Number.
  • Excise business Tax and Taxpayer ID Number.
  • "EIN" also known as Federal Employer Identification Number.

A sales tax exemption certificate is a legal document issued by the state. This certificate of authority gives your business the authority to collect the required sales and use taxes, and to issue appropriate reseller permit exemption documents, including resale certificates used for purchasing inventory.

Other names: Sales tax id number also known as:

  • Reseller permit.
  • Sales tax vendor id number.
  • Sales tax registration.
  • Reseller tax id.
  • Reseller certificate.
  • Certificate of authority.
  • Sales tax Identification number.
  • State tax ID number

A state tax on the end-purchase of a good and provision of services including internet sales. Normally sales tax is levied on 'tangible personal property'; it has to be movable. Intangible property (e.g. stocks and bonds) are excluded. Sales taxes can be applied to tangible goods like food (in some states), clothing, cars, furniture, household items, and other goods. By comparison, the state tax does not generally apply to landscaping services, attorney fees, private school tuition, stocks and bonds, real estate investments, and other purchases more typically made by higher-income families.

A seller has to charge state tax if it has 'nexus' where it is located. Nexus, or physical presence, is established if a business maintains a temporary or permanent presence of people (employees, service people or independent sales/service agents) or property (inventory, offices, warehouses) in a given locality. There is no over-arching definition of nexus, so each taxing locality may define it differently - and many do, leading to endless problems for businesses which have operations in multiple states.

Bottom Line Employer identification Number and State Identification Number are two separate documents assigned by the federal and state respectively". provides business documents filing in all 50 States. Incorporating your business can be a hassle, you may be starting your first business, incorporating or forming a limited liability company for any number of reasons, we are here to help you and will provide all necessary services to ensure that the administrative processes are completed in the shortest period of time.

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