A State EIN is only for employers issued by the state. It is a pure employer number. You use it to pay withholding tax to the state. You also need an EIN if you are an Emplpoyer. An EIN is an IRS issued tax number. You use it for your business income tax return as well as your business employment taxes. If you have employees, you also need a State EIN. Note: an EIN is not a sales tax ID. On the other hand, a Sales Tax ID seller's permit is a state sales tax ID. You need it to buy merchandise wholesale and use it to collect sales tax if you sell retail. You will need to file sales tax returns and you need that seller's permit number. A resale certificate is an one page document that certifies that you have a seller's permit and you can buy wholesale. The resale certificate comes with our seller's permit obtainment service.

If you file as a sole proprietor, you will be liable for all business debts and liabilities. For example, you have a cleaning business and your employee steals from your clients, you will be liable personally. If you form an LLC, and the same thing happens, your personal assets, such as your home and car are protected. If sued, they can only get what the LLC has. If only $1,000 in the bank, that is all the plaintiff gets.

Even though they will tell you that Delaware or Nevada is the best state, the best state is actually the state you do business in. This simplifies the entire business.