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Navigating the world of tax IDs

Dec 20, 2012 - By Margie Rowell

Question --"My banker said I need a 'tax ID' to open a bank account for my new business. What is that, and where do I get one?

-- Sabrina, Jackson

Answer -- Many times bankers will tell a new business owners that they need tax IDs, but there are different types of tax IDs.

Do they mean an Employer Identification Number or a Wyoming Sales Tax Number? What are the differences?

An Employer Identification Number also is known as a Federal Tax Identification Number and is used to identify a business entity. This is normally what the bankers mean when they say "tax ID."

If you answer "yes" to any of the following questions, you will need an EIN: Do you have employees? Do you operate your business as a corporation or a partnership? Do you file any of these tax returns: employment, excise, or alcohol, tobacco and firearms? Do you withhold taxes on income, other than wages, paid to a nonresident alien? Do you have a Keogh plan?

Wyoming Sales/Use Tax License Number also can be referred to as a Tax ID number. This normally is not what the banker is referring to when he says you need a tax ID. This ID number is needed for any person who meets the definition of vendor and must license to collect and remit sales tax.

For more information about a Wyoming Sales Tax Identification Number, contact Terri Lucero, Wyoming Department of Revenue, Education and Taxability Services manager, at (307) 777-5293, or email terri.lucero@wy.gov.

Information also is available on the WyomingEntrepreneur.biz website at www.WyomingEntrepreneur.biz. Free and confidential meeting with an adviser is available.

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Editor's note: Margie Rowell is the regional director of WSBDC, part of WyomingEntrepreneur.Biz, a collection of business assistance programs at the University of Wyoming. To ask a question, email at wsbdc@uwyo.edu or call at 1-800-348-5194.

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