Information You Need To Know About Colorado Tax ID
EIN and state Tax ID
EIN and State Tax ID are two legally required Tax Id numbers for different types of business organizations. EIN stands for Employee Identification number and is issued by the IRS. State Tax ID is issued by the State where the business operates and is only applicable to the State. If a business has operations in multiple states and hires employees, it has to obtain State Tax ID in each state. It is issued by the State Revenue Department.
Who needs to apply for Tax ID?
All types of business organizations like sole proprietorship, partnerships, Trusts, Estate of Deceased, Limited Liability Company, Corporation, not for profit organisations and Church, need to apply for a Colorado Tax ID number.
Uses of Tax ID
Business organisations need Colorado Tax ID number to carry on the regular functioning of their business. It is required for
- Hiring employees and withholding the payroll tax
- Getting all other permits and licenses to carry on the business
- Opening bank accounts for the business
- Getting a line of credit approved by the banks
- Filing of tax returns and payment of taxes
- For taking over of new business and restricting the existing business
How to Get Colorado Tax ID number?
Business organizations can file for the tax id numbers directly on the website of IRS. There are different methods of filing for EIN. Business owners can apply for EIN through telephone, fax, mail or online. Applying for a Tax ID through telephone needs the business owners to attend for a telephonic interview with the representative of IRS and answer all the questions regarding the business. Business owners need to download the application form and send it through mail or fax. It is the longest method and requires around 4 weeks to obtain the number. The fast and easiest way to apply for a Tax ID number is through online application. Business owners need to visit the IRS website and fill in the EIN registration form. They will receive the EIN within an hour of submitting the form; provide all the details in the form are correct.
Business owners can also hire the services of consultants to get a Colorado Tax ID number. The consultants charge a small fee for providing the service. They are experienced in the process and can handle the communication with IRS easily on your behalf.