North Carolina Tax ID (EIN) Number & Business Registration
Looking to register a Tax ID Number and/or start a business in North Carolina? You can do both online, simply follow the steps below to learn how. Starting a business is simple because everyone has the potential to start their own enterprise. But it can become complicated because before you can start selling anything, you'll need to make sure your North Carolina business is legally sound and properly structured.
Steps to Obtain a North Carolina Tax ID & Business Registration:
- Business Formation in North Carolina
- Obtain your Federal Tax ID (EIN) Number
- North Carolina State Tax ID Number
- North Carolina Licenses & Permits
Your knowledge of your business's operations will help you decide what business structure is best for you. There are several options available to you, each with advantages and disadvantages for your taxes and individual liabilities.
Sole proprietorships and partnerships are straightforward. In one of these businesses, any income you make will be taxed as if it's miscellaneous income for you as an individual. In many cases, this means paying less in taxes, but it also exposes you to business debts, and increases your personal liability. Partnerships are only differentiated because they require two or more members.
Next, there are limited liability companies (LLCs). These companies are treated as separate legal entities, or pass-through entities. The business exists independently from you, which means you'll be shielded from liability, and you won't need to personally take on your business's debt. In North Carolina, there are no additional state taxes for LLC, which means you'll only pay taxes on income or dividends you receive from the business. You will, however, be required to create an annual report.
There are also corporations (C-corporations and S-corporations). These are pass-through entities as well, and offer their owners even more liability protection than LLCs. However, they're going to be subject to corporate taxation, which means you could end up paying double taxes on at least some of your earnings. In North Carolina, there's a flat corporate income tax rate of 5 percent, as well as a corporation franchise tax. In some cases, even LLCs are responsible for paying this corporate franchise tax.
If your sole proprietorship or partnership is going to hire employees, open a bank account, or conduct similarly financially impactful activities, it's going to need a federal tax ID (EIN) number. If you're starting an LLC or a corporation, you'll need one no matter what.
In case you aren't familiar, your federal Tax ID is going to serve as a unique identifier for your business. Come tax season, you'll need it to file taxes for your business on a federal level. But before that, you'll need your tax ID to accomplish all sorts of things, including hiring employees, opening a business bank account, and establishing partnerships with other businesses.
Having your EIN in place will allow you to start making forward progress in your business, and you can claim your number at any time. The simplest way to do this is through a professional online Tax ID Number Obtainment Service; once you submit your business's information, you can obtain your EIN number in a matter of minutes.
Your business will likely need to file for taxes on both a federal and a state level in North Carolina; accordingly, you'll need a state tax ID in addition to your federal tax ID. Even if your company may not owe the state income tax, you'll still need to register for employment taxes, sales taxes, and excise taxes on certain types of consumer goods. Your state tax ID won't be used for as many applications as an EIN, but it's still good to have on hand as early as possible so you can fill out your paperwork smoothly.
Like many states, North Carolina doesn't require you to have a general, one-size-fits-all business license. However, there are more than 700 different regulatory, state-issued, and occupational licenses and permits that your business may require to operate legally within your state. There may be even more permits at the local level. The best way to find out if your business needs one of these licenses or permits is to peruse North Carolina's occupational boards and see if your type of business specifically requires one. You can also talk to other business owners in the area to gauge their needs. Now that you understand the requirements you'll need to meet in your North Carolina business, you can start making moves to cross these items off your life.