Oklahoma Tax ID (EIN) Number & Business Registration
Are you looking to start a business and obtain your Oklahoma Tax ID (EIN) Number online? In Oklahoma, opportunities for entrepreneurs are plentiful–as long as you know where to look. However, before you can start attracting clients and making money, you need to make sure your business’s foundation is legally sound and stable. This article will help you do that. Situated near the center of the United States, Oklahoma isn’t densely populated, but is accessible from Texas, New Mexico, Colorado, Kansas, Missouri, and Arkansas. And despite its largely rural makeup, its major cities (including Tulsa, Oklahoma City, and Norman) are lush with economic opportunities.
Economic growth in Oklahoma has been slightly slower than the average across the United States, but remains respectable at 2.8 percent. Unemployment is down, however, and proprietorships are increasing at a rate of 1.7 percent. Currently, there are more than 347,000 small businesses that call Oklahoma home. Cumulatively, they employ 712,797 people, which is around 52 percent of the total working population in the state. Overall, there are a ton of benefits for entrepreneurs who choose to start their businesses in the state, including resources like the Oklahoma Small Business Development Center, and special grants and incentives to new business owners.
Steps to Obtain an Oklahoma Tax ID & Business Registration:
- Business Formation in Oklahoma
- Obtain your Federal Tax ID (EIN) Number
- Oklahoma State Tax ID Number
- Oklahoma Local Licenses & Permits
Before you get to registering your business, you’ll need to decide on a corporate structure for that business. Everything should start from your business plan – a thoroughly researched blueprint that should dictate your business’s strengths and weaknesses, and lay a course for the first several years of its development. With that vision in place, you’ll be able to decide which business type best suits your company. There are several dimensions to consider here, including the complexity of your chosen business structure, the taxes you’ll pay, and the level of personal liability you may face.
Let’s start by looking at complexity. Corporations are by far the most complex business type, because they must adhere to the greatest number of rules and regulations. They’re difficult to start and manage on an ongoing basis, especially if and when they decide to issue public shares (which are an advantage unique to this business type). Limited liability companies (LLCs) are less complex, but are still a separate legal entity, so they still demand some extra effort compared to sole proprietorships and partnerships, which are fairly easy to start.
Taxes aren’t always straightforward. Sole proprietorships and partnerships allow you to pay taxes solely as an individual, without worrying about any “pass through” strategies or complicated tax rules. In LLCs, you’ll track your business’s income and expenses separately, and withdraw money from the business as profit or salary when you choose; at this point, you’ll pay taxes as an individual. In Oklahoma, there was once an annual LLC certificate fee of $25, but this fee has been repealed. In Corporations, taxes are a little more complex. You’ll pay taxes on both the federal and state level on all eligible income in the business. You may also pay taxes on a salary or profits you withdraw from the corporation, resulting in double taxation. In Oklahoma, the corporate tax rate is a flat 6 percent.
You should also consider your liability exposure. In sole proprietorships and partnerships, you’ll be personally liable for practically everything your business does, including any debts you take on. In LLCs, you’ll have at least some liability shielding, protecting individual owners from some potential legal problems. Corporations offer the most liability protection, shielding their owners from most forms of liability.
After you’ve decided on a business structure, your next step is getting an employer identification number (EIN), sometimes called a federal tax ID number. This step will register your business with the federal government, and open up several opportunities, including the ability to hire employees, open a bank account in your business’s name, start building business credit, and apply for terms with other businesses. Almost every business will require an EIN for one purpose or another. LLCs and corporations need their Tax ID to file taxes appropriately. All business structures will need an EIN Number to open a business bank account, hire employees, or apply for credit with another business. Basically, any interaction you have with the government, another business, an employee, or a major client or partner is going to require you to have this number.
If you’re confused about the obtainment process, the online Tax ID Number Obtainment Service makes things simple. You can get your business set up with an EIN in less than an hour.
If you plan on selling goods and services in the state of Oklahoma, you’ll also need a state tax ID number. Much like how your federal tax ID number registers your business with the federal government, your Oklahoma state tax ID number will register it with the state of Oklahoma. You’ll also need this number when registering for sales taxes and excise taxes (which apply to sales of gasoline, alcohol, and other types of products).
Several types of businesses will also be required to get special licenses and permits before they begin operations in the state of Oklahoma. These can vary significantly based on what you’re selling, who you’re selling to, and the size and scope of your business, but you’ll probably need at least some additional licensure if you’re involved in construction, retail, restaurants, bars, wholesale, consumer credit services, or transportation. You can read more about Oklahoma’s state-level requirements for licenses and permits here – but be aware you may also need additional permits at the local level. For those, your best bet is to contact your local Chamber of Commerce for more information.