Wisconsin Tax ID (EIN) Number & Business Registration
Looking to register a Tax ID Number and/or start a business in Wisconsin? You can do both online, simply follow the steps below. For the past several years, Wisconsin has consistently ranked among the top states in the country in terms of economic growth, and it’s especially friendly to small businesses. The interior of the state is mostly rural, filled with forests and farmland, but there are plenty of big cities to draw entrepreneurs, including Milwaukee, Green Bay, Madison, and Appleton. You can see the state’s power to attract and retain small businesses in its SBA profile; Wisconsin is home to more than 440,000 small businesses, which account for more 97.7 percent of Wisconsin businesses. Collectively, those companies employ more than 1.2 million people, who represent nearly 51 percent of all Wisconsin employees.
Steps to Obtain a Wisconsin Tax ID & Business Registration:
- Business Formation in Wisconsin
- Obtain your Federal Tax ID (EIN) Number
- Wisconsin State Tax ID Number
- Wisconsin Licenses and Permits
There are several types of formal business structures tochoose from when starting a Wisconsin business: sole proprietorships, partnerships, limited liability companies (LLCs), and corporations. Sole proprietorships are the simplest to start up, with corporations being the most
complicated. But before you make a decision on what structure to pursue, you should understand their strengths and weaknesses.
First, consider the tax advantages of each business type. Sole proprietorships and partnerships only differ in terms of the number of members associated with each. With either structure, you’ll pay taxes as an individual. LLCs and corporations are treated as distinct legal entities, so their income and expenses will be tracked separately from yours, and you’ll pay taxes as an individual on any revenue or profits you withdraw from them. LLCs aren’t required to pay a state-level tax on income they make, but they do have to file an annual report. They can also choose to be taxed as corporations for tax purposes; corporations are required to pay taxes on all eligible income, and in the state of Wisconsin, the corporate tax rate is a flat 7.9 percent of net income. Note that since you’ll also pay taxes as an individual, this can result in double taxation.
Next, consider the liability protection offered by each business. Sole proprietorships and partnerships offer little to no protection; you’ll take on any business debts as personal debts, and will be held personally liable for legal issues that may come up. LLCs, since they’re
treated as separate entities, afford you some degree of liability protection, while corporations offer a significant degree of liability protection.
There are also other perks associated with certain types of businesses; for example, corporations are able to issue public shares, which makes them ideal for large-scale businesses that need to raise funds. They’re more complex, and require you to follow more rules and regulations, but if you’re interested in long-term expansion, they’re the way to go.
In any case, before you finalize a business structure, make sure you have a business plan in place. This document will force you to research your business environment, including similar businesses in the past, your current competition, and strengths and weaknesses to watch out for. You’ll also need this document if you plan on seeking funding from investors, or if you’re getting a loan for your startup.
Most businesses will need a Federal Tax ID Number, or employer identification number (EIN) to operate. This number is required to register your business with the federal government, which you’ll need to do if you plan on hiring employees, and you’ll also need it to start establishing business credit, or open a business bank account. It’s also useful to have as an identification number when filling out new forms and agreements with other businesses that way you don’t have to provide your social security number.
Getting a federal tax ID number isn’t especially difficult, but it can be a time-consuming process. If you want to get started as quickly as possible, you should take advantage of our federal tax ID obtainment services; simply give us a few pieces of information on your business, and we’ll get you set up with a Tax ID number in under 1 hour.
You may also be required to get a Wisconsin state tax ID number. While your state tax ID will serve as a unique business identifier, like your federal Tax ID, you’ll use this for different purposes. For example, you’ll need to register with the state if you plan on selling taxable goods and services in Wisconsin, or if you plan on hiring employees in the state. The process for getting a state tax ID in Wisconsin is similar to getting a federal tax ID. Both can be obtained fairly easily online.
Some Wisconsin businesses may need to get a license or permit to operate within the state, though there’s no universal standard that all businesses must adhere to. If you want to know whether your business is required to have state-level licensure, use Wisconsin’s "one stop" business portal to find out. Industries like healthcare, transportation, and gambling can expect to require at least some special licensure.
In addition to state-level licenses and permits, you may be required to have additional certification in your local area (i.e., your city or county). Because there are literally thousands of potential permits, we can’t possibly cover them all here. Your best course of action is to visit your local Chamber of Commerce, and talk to an authority there about what paperwork you’ll need to fill out.