How to Get a VAT Number in the USA (The US Equivalent)

The United States does not operate under a Value Added Tax (VAT) system, so there is no direct federal “VAT number” issued. Instead, the U.S. tax system relies on a combination of federal and state-level taxes. For federal tax purposes, businesses typically use an Employer Identification Number (EIN). When it comes to consumption taxes, businesses selling taxable goods or services generally need to register for state-specific sales tax permits. Understanding these identification numbers and registration processes is important for businesses operating within the U.S. tax framework.

Understanding the Employer Identification Number

An Employer Identification Number (EIN), also known as a Federal Tax Identification Number, is a unique nine-digit identifier assigned by the Internal Revenue Service (IRS). This number functions similarly to a Social Security Number for individuals, allowing the IRS to identify businesses for tax reporting purposes. Businesses generally need an EIN to manage their taxes, open business bank accounts, and apply for business licenses.

An EIN is required for businesses with employees, corporations, partnerships, or those filing employment, excise, or alcohol and tobacco taxes. Trusts, estates, and tax-exempt organizations also need an EIN. Even sole proprietorships and single-member LLCs, which might otherwise use the owner’s Social Security Number, may choose to obtain an EIN for banking purposes, to establish business credit, or to safeguard against identity theft.

Application information includes the legal name, mailing address, entity type (e.g., sole proprietorship, partnership, corporation, or LLC), and reason for applying (e.g., starting a new business or hiring employees). The “responsible party” is the individual who controls, manages, or directs the entity and its assets; their Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN) is required. Businesses also need to provide their principal business activity and the date the business started or was acquired.

The online application is generally the fastest and most common method for domestic applicants, often providing the EIN immediately upon completion. This online tool is available during specific hours, typically Monday through Friday. Form SS-4, Application for Employer Identification Number, can be submitted by fax or mail. Faxing Form SS-4 can result in receiving the EIN within approximately four business days, while mailing the form may take around four weeks. International applicants without a U.S. SSN or ITIN can apply for an EIN by telephone by calling the IRS. This phone application process allows the IRS representative to complete the Form SS-4 information over the call, and the EIN is typically issued immediately.

State Sales Tax Registration

Sales tax in the United States is a tax levied at the state and sometimes local levels, rather than a federal value-added tax. Businesses are generally required to collect and remit sales tax in states where they have a sufficient connection, known as “nexus.” Nexus can be established through physical presence (e.g., an office, employees, or inventory) or economic activity (meeting sales revenue or transaction volume thresholds). The specific thresholds for economic nexus vary significantly by state.

Businesses that sell tangible personal property are typically subject to sales tax collection requirements, and some states also tax specific services. To register for sales tax, businesses generally need to provide their federal Employer Identification Number (EIN). Other common information requested includes the legal business name and address, business structure, and owner or officer information. Details about the type of business activity and anticipated sales volume may also be required.

The process for registering for a sales tax permit varies by state, but it typically involves applying online through the state’s Department of Revenue or an equivalent tax authority website. Businesses must register in each state where they have established nexus and are required to collect sales tax. Some states may also require additional local registrations, and some impose a fee for the permit, while others do not. It is important for businesses to consult the official website of each relevant state’s tax authority for specific instructions and forms.

Other Relevant Business Identification Numbers

Beyond the federal Employer Identification Number (EIN) and state sales tax registrations, businesses in the U.S. might encounter other specialized identification numbers depending on their operations. Businesses involved in importing goods into the U.S., for instance, often use their EIN as their Importer of Record number for customs purposes. This number facilitates the clearance of goods through U.S. Customs and Border Protection.

States may also issue additional unique tax identification numbers for specific purposes beyond sales tax. These can include numbers for payroll tax withholding, which are required for businesses with employees to remit state income tax withholding and unemployment insurance contributions. Businesses subject to state-specific excise taxes on certain goods or activities, such as fuel or tobacco, may also need to obtain a distinct state tax ID for those obligations. While these numbers are less universally applicable than the EIN or sales tax permits, they are necessary for compliance within their specific operational contexts.