Texas tax ID number: the EIN, the Texas taxpayer number, and which one your company needs

Ask for a "Texas tax ID" and you get two answers. The IRS gives your company a federal Employer Identification Number. The Texas Comptroller gives it an 11-digit taxpayer number. They are different numbers for different purposes, and if you run a Texas company from Europe you will use both. Here is which is which, how you get each one without a US Social Security number, and where each one goes.

Two tax IDs from two agencies

The federal government and the State of Texas tax your company separately, and each keeps its own register. That is why a Texas LLC or corporation ends up with two tax numbers, plus a few other identifiers that people confuse with them.

The short version: the IRS knows your company by its EIN, Texas knows it by its taxpayer number, and neither number replaces the other.

The EIN: the number the IRS and your bank ask for

The EIN is the federal tax ID number for businesses and other entities. Your LLC or corporation needs it for its federal returns, for Form 5472 if it is foreign-owned, and for practically every US bank account application. The IRS charges nothing for it.

The online application is closed to most European owners. It works only if the responsible party has a Social Security number or an ITIN and the company's principal place of business is in the United States. The responsible party is the person who ultimately owns or controls the company, normally you.

Without an SSN or ITIN, you apply with Form SS-4 in one of three ways:

• By phone at +1 267-941-1099 (not a toll-free number), Monday to Friday from 6:00 a.m. to 11:00 p.m. Eastern time. This route is for international applicants only.
• By fax to +1 304-707-9471 from outside the United States. The IRS says you will generally receive the EIN by fax within 4 business days.
• By mail to Internal Revenue Service, Attn: EIN International Operation, Cincinnati, OH 45999. Expect about 4 weeks; the IRS advises filing 4 to 5 weeks before you need the number.

On line 7b, where the form asks for the responsible party's SSN or ITIN, you enter "foreign" or N/A if you have neither and cannot get one. You do not need an ITIN to get your company's EIN. If your single-member LLC is wholly owned by you as a foreign person, the instructions tell you to check "Other" on line 9a and write "Foreign-owned U.S. disregarded entity-Form 5472".

Three rules worth knowing: the IRS issues only one EIN per responsible party per day; an EIN cannot be cancelled, only deactivated; and a new company name, address or responsible party does not need a new EIN, while a change of ownership or structure generally does.

The Texas taxpayer number: the Comptroller's 11 digits

You do not apply for the Texas taxpayer number the way you apply for an EIN. When the Secretary of State registers your new Texas LLC or corporation, the Comptroller sets up a franchise tax account for it from the information the Secretary of State passes on. The Comptroller then mails a letter with the company's Texas taxpayer ID number and a Webfile number that begins with FQ.

With those two numbers you complete the Franchise Tax Accountability Questionnaire online. Newly registered Texas corporations, LLCs, limited partnerships and professional associations must use the online version. From then on the 11-digit number is preprinted on the Comptroller's forms for your company and cannot be changed.

The letter comes by post. If you live in Europe, make sure someone in the United States receives your company's mail, otherwise the first thing you hear from Texas may be a reminder. Our guide to a US business address for a company run from Europe covers the options.

You use the Texas taxpayer number for everything the Comptroller handles: the annual franchise tax report and Public Information Report, your Webfile account and the franchise tax account status. The Comptroller's account status search accepts either the 11-digit Texas number or the 9-digit federal EIN.

How a new business gets a Texas tax ID number

The route to a Texas tax ID number depends on what your business is and what it does in Texas. A new Texas LLC or corporation gets its number without applying, as described above. Everyone else gets it in one of two other ways, and the number that comes out of each is the same kind of thing: the 11-digit Texas taxpayer number under which you report taxes and fees to the Comptroller.

A company formed in another state that registers in Texas

If your company was formed outside Texas, for example in Delaware or Wyoming, and registers with the Texas Secretary of State to do business in Texas, the Comptroller sets up a franchise tax account for it from the Secretary of State's information, just as it does for a Texas company. The Comptroller lists non-Texas corporations and limited liability companies newly registered with the Secretary of State among the entities that receive the letter and complete the Franchise Tax Accountability Questionnaire online. For a non-Texas entity the questionnaire does one more job: it establishes the date its Texas tax responsibility begins and when its first franchise tax report is due.

A business that sells in Texas: the sales tax permit application

The second route is the application for a Texas sales tax permit. You need a permit if your business is engaged in business in Texas and sells or leases tangible goods there or sells taxable services, and also if it sells into Texas from out of state with Texas revenue of $500,000 or more in the past 12 months. Our sales tax guide explains when that applies to you.

The Comptroller's online registration is closed to many European owners: you cannot use it if a sole owner, partner, officer or director has no Social Security number. In that case you file Form AP-201, the Texas Application for Sales Tax Permit and/or Use Tax Permit, and send it to the Comptroller by email or by fax to 512-936-0010; the registration page gives the email address. The form has a box to tick if you do not have a federal EIN, and the Comptroller confirms that an application can go in without one. It also asks for any current or past 11-digit Texas taxpayer number, so a company that already has its number from the franchise tax letter enters it there. There is no fee for the permit, although the Comptroller may require a security bond. Allow two to three weeks for the permit to arrive; the letter that follows the approval tells you whether you file monthly or quarterly.

Sole proprietors

A sole proprietorship that is not organized in a form that limits liability is not subject to the franchise tax, so it never receives the franchise tax letter. A sole proprietor usually gets a Texas taxpayer number by registering for a tax the Comptroller collects, most often through the sales tax permit application, which has its own section for sole proprietors. A single-member LLC is different: even if it files as a sole proprietor for federal purposes, Texas treats it as a taxable entity and it gets its number through the Secretary of State route.

Finding your Texas taxpayer number later

The number is on the Comptroller's first letter and is preprinted on the forms the Comptroller sends your company afterwards. If you cannot find it, the Franchise Tax Account Status Search lets you look up an entity by its name, its Secretary of State file number, the 11-digit Texas number or its federal EIN. Keep the Webfile number apart from it: that is an access code of two letters and six digits, printed in the upper left corner of the reports the Comptroller mails and on most notices, and it is not a tax ID. When you call the Comptroller about sales tax, have the 11-digit taxpayer number ready.

Which number goes where

If a form just says "tax ID", look at who publishes it. A federal form or a bank wants the EIN. A form from the Texas Comptroller wants the 11-digit taxpayer number. Sales tax is a separate registration with its own rules; our sales tax guide explains when your company needs it.

The ITIN: only when you personally need a US tax number

The ITIN is a 9-digit number the IRS issues to people who have a federal tax purpose but are not eligible for a Social Security number. It is a personal number, not a company number. It does not authorize you to work in the United States and does not qualify you for Social Security benefits.

You apply for it together with the tax return that needs it, on or before that return's due date, or at any time with a return for a prior year. For most European owners the question arises only when they file a US return of their own. Our ITIN Express service handles that application. For the company's EIN you do not need one.

The order of things for a Texas company owned from Europe

• Formation. The Secretary of State files your certificate of formation and your company gets its SOS file number.
• The Comptroller's letter. Your Texas taxpayer number and FQ Webfile number arrive by post; you complete the franchise tax questionnaire online.
• The EIN. You apply with Form SS-4 by fax or phone, without an SSN or ITIN.
• The bank account. With the EIN in hand you can open the company's US account. Our US bank account opening service covers that step.
• Sales tax, if it applies. If your company sells taxable goods or services in Texas, it applies for a sales tax permit; without a Social Security number among the owners and officers, that is Form AP-201 by email or fax.
• The first Texas report. It is due on May 15 of the year after your company became subject to the franchise tax, even if no tax is owed.

When we form your Texas LLC, the EIN is part of the formation package. If your company already exists and only the EIN is missing, we apply for it on its own.