Business Xpress Startup Toolkit Step 3 - Tax Numbers

Summary

The Oregon Secretary of State Corporation Division's video series guides entrepreneurs through the business startup process, emphasizing the importance of obtaining tax ID numbers. It explains how to acquire a federal EIN from the IRS, which is essential for opening a business bank account, and a BIN for Oregon payroll tax, necessary for businesses with employees or corporations. The video also advises on local tax ID requirements and the importance of consulting professionals for tax-related queries.

Takeaways

• 📚 The video series is a guide for starting a business in Oregon, complementing the Business Xpress Startup Toolkit.
• 🔢 The third step in the business startup process is obtaining tax ID numbers.
• 🇺🇸 Businesses in Oregon might need a federal tax ID number, known as an Employer Identification Number (EIN).
• 💻 An EIN can be obtained for free from the IRS website by following the 'apply for an EIN' links or search.
• ⏱ The online application process for an EIN typically takes about 30 minutes.
• 🏦 Most banks require an EIN to open a business banking account, although some sole proprietorships may use a social security number.
• 🔑 Another tax ID number is the Business Identification Number (BIN), primarily used for Oregon payroll tax.
• 📋 BINs are issued by the Oregon Department of Revenue and other agencies, and are necessary for businesses with employees or registered corporations.
• 📈 Businesses with a BIN must file quarterly and annual reports to multiple agencies regarding their employees.
• ⚠️ Failure to respond to the Department of Revenue's payroll notices can result in assessed estimated payroll taxes.
• 🏙️ Some cities in Oregon may require a city business license and a city tax number to operate within their limits.
• ℹ️ It is advisable to consult with an attorney or accountant for tax-related questions or to contact the relevant tax-issuing agency.

Q & A

What is the purpose of the Start a Business video series produced by the Oregon Secretary of State Corporation Division?

The video series is designed to help individuals understand the steps involved in starting a business in Oregon and supplements the Business Xpress Startup Toolkit found online.

What are the two primary tax numbers that businesses might need in Oregon?

The two primary tax numbers are a federal tax ID number (Employer Identification Number, or EIN) and a Business Identification Number (BIN).

How can a business obtain an EIN, and is there any cost associated with it?

An EIN can be obtained for free by visiting irs.gov and following the links or searching for 'apply for an EIN'. The process takes about 30 minutes and provides the EIN immediately.

Why might a business need an EIN?

Most banks require an EIN to open a business banking account, and it is necessary for businesses that are not sole proprietorships.

What is a BIN, and why would a business need one?

A BIN is used primarily for Oregon payroll tax and is required by multiple state departments for businesses that plan on having employees or registering as a corporation.

What obligations come with obtaining a BIN?

Once a BIN is obtained, the business is obligated to file quarterly and annual reports to multiple agencies about their employees.

What are the consequences of not responding to Department of Revenue quarterly payroll notices?

Businesses that fail to respond may have estimated payroll taxes assessed by the Department of Revenue.

Do all cities in Oregon require a business to have a city business license?

Not all cities require a business license, but some do. It's important to check with the city government to find out their specific requirements.

What should a business do if they have questions about taxes?

It's recommended to contact an attorney or accountant for questions about taxes, or to reach out to the agency that administers the tax in question.

What additional resources are available for those starting a business in Oregon?

The Business Xpress Startup Toolkit found online and the Start a Business video series are available for more information.

Can a sole proprietorship use a Social Security Number instead of an EIN?

Yes, some sole proprietorships may substitute a Social Security Number for an EIN, depending on the circumstances.

Outlines

00:00

📘 Starting a Business in Oregon: Tax ID Numbers

This paragraph introduces the third step in starting a business in Oregon, which is obtaining tax ID numbers. It explains the necessity of a federal tax ID number, also known as an Employer Identification Number (EIN), which can be acquired free of charge from the IRS website in approximately 30 minutes. The EIN is essential for opening a business banking account, although some sole proprietorships may use a social security number instead. The paragraph also discusses the Business Identification Number (BIN), which is primarily used for Oregon payroll tax and is required for businesses with employees or those registered as a corporation. It highlights the obligations of filing quarterly and annual reports to various agencies once a BIN is obtained. Additionally, it mentions the potential need for a city tax number if operating within specific city limits and advises consulting with an attorney or accountant for tax-related questions.

Keywords

💡Business

A business refers to an organization or entity engaged in commercial, industrial, or professional activities. In the video, the theme revolves around the process of starting a business in Oregon, highlighting the various steps and requirements involved.

💡Oregon Secretary of State Corporation Division

This is the governmental body in Oregon responsible for overseeing the incorporation of businesses and ensuring compliance with state laws. The video series is produced by this division to guide entrepreneurs through the business startup process in Oregon.

💡Tax ID Numbers

Tax ID numbers are unique identifiers used by businesses for tax purposes. The video explains that businesses in Oregon may need to obtain two primary tax numbers: a federal tax ID number (EIN) and a Business Identification Number (BIN).

💡Employer Identification Number (EIN)

An EIN is a unique nine-digit number assigned by the IRS to businesses for tax purposes. The video mentions that an EIN is essential for opening a business banking account and is obtained free of charge through the IRS website.

💡IRS

The Internal Revenue Service (IRS) is the U.S. government agency responsible for tax collection and administration. In the context of the video, the IRS is the entity from which businesses apply for an EIN.

💡Business Identification Number (BIN)

A BIN is a tax ID number specific to Oregon, used primarily for payroll tax purposes. The video explains that a BIN is required for businesses planning to have employees or register as a corporation.

💡Oregon Department of Revenue

This department is responsible for the administration of tax laws in Oregon. The video mentions that BINs are used by this department, along with other agencies, for payroll tax purposes.

💡Oregon Employment Department

This department oversees employment-related matters in Oregon, including the administration of workers' compensation insurance. The BIN is used by this department as mentioned in the video.

💡Department of Consumer and Business Services

This department in Oregon administers workers' compensation insurance among other consumer protections. The BIN is relevant to this department as highlighted in the video.

💡Quarterly and Annual Reports

These are periodic financial and operational updates that businesses are required to file with various agencies. The video specifies that businesses with a BIN must file these reports regarding their employees.

💡City Business License

A city business license is a permit required by some local governments for businesses to operate within their jurisdiction. The video advises checking with city governments for specific requirements, including the potential assignment of a local tax ID number.

💡Attorney or Accountant

These are professionals who can provide legal or financial advice. The video suggests contacting an attorney or accountant for questions regarding taxes, emphasizing the complexity of tax-related matters in business startups.

Highlights

Introduction to the Start a Business video series by the Oregon Secretary of State Corporation Division

Purpose of the video series to assist in understanding business startup steps in Oregon

Supplemental resource: Business Xpress Startup Toolkit available online

Third step in business startup is obtaining tax ID numbers

Two primary tax numbers for businesses in Oregon: Federal Tax ID and Business Identification Number

Federal Tax ID Number, or EIN, can be obtained free of charge from the IRS

Applying for an EIN online takes approximately 30 minutes

Most banks require an EIN to open a business banking account

Sole proprietorships may use a social security number instead of an EIN

Business Identification Number, or BIN, used for Oregon payroll tax

BIN required by multiple state departments for payroll and workers' compensation

Businesses need BIN if planning to have employees or register as a corporation

Obligations of filing quarterly and annual reports after obtaining a BIN

Consequences of failing to respond to Department of Revenue payroll notices

Local city requirements for business registration and city tax number assignment

Advice to contact professionals for tax-related questions or issues

Invitation to watch other Start a Business videos for more information

Transcripts

Welcome to the Start a Business video series produced by the Oregon Secretary of State Corporation Division.

This video series is designed to help those starting a business in Oregon understand the steps involved,

and supplements the Business Xpress Startup Toolkit found online.

The third step in starting your business involves getting your tax ID numbers.

There are two primary tax numbers that businesses might need in Oregon.

One is a federal tax ID number or Employer Identification Number. EIN for short.

An EIN can be obtained from the IRS.

The best way to get an EIN is by visiting

irs.gov and

following links or searching for "apply for an EIN".

EINs are free. The process to apply for one takes about 30 minutes and at the end of the online process

you get your EIN without any processing time.

Most banks require an EIN to open a business banking account.

Some sole proprietorships may substitute a social security number.

The second common tax ID number is a Business Identification Number or BIN

BINs are used primarily for Oregon payroll tax and are used by the Oregon Department of Revenue,

the Oregon Employment Department, and the Department of Consumer and Business Services,

which in Oregon administers workers' compensation insurance.

A business only needs to get BIN number if they plan on having employees or register as a corporation.

Once you get a BIN you're obligated to file quarterly

and annual reports to multiple agencies about your employees.

Businesses who fail to respond to Department of Revenue quarterly payroll notices

may have estimated payroll taxes assessed.

Some local cities require businesses to register or obtain

a city business license in order to operate within city limits.

These cities may assign a city tax number to a business.

Check with your city government to find out what their requirements are and if they assign a local tax ID.

It's always a good idea to contact an attorney or accountant

if you have questions about taxes, or contact the agency that administers

the tax you have questions about.

Thanks for watching, and check out our other Start a Business videos for more information.