An entity ID is a unique number a government agency assigns to identify your business for taxes, regulatory filings, or contracting. The one most businesses encounter first is the federal Employer Identification Number (EIN), issued free by the IRS. Most companies also need at least one state-level number, and any business that wants to bid on federal contracts needs a separate Unique Entity ID from SAM.gov. Which combination applies to you depends on how your business is structured, where it operates, and what it plans to do.
The Federal EIN
The EIN is a nine-digit number the IRS assigns to businesses, tax-exempt organizations, trusts, estates, and similar entities for federal tax purposes.1Internal Revenue Service. Employer Identification Number It functions as a Social Security number for the business, keeping its tax obligations separate from your personal finances. Using an EIN instead of your own SSN on business paperwork also reduces your exposure to identity theft.
You need an EIN if your business is a corporation, partnership, or multi-member LLC, even with zero employees. You also need one if your business hires workers, pays excise taxes, or administers a trust, estate, or retirement plan.2Internal Revenue Service. Get an Employer Identification Number
Single-Member LLCs
Single-member LLCs are the gray area. If the IRS treats yours as a disregarded entity (the default), you can use your own Social Security number for income tax and technically don’t need an EIN, as long as you have no employees and no excise tax obligations. Most single-member owners get one anyway, because banks typically require it to open a business account and some states demand a federal EIN on file.3Internal Revenue Service. Single Member Limited Liability Companies
Once your single-member LLC hires an employee, an EIN becomes mandatory. The LLC must use its own name and EIN for employment tax reporting, even though income tax still flows through to you personally.3Internal Revenue Service. Single Member Limited Liability Companies
How to Get an EIN
The IRS charges nothing for an EIN. Numerous third-party sites will charge $79 to $300 to file the same free application for you. If a site is asking for payment, you’re not on the IRS site.2Internal Revenue Service. Get an Employer Identification Number
Before you start, gather your entity’s legal name, principal address, entity type, and the reason you’re applying. You’ll also need the name and taxpayer ID of the “responsible party” — the individual who ultimately owns or controls the entity, or who exercises effective control over its funds. For most small businesses, that’s the owner. The responsible party must provide a Social Security number or Individual Taxpayer Identification Number (ITIN); government entities may use an EIN instead.4Internal Revenue Service. Instructions for Form SS-4
The fastest route is the IRS online EIN assistant, which issues your number immediately on approval and takes under ten minutes if your information is ready. If you can’t use the online tool, you can submit Form SS-4 by fax (generally four business days) or by mail (typically four to five weeks). The online tool is only available to applicants with a U.S. address; businesses based abroad whose responsible party has no SSN or ITIN can still apply by fax or mail, entering “foreign” or “N/A” on line 7b.4Internal Revenue Service. Instructions for Form SS-4
When a Business Needs a New EIN
Your EIN stays with the business through name changes, address changes, and shifts in ownership percentage. Certain structural changes, though, create a new entity in the eyes of the IRS and require a fresh number.5Internal Revenue Service. Publication 5845 – Do You Need a New Employer Identification Number
- Sole proprietors need a new EIN when incorporating, taking on partners to form a partnership, buying or inheriting an existing business, or entering bankruptcy.
- Corporations need a new EIN when receiving a new charter from the secretary of state, becoming a subsidiary, converting to a partnership or sole proprietorship, or forming a new corporation through a statutory merger.
- Partnerships need a new EIN when incorporating, dissolving so that one partner continues as a sole proprietor, or ending the old partnership and starting a new one.
- Estates and trusts need a new EIN when an estate creates a separate trust with estate funds, when a trust converts to an estate, or when a living trust terminates by distributing property to a residual trust.
A common mistake is assuming that any change requires a new number. Changing your business name, adding a location, or changing your filing status does not. Only structural changes like those above do.5Internal Revenue Service. Publication 5845 – Do You Need a New Employer Identification Number
State-Level Business IDs
Your federal EIN is one piece. Most businesses also need identifiers from the state where they operate, and those come in two distinct flavors issued by two different offices.
State Entity or Registration Number
When you register a corporation or LLC with your state’s secretary of state (or equivalent office), the state assigns a unique entity number tied to your formation documents. You’ll reference it when filing annual reports, amending your articles, or requesting certificates of good standing. The number is assigned automatically during formation, so there’s no separate application. Filing fees for LLC or corporate formation vary widely by state, generally running from about $50 to $500.
State Tax ID
If your business collects sales tax, has employees in a state, or owes franchise tax, you’ll need a separate state tax ID. This one is issued by the state’s department of revenue or tax authority, not the secretary of state. Some states issue the number online within a day; others take several weeks by mail.
For online sellers, the threshold question is whether you have “economic nexus” in a given state. After the Supreme Court’s 2018 decision in South Dakota v. Wayfair, states can require out-of-state sellers to collect sales tax once they exceed a sales threshold in that state, even without any physical presence there. The most common trigger is $100,000 in annual sales, though a handful of states set the bar at $250,000 or $500,000, and some also count the number of individual transactions. If you sell across state lines, you may need tax IDs in several states.
The Unique Entity ID for Federal Contracting
If your business wants to bid on federal contracts or apply for federal grants, you need a Unique Entity ID (UEI). This is a 12-character alphanumeric identifier assigned through SAM.gov, the federal government’s System for Award Management. The UEI replaced the DUNS number for all federal procurement purposes on April 4, 2022, and the option to enter a DUNS number has been removed from SAM.gov entirely.6U.S. General Services Administration. Unique Entity Identifier Update
Getting a UEI is free. You can either complete a full entity registration on SAM.gov, required if you want to bid on contracts or apply for grants directly, or request a UEI only, which is enough if you just need the identifier as a sub-awardee. Full registration asks for detailed business information and can take up to 10 business days to become active, and you’ll need to renew it every 365 days to keep it current.7SAM.gov. Entity Registration A UEI-only request needs only your legal business name and physical address.
Other Identifiers Worth Knowing
DUNS Number
The Data Universal Numbering System (DUNS) number is a nine-digit identifier issued by Dun & Bradstreet that links to your business credit profile. It’s no longer used for federal contracting, but DUNS numbers still matter in the commercial world. Lenders, suppliers, and potential business partners may check your Dun & Bradstreet file when evaluating your creditworthiness. If building business credit is a priority, you may still want one.
Local Registration Numbers
Some cities and counties issue their own business registration or license numbers. These are typically required before you can legally operate within a municipality and are tied to local business taxes and zoning compliance. Requirements vary widely, so check with your city or county clerk’s office.
Beneficial Ownership and the FinCEN Identifier
The Corporate Transparency Act originally required most small businesses formed in the United States to report their beneficial owners to the Financial Crimes Enforcement Network (FinCEN), and created an optional “FinCEN identifier” to streamline that process. In March 2025, FinCEN published an interim final rule exempting all domestically formed companies and their U.S. beneficial owners from this reporting requirement.8Financial Crimes Enforcement Network. Beneficial Ownership Information Reporting The rule now applies only to entities formed under foreign law that have registered to do business in a U.S. state or tribal jurisdiction. If your business was formed in any U.S. state, you do not currently need to file a beneficial ownership report or obtain a FinCEN identifier.