The difference between an EIN and a UBI comes down to jurisdiction: an Employer Identification Number is a nine-digit federal tax ID issued by the IRS and used nationwide, while a Unified Business Identifier is a nine-digit number issued by Washington State’s Department of Revenue and used only within Washington.1Internal Revenue Service. About Form SS-4, Application for Employer Identification Number (EIN)2Washington Department of Revenue. Business Licensing and Renewals FAQs They answer to different agencies and serve different functions, and most businesses operating in Washington need both.
What an EIN Does
The IRS assigns EINs to businesses, nonprofits, trusts, estates, and other entities for tax filing and reporting.1Internal Revenue Service. About Form SS-4, Application for Employer Identification Number (EIN) It identifies your entity on federal tax returns, payroll filings, and most financial paperwork. Think of it as a Social Security number for the business.
You need one if you:
- Hire employees
- Operate as a corporation, partnership, LLC, or nonprofit
- File excise or employment taxes
- Administer a trust, estate, or retirement plan
The IRS lists these triggers on its EIN guidance page.3Internal Revenue Service. Employer Identification Number
A sole proprietor with no employees can use a Social Security number instead of an EIN for federal tax purposes. Many get an EIN anyway so they aren’t handing out their SSN to clients and vendors, and most banks require one to open a business checking account.
What a UBI Does
Washington’s Unified Business Identifier is issued when you register a business with the Department of Revenue. It functions as your business license number, state tax registration number, and general state identifier at the same time, tying you to several state agencies through a single number.2Washington Department of Revenue. Business Licensing and Renewals FAQs
If you’re not in Washington, you won’t be issued a UBI. Every state assigns some form of business identifier when you file formation documents with the Secretary of State or equivalent agency, but the labels change. You may see “Entity Number,” “Filing Number,” “Business ID,” “Charter Number,” or “SOS Number.” Some states issue a separate state tax ID through their Department of Revenue in addition to the registration number from the Secretary of State, so you can end up with two state-level identifiers rather than one. Washington’s innovation with the UBI was consolidating those into a single number.
EIN vs. UBI: The Practical Differences
Four distinctions matter in day-to-day terms.
Who issues it. The IRS issues EINs. State agencies — the Secretary of State, the Department of Revenue, or both — issue state identifiers like Washington’s UBI.
What it covers. An EIN handles federal taxes, payroll reporting, and banking. A UBI or equivalent state ID handles state taxes, business licensing, and state regulatory filings.
What it costs. An EIN is free directly from the IRS.4Internal Revenue Service. Get an Employer Identification Number State registration fees vary, typically running from about $35 to $500 depending on entity type and state.
Where it works. One EIN works nationwide because federal tax law is uniform. A state identifier works only in the state that issued it. Expand into another state and you’ll register there and receive another state-level number, but your EIN stays the same.
Do You Need Both?
In almost every case, yes. The EIN connects you to the IRS; the state identifier connects you to your state’s tax, licensing, and reporting systems. Neither one substitutes for the other, and most state registration forms ask for your federal EIN as part of the application, so get the EIN first.
The narrow exception on the federal side is the sole proprietor with no employees who’s willing to use a Social Security number for tax purposes. Even then, state registration is still typically required to operate legally within the state.
How to Get an EIN
The IRS does not charge for an EIN, and the fastest route is the online application. You can complete it in one sitting and receive the number immediately on finishing.4Internal Revenue Service. Get an Employer Identification Number To use it, your principal place of business must be in the United States or a U.S. territory, and the responsible party must have a valid Social Security number or ITIN.
You’ll need the entity’s legal name, physical and mailing addresses, entity type, and reason for applying, along with the responsible party’s name and taxpayer identification number.5Internal Revenue Service. Instructions for Form SS-4 (12/2025) The responsible party is whoever controls or manages the entity’s funds and assets, such as a president, general partner, or sole owner.
If you can’t apply online, you can submit Form SS-4 by fax and receive your EIN in about four business days, or mail it in and wait roughly four weeks. International applicants whose principal place of business is outside the United States cannot use the online tool and must apply by phone, fax, or mail.5Internal Revenue Service. Instructions for Form SS-4 (12/2025)
Websites that charge you to “get your EIN” are reselling a free government service. The IRS emphasizes that you should never pay a fee for an EIN.4Internal Revenue Service. Get an Employer Identification Number If a URL doesn’t end in .gov, you’re not on the IRS site.
How to Get a UBI or Other State Identifier
The process varies by state, but the pattern is consistent. You file formation documents with the Secretary of State or equivalent office, and the agency assigns a registration number upon approval. Common formation documents include articles of incorporation for corporations, articles of organization for LLCs, and certificates of limited partnership for limited partnerships.
Most states also require you to register separately with the state’s Department of Revenue or tax agency, particularly if you plan to hire employees or collect sales tax. That step often generates a second state-level number. Washington folds this into the UBI; other states issue them separately.
Beyond the EIN, expect to provide your business name, registered agent’s name and address, principal office address, and the names of owners, officers, or members. Many states offer online filing portals. Processing times range from same-day to several weeks depending on the state and whether you pay for expedited handling.
Getting the identifier is just the start. Most states require an annual or biennial report to keep your registration active, and those reports carry filing fees. A handful of states charge nothing for ongoing reports; others charge several hundred dollars per year. Fall behind on these filings and your entity can be administratively dissolved, which means losing the legal protections that come with your business structure.
What Happens If You Skip Either One
Operating without identifiers you’re required to have causes problems on both sides, and they compound.
On the federal side, if you’re required to include a taxpayer identification number on a filing and you don’t, the IRS can impose a penalty of $50 per missing number, up to $100,000 in a single calendar year.6Office of the Law Revision Counsel. 26 U.S. Code 6723 – Failure to Comply With Other Information Reporting Requirements Beyond the direct penalty, basic things stop working: banks won’t open business accounts without an EIN, and you can’t file payroll taxes or issue W-2s to employees.
On the state side, consequences typically include being barred from filing lawsuits in state courts, owing back fees and penalties for every year you operated without registering, and potential enforcement action by the state attorney general. Specifics vary by state, but the longer you wait, the more expensive the catch-up becomes.