Obtain a Tax ID (EIN) Number and Register Your Business in Utah
Utah is home to hundreds of thousands of entrepreneurs. More than 99 percent of all businesses in Utah are small businesses, totaling 227,140 as of 2018. Together, those businesses employ more than 557,000 people or 46.3 percent of the state’s total workforce. Last year, those small businesses created nearly 30,000 net new jobs, driving significant economic growth throughout the state. Utah also has the fastest-growing labor force of any state and has held that honor since 2010. Its economic growth rate exceeds the national average, and unemployment remains below national average levels. No matter where you choose to start your business in the state, you’ll likely find a community of similarly-minded small business owners willing to support you. This is especially true in urban hubs like Salt Lake City and Ogden.
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Steps to Obtain a Federal EIN Number and Registering a Utah Business
- Forming a Business in Utah
- Federal Tax ID (EIN) Number Obtainment
- Utah State Tax ID Number
- Localized Licenses and Permits in Utah
1. Forming a Business in Utah
There are multiple business structures to choose from, each with specific advantages and disadvantages for the entrepreneurs that use them. Let’s get started, consider one of the following common business structures:
- Sole proprietorships and partnerships. Sole proprietorships are the easiest businesses to start, and definitely the easiest to understand. They work best for individuals launching a small operation with no aspirations for long-term expansion. You’ll pay taxes as an individual on any income you make, which is straightforward, but you’ll also be exposed to significantly more personal liability. Partnerships are very similar. You’ll be working with multiple people, but the fundamentals are still the same: simplicity, individual taxes, and excessive exposure to liability.
- Limited liability companies (LLCs). LLCs are the next step up. They’re a bit more complex than sole proprietorships and partnerships, but aren’t crazy to deal with. They exist as separate legal entities, which means they protect you from at least some personal liability for business debts and actions. They’re considered pass-through entities, which means they don’t owe taxes on income generated by the business, but you’ll owe taxes as an individual on any salary or profits you collect from the business. In Utah, your LLC will be required to file an annual report. The filing fee is a mere $15, though you may owe a penalty if you miss the deadline for filing.
- Corporations. Corporations are the bulkiest and most complex business structure to consider. They’re ideal for large businesses, especially those with a national footprint, because they have the option to raise funds with publicly issued shares. They’re subject to many additional rules and regulations, but they exist as separate legal entities and provide a strong degree of liability protection. The biggest downside to corporations is that you’ll usually end up double-taxed; you’ll pay taxes on any corporate income, then pay taxes as an individual on any salary or profits you take from the business. The corporate tax rate for Utah corporations is a flat 5 percent, with a minimum tax of $100.
It’s possible to update your business structure after a period of time, but try to choose the best long-term structure from the beginning.
2. Federal Tax ID (EIN) Number Obtainment
There are several conditions that will force your Utah business to get a federal tax ID number. This is a unique identifying number, 9 digits long, issued by the federal government when you register a business. It’s also sometimes called an employer identification number, or EIN. You’ll need this if your business has multiple members, like if it’s a partnership, LLC, or corporation. You’ll also need it if you’re going to hire employees, if you’re opening a business bank account, or if you’re applying for business credit.
The faster and easier you obtain this number, the sooner you can start your business. If you use our federal tax ID number obtainment services, you can apply online. All you’ll have to do is answer a few questions about your business, and you’ll receive your federal tax ID via email in less than an hour.Apply for a Utah Tax ID Number
3. Utah State Tax ID Number
Your Utah state tax ID number is another unique identifying number, only this one applies at the state level. You’ll need one under several conditions, like if you’re going to sell taxable goods and services in the state of Utah, if you’re going to hire Utah employees, or if you’re going to owe excise taxes on certain types of regulated goods.
If you need a Utah state tax ID number, your first step should be getting a federal tax ID number. Once you have that, make use of our Utah state tax ID number obtainment services. You can fill out the application online, and get your state tax ID number in 4 to 6 weeks.
4. Localized Licenses and Permits in Utah
Not every business in Utah will need a license. There is no central, state-level licensing organization, nor is there only one set of requirements to worry about. Your business may require a license, a permit, or another form of certification, depending on the industry in which you operate and where you’re operating. Most licenses are required at the local level, with your city or country, so you’ll need to consult your local Chamber of Commerce to determine whether your business specifically needs any additional documentation. Note that before you can apply for any business license, you’ll need to have your federal tax ID number in place.
When you’re ready to start your Utah business, you should make the process as easy on yourself as possible. If you use our federal tax ID number obtainment services and our Utah state tax ID number obtainment services, you’ll be able to apply for your tax IDs much more conveniently, and get them faster, so you can make your business a reality as quickly as possible.