Obtain a Tax ID (EIN) Number and Register Your Business in West Virginia
If you want to start a business in West Virginia, you should know there are a handful of legal and logistical requirements you’ll need to meet first. West Virginia is a potentially valuable state for entrepreneurs to start their small businesses. Major cities like Charleston and Morgantown have thriving entrepreneurial and economic hubs, but you can also find welcoming communities outside the major metropolitan areas. West Virginia is currently home to 114,391 small businesses, which together represent 98.9 percent of all businesses in the state. These businesses collectively employ more than 280,000 people in the state, representing 49.6 percent of the West Virginia workforce.
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Steps to Obtaining a Tax ID (EIN) Number and Registering a West Virginia Business
- Forming a Business in West Virginia
- Federal Tax ID (EIN) Number Obtainment
- West Virginia State Tax ID Number
- Localized Licenses and Permits in West Virginia
1. Forming a Business in West Virginia
Before you choose a business structure for your business, you’ll want to spend time considering your priorities as a business. For example, you’ll want to decide how you plan on expanding and what type of products you want to sell or services you want to conduct. Sole proprietorships, partnerships, limited liability companies (LLCs), and corporations are all possibilities, but there are a variety of factors you’ll need to consider before pulling the trigger.
First, you might consider the complexity and purpose of each business type. Sole proprietorships and partnerships are practically the same; they’re designed with small businesses in mind, and are very simple to create and maintain over time. LLCs are slightly more complicated, and in West Virginia, you’ll need to file an annual report for yours with a fee of $25. Corporations can be very complex to create and manage, since they’re subject to so many rules and regulations. These are designed for businesses that want to scale, as they can raise funds by issuing public shares.
You could also consider the tax advantages of each business type. In sole proprietorships and partnerships, you’ll simply pay taxes as individuals on any money you make from the enterprise. LLCs are considered pass-through entities; they won’t pay taxes on income, but you’ll pay taxes on any salary or profits you make from the company. Corporations, however, pay taxes on eligible income, and you’ll also pay taxes as an individual on money you make from the business, resulting in double taxation. In West Virginia, the corporate tax rate only applies to C-corporations, and is a flat rate of 6.5 percent.
Finally, you’ll want to consider the potential liability you could face. In sole proprietorships and partnerships, you’ll take on all debts as an individual, and will be personally liable for actions you take for the business. LLCs provide some degree of liability protection, since they’re considered separate legal entities; they can take on debts and be held liable for business actions. Corporations provide significant liability protection.
There isn’t a right or wrong business structure; you have to choose what’s right for your specific circumstances and goals.
2. Federal Tax ID (EIN) Number Obtainment
Your business will likely require a federal tax ID number, sometimes called an employer identification number (EIN). This is a 9-digit, unique number assigned to your business when you register it with the federal government. You’ll need one under several different circumstances. For example, it’s a necessary number if your business has multiple members. You’ll also need one if you plan on hiring any employees. Most financial institutions will require you to have a federal tax ID if you’re applying for any business-related financial products, like bank accounts, loans, or lines of credit. Federal tax ID numbers are also required for businesses filling out paperwork to get a license or permit, regardless of whether it’s at a state or local level. It’s also necessary to get your West Virginia state tax ID number, a separate tax ID number your business may also need. Even if you don’t officially “need” a federal tax ID number, it’s good to get one in case you need it in the future.
You can obtain your federal tax ID number in less than an hour by utilizing our federal tax ID number obtainment services. All you need to do is answer a few questions about your business using our online application. Afterward, we’ll send you your tax ID number via email within an hour.Apply for a West Virginia Tax ID Number
3. West Virginia State Tax ID Number
Your business will likely need a West Virginia state tax ID number as well. This number is required for West Virginia businesses that hire employees in the state. It’s also necessary if you’re selling taxable goods and services in the state, and if you’ll owe excise taxes on regulated goods like gasoline, alcohol, and tobacco. You’ll need a federal tax ID number before you can obtain this state-level ID number. The vast majority of West Virginia businesses will end up needing both a federal-level EIN and a state-level West Virginia state tax ID number.
Use our West Virginia state tax ID number obtainment services to make things easier on yourself. Once you have your federal tax ID, you can answer a few questions on our online questionnaire and receive your state tax ID in 4 to 6 weeks.
4. Localized Licenses and Permits in West Virginia
West Virginia has a generic business license that’s required for all businesses, issued by the state. However, this may not be the only license you need. Additional requirements for business licenses and permits vary tremendously from industry to industry and from location to location. Most license requirements are dictated at the local level, rather than the state level, which makes it difficult to concisely explain which licenses or permits you may need. Talk to someone at your local Chamber of Commerce to learn more about the specific requirements in your area, and make sure you have your federal tax ID number ready, in case you need to apply for a license or permit there.
The sooner you start your business, the sooner you can start generating revenue. Make the process faster and easier by utilizing our federal tax ID number and/or West Virginia state tax ID number obtainment service today.