E-commerce businesses in the U.S. need a unique identifying number for banking, taxation, background checks, and more. This unique number is called the Employer Identification Number (EIN) and is issued by the Internal Revenue Service (IRS). Like businesses, non-U.S. citizens who are not eligible to study or work must apply for an Individual Taxpayer Identification Number (ITIN) if they have a tax filing obligation in the U.S. ITIN is also issued by the IRS. However, this number does not grant work authorization or any other immigration benefits, and is useful only for filing taxes.
Applying for both these numbers involves a series of steps, which can be challenging for those not familiar with U.S. taxation laws. This EIn & ITIN Guide for E-commerce Business 2025 walks you through the requirements and the steps you must take to apply and get these numbers.
For further doubts or questions, you may consider consulting international business taxation experts like Manay CPA.
Understanding Tax IDs for E-commerce Business
Every e-commerce business that wants to open a bank account, collect payments, and hire employees must have a tax identification number. Let’s dive into the different identification numbers and what they mean for your business.
EIN vs ITIN Differences
Employer Identification Number (EIN) is for businesses, while Individual Taxpayer Identification Number (ITIN) is for individuals who are not eligible to get a Social Security Number (SSN) due to their visa status or any other reason. They are used to uniquely identify a business or an individual who must report taxes to the IRS. Another key difference is that the EIN never expires, even if it’s not used. On the other hand, ITIN can expire if the individual has not filed taxes at least once in the last three years.
Both numbers are necessary for filing taxes, though EIN is for businesses and ITIN is for individuals. Also, both EIN and ITIN have nine digits each. Another commonality is that these numbers don’t change your immigration status; rather, they only help to uniquely identify an individual or business.
When You Need Each
An EIN is necessary if you have registered a business and want to start operations. This number is mandatory when you have registered your business as a corporation or partnership. Many times, individuals who start a sole proprietorship business also apply for an EIN for privacy.
Similarly, an ITIN is needed by individuals who are not eligible for an SSN and is often a dependant, spouse, or non-resident alien who files taxes. Again, ITIN does not grant work authorization or immigration benefits and is only required for those who have to file taxes.
2025 Requirements
Since these numbers are closely tied to IRS requirements, keep an eye out for changes in the new regime. In particular, experts believe there will be changes to the Tax Cuts and Jobs Act (TCJA).
Knowing the differences between ITIN and EIN enables you to follow the right application process. If you are unsure if you need EIN or ITIN, Manay CPA can help.
Step-by-Step EIN Application Process
Applying for an EIN is free, but you must submit a form with the correct details and follow it up with the required documents. Below is the step-by-step process to apply for an EIN.
Eligibility Criteria
An EIN is required in the following scenarios.
- Operate in the U.S.
- Employ people or plan to hire.
- Operate as a corporation or partnership.
- Withhold taxes on income that’s paid to a non-resident alien.
- Have a Keogh plan.
File any of the below taxes:
- Employment
- Excise
- Alcohol
- Tobacco
- Firearms
Registered as one of the following entities:
- Trusts
- Estates
- Real estate mortgage investment conduits.
- Non-profit organizations.
- Farmers’ cooperatives.
- Plan administrators.
If you fall in any of the above categories, you must apply for an EIN.
Documentation Requirements
Before you apply for an EIN, make sure to gather the following information about your business, as this will ease the application process.
- The legal name of your business, as registered with the concerned state authority.
- Legal name of the applicant. Note that if you do not live in the U.S., you can hire an American agent to act on your behalf.
- The trade name of the company, if you have one.
- The full address of the company.
- Name and SSN/ITIN of the principal person who is filing the EIN.
Once you have all this information ready, you can download the SS-4 form and fill in the corresponding details. You can also directly file the form online.
Application Methods
There are many ways to apply for an EIN. The easiest and fastest option is to fill out the online form, as you will get the EIN right in the same session. Alternatively, you can download the SS-4 form and fax it to 855-641-6935. You will get an EIN within four business days. Another option is to mail the filled-out form to the Internal Revenue Service. Attn: EIN Operation. Cincinnati, OH 45999. This is the slowest, and you can expect your EIN in four weeks.
If you are an international applicant with no legal residence or principal place of business, send the filled-out form to the Internal Revenue Service. Attn: EIN International Operation. Cincinnati, OH 45999. You can also fax it to 855-215-1627.
If you have any trouble with the form, contact Manay CPA, as they have helped thousands of e-commerce businesses get the EIN.
ITIN Application Guide
ITINs are for individuals who must pay their taxes but are restricted due to their visa status or residency conditions. Read on to learn if you qualify for an ITIN and how to apply for one.
Qualification Requirements
ITIN is required by the following individuals.
- A non-resident alien claiming a tax treaty benefit.
- A non-resident filing U.S. taxes.
- A resident alien who files taxes but does not meet the residency status based on the number of days present in the United States.
- The spouse of a resident and non-resident alien who can be claimed as a dependent.
- The spouse of a non-resident alien U.S. visa holder.
Supporting Documents
To apply for an ITIN, you must prove your identity and establish a connection to your native country. IRS accepts the following documents to fulfill the above conditions.
- Passport of your native country. This can be used to prove both identity and foreign status.
- U.S. Citizenship and Immigration Services (USCIS) document with a photo.
- Visa to legally enter the country. It must be issued by the U.S. Department of State.
- Foreign military identification card.
- National identification card, provided it has not expired.
- Foreign voter’s registration card.
- Civil birth certification. This is necessary for applicants below 18 years of age if they don’t have a passport.
- Medical records for dependents who are under six years of age.
- School records for dependents who are below 24 years, provided the individual is still a student.
For proving identity alone, these documents are accepted.
- U.S. driver’s license.
- U.S. military identification card.
- Foreign driver’s license.
- U.S. state identification card.
Along with these documents, fill out a Form W-7 and submit it to the IRS.
Processing Timeline
You can mail the W-7 form and supporting documents through USPS to the Internal Revenue Service. Austin Service Center. ITIN Operation. P.O. Box 149342. Austin, TX 78714-9342. If you plan to use any other delivery service, the address is Internal Revenue Service. ITIN Operation. Mail Stop 6090-AUSC. 3651 S. Interregional, Highway 35. Austin, TX 78741-0000. You can also choose to apply in person.
The IRS takes about seven weeks to notify you about your ITIN application status. Note that it can take from 9 to 11 weeks during the busy tax season or if you are applying from abroad. This time frame is applicable only when all the required documents are submitted correctly. If there are any errors in the form or if the application is incomplete, it may take longer as the IRS will request additional information.
As you can see, providing supporting documents can be challenging, especially if you don’t have a passport. Talk to Manay CPA experts to understand more about the required documents.
Tax Obligations for E-commerce Sellers
The tax obligations for e-commerce sellers can be different at the federal and state levels. Knowing these differences is important to ensure compliance with taxation laws.
Federal Requirements
E-commerce sellers operating in the United States must carefully select their business structure, which can be a sole proprietorship, LLC, or a C-Corp. Depending on the business structure, the tax implications will vary. In general, the following are some key requirements.
- Maintain detailed records of your income and expenses. Consider using accounting software to categorize and organize these records.
- File the annual tax returns in forms that are appropriate to your business type.
- Sole proprietorship – Form 1040
- Partnership – Form 1065
- Corporation – Form 1120. Also, file form 1099-DIV if you are paying dividends to shareholders.
- Employment taxes, if you pay Social Security, Medicare, and Unemployment taxes.
- Pay the necessary taxes.
State Tax Considerations
In the U.S., there is no Value Added Tax (VAT), which means you must pay the sales taxes imposed at the state and local levels. Depending on the state and your business type, you will have to pay one or more of the following taxes.
- Collect and remit sales taxes.
- State income tax.
- Franchise tax (required only in some states).
- Annual report (required only in some states).
Note that e-commerce sellers must have an economic nexus with the state to charge and collect sales tax from customers. This nexus varies across states. Many states enforce economic nexus laws only when you exceed a certain number of transactions or revenue. This economic nexus is applicable even if you don’t have a physical presence in that state.
Moreover, if your business operates in a state that doesn’t charge sales tax, then you don’t have to charge your customers for the same.
Marketplace Facilitator Laws
A marketplace facilitator is a digital service that brings together buyers and sellers. Companies like eBay, Etsy, and Amazon are good examples of marketplace facilitators. Depending on the state, the marketplace facilitator is responsible for collecting taxes on all the products sold through its platform and on behalf of the retail sellers. This money is remitted to the individual sellers, and in turn, they are responsible for filing state taxes.
In some states like Nevada, the marketplace facilitator is not required to collect sales taxes provided they have entered into a written agreement, under which the retailer takes responsibility for collecting and remitting sales taxes. Also, there are thresholds and economic nexuses to determine who should collect.
Since these are confusing and vary greatly among states, it’s best to contact Manay CPA for help with this process.
Common Application Challenges
E-commerce businesses and individual sellers face many challenges when applying for EINs and ITINs. Here are a few common challenges and ways to overcome each.
Non-resident Obstacles
As a non-resident, there are many restrictions that can complicate taxation and business operations. Firstly, you are not eligible to get a Social Security Number (SSN). Though you can apply for an EIN without an SSN, it is a longer process as it involves filling out form SS-4, putting in a responsible person’s name, and more. Also, without an SSN, your processing can take longer, as the IRS authorities have to verify your information.
Similarly, ITIN is for those who are not eligible for an SSN. Since this number is used only for taxation, individuals must exhibit a clear need for it, and this can get complicated.
Documentation Issues
A closely related issue is documentation problems. Many times, you may not have the documents required for an EIN or ITIN, which means you will have to gather other documents to meet the verification requirements. You will also have to get these supporting documents certified by issuing agencies, which, again, can be challenging.
Moreover, you must complete additional forms to prove your identity and establish a need for these numbers. Errors and misspellings in these documents can lead to delays and even rejections.
Solutions & Alternatives
Addressing the above challenges is important to ensure that you have smooth business operations in the U.S. Some alternatives and solutions are:
- Hire experts like Manay CPA, who take responsibility for filling out forms correctly and attaching the appropriate documents to reduce delays and rejections.
- Go to the IRS office in person, check the process, and fulfill all the required formalities.
With a deep understanding of the taxation laws and taking appropriate steps to meet them, foreigners can avoid delays in getting their EIN and ITIN.
Conclusion
To conclude, getting an EIN or ITIN is the first step to starting your entrepreneurial journey in the U.S. However, given your residency status and the required documents, it can be challenging to do it on your own. This is where taxation experts like Manay CPA can help, as they have decades of experience in this field and are on top of the changing requirements.
Secure Your Tax IDs Without Hassle – Let Manay CPA Handle Your EIN & ITIN Applications.
