It is a well known fact that a business entity’s Federal tax identification number – also called the employer identification number or “EIN” – is the “social security number” for the entity. Whether it be opening a bank account, entering into certain contracts (such as with a state agency), or to obtain payment for work done per a contract (for which an IRS Form 1099 is issued), the business must provide its EIN as a prerequisite.
What is not so well known, however, is under what circumstances does a Minnesota business entity need to obtain a state tax identification number. In contrast to the Federal EIN, every business entity does not need to obtain a Minnesota tax identification number. A Minnesota identification number is required if an entity:
• Makes taxable sales or leases in Minnesota;
• Performs taxable services in Minnesota;
• Withholds Minnesota income taxes from employees’ wages;
• Makes estimated business tax payments;
• Files a Minnesota corporation franchise, S corporation, partnership or unrelated business income tax return;
• Files fiduciary income tax returns as an estate, trust or personal representative;
• Files or pays MinnesotaCare taxes or special taxes, such as insurance premium, petroleum, alcohol or tobacco taxes;
• Is a vendor of goods or services to a state government agency or to a business receiving payments from a state agency;
• Has use tax to report; and/or
• Has solid-waste management (SWM) taxes to report.
In order to obtain a Minnesota tax identification number, the entity must complete and file Form ABR with Minnesota Revenue. The instructions to Form ABR provide detailed descriptions of the various tax types and the circumstances which necessitate the Form ABR filing.