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Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 7325
Experience:  15years with H & R Block. Divisional leader, Instructor
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I am an online Canadian incorporated business. I want to get

Customer Question

I am an online Canadian incorporated business. I want to get into dropshipping area and the US drop shippers ask for a TAX ID #. Do I need to get one?
Submitted: 1 year ago.
Category: Tax
Expert:  Robin D. replied 1 year ago.

Robin D :

Hello and thank you for using Just Answer,
The drop shippers in the US would be concerned about the sales tax issue that is why they wouldneed your US ID number. If they are a wholesaler, in order to buy from them as a drop shipper, you sometimes need a tax ID number, or resell certificate. The wholesale drop shipper needs to show proof to the government that they can sell to you without charging you a sales tax. All genuine US wholesale drop shippers will ask for a valid US Tax ID.
In order to buy from any US supplier a foreign business needs to apply for an Individual Taxpayer Identification Number (ITIN) with the Internal Revenue Service (IRS). To apply for an Individual Taxpayer Identification Number you cam complete the following IRS application form called W-7.
The drop shipper is effectively the seller, therefore if the buyer is located in the State where the drop shipper is located, you will have to apply Sales Tax for the sale.

Customer :

Then you are saying , even I am a Canadian Incorporated Business, I need to apply for a US Tax ID #. How easy is that granted to Canadians?

Robin D :

It is pretty simple. You can get the ITIN (for yourself) or an EIN for the business. An Employer Identification Number (EIN) is also known as a federal tax identification number, and is used to identify a business entity.
Here is a link to the process
http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/How-to-Apply-for-an-EIN

Customer :

Thank so much. This helps.

Robin D :

You are most welcome

Robin D :

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Robin D :

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