I have a new FEIN/Tax ID; how does that affect my TaxJar account?
At this time, TaxJar supports a single business entity and one Federal Tax ID in a single TaxJar account. This also applies to AutoFile; at this time, we can file returns under one Federal Tax ID in a single account. This is the number you list in your account's Business Profile (See image below.)
If your business changes ownership or you change the structure of your business, resulting in a new business name or Tax ID/SSN/FEIN, you will need to open a new TaxJar account under the new entity/name or Tax ID for the new entity.
In many cases, you may need to track the final sales data under the previous Tax ID/business name before closing the first account. In this scenario, we recommend taking the following steps:
- Disconnect all Linked Account connections on the last day the original name/Tax ID will be active. If you need to file final returns for this business, this will prevent additional sales from being imported into the account.
- You should keep the original account open until you have filed all returns for the last sales imported for the original entity.
- If you plan to file manually, you can file those returns at any time after sales for that entity have ceased. If you are enrolled in AutoFile, our system will file the returns the month they are due, according to the filing frequency, but we will not mark those returns as final. See more details here.)
You should also open a new TaxJar account for the new business/Tax ID and connect the Linked Accounts to allow our system to begin creating new Sales Tax Reports for the new business/Tax ID.
- Ideally, any Linked Accounts you connect to the new TaxJar account should not contain old data from a previous company. But, if the new business is still connected to a Linked Account that contains data from the previous business, you can exclude sales from the previous business from the Reports in the new account by setting the nexus start date of the new entity in your State Settings. This will force the Reports to ignore those previous transactions.
- If you are using AutoFile or plan to have AutoFile submit returns for the new entity, you'll need to enroll in AutoFile in the new account with the new business details, including the new tax ID number.
Once all returns have been filed under the original account, you can then close the first account if the data from that account is no longer needed.
- Please note that you will lose access to Reports in the original account as soon as it is cancelled, so you should not cancel until after you (or AutoFile) has completed filing all remaining returns for the original business entity.
- You should also save any details or records you would like to retain (such as copies of AutoFiles from the Filing History) in the original account before you cancel it.
Actions to Avoid:
If you attempt to switch business names/entities/Tax ID's within a single account, and you do not create a new account for the new entity, this can adversely affect your Sales Tax Reports, as well as any returns that our system attempts to AutoFile.
- If you attempt to remain enrolled in AutoFile in the original account after the business entity/Tax ID changes, the state may not properly connect the return to the new account.
- If that happens, you'll need to contact the state's DOR and work with them to have any returns AutoFiled under the previous tax ID/business name/entity applied to the new Tax ID or business name/entity.