Question for NC Preparers/Accountants

[Terry D EA]

One of my clients has been operating a business as a sole-proprietor. He just organized as a single member LLC. We did get the new EIN from the IRS as this was required due to him having employees. I have searched and searched on the NC DOR site and the NC Gen Stats to try to find out if he needs a new NC State tax ID number. The numbers are used for both Sales and Use as well as Payroll tax reporting which he does both. The only change is adding the "LLC" to the end of the existing business name. Anyone have any suggestions where to look? I called the NC DOR but they are not answering due to the inclement weather here in NC.

[JohnH]

I did a quick scan of the NCDOR web site as you did, and I could not find specific guidance on this issue.  However, since there is an entity change I think you need to register a new business and obtain a new number for NC Withholding & Sales Tax.  

 

The NCDOR now ties all their numbers back to the Federal ID Number, so having the same state ID number associated with two different Federal ID numbers will inevitably cause some sort of computer glitches along the way.  

Same is true for their Unemployment Tax number, although in this case you will want to register is as a successor employer in order to preserve the favorable tax rate (hopefullythere is one), and also to avoid the annoying mismatch letters for the state tax credit which show up a couple of years down the road. 

[Terry D EA]

Thanks John and it doesn't surprise me you didn't find any specific guidance either. I was hoping I missed it some where. My thoughts are exactly as yours. So, Monday, when all of the weather gets out of here, I will contact the DOR again and the employment security commission to inquire about the change. This client uses ADP as his payroll service provider. I provided them the new Fed EIN and they did not ask anything about NC or Unemployment.