Thanks, but the Secretary of State says that businesses in Texas can pay state taxes without having an EIN,
That`s because the EIN is federal. And you put the TIN (Taxpayer ID number on the Form 1099)
We`ve been told that we do need the send a 1099, due to the nature and size of the payments we`ve made.
Have you been told this by a tax professional? You said that you have purchased goods from this vendor, so it doesn`t make sense that you need to do anything with a 1099. You just need a copy of the invoice or receipt to claim the cost of doing business on your tax returns.
Read the info from the IRS: http://www.irs.gov/pub/irs-pdf/i1099msc.pdf
State tax and Federal tax is two separate entities. A 1099 is required for payments ($600 or more) to vendors who are not corporations. The Secretary of State was possibly talking about taxes such as Business & Occupation or Sales and Use Tax. You are still required to report a 1099 in compliance with IRS Regs if they are not a corporation. Contact the IRS and explained to them your stituation. Its very admirable that you are wanting to do whats right. Good for you!
The issue you need to be concerned with is what are your
reporting requirements and then fully comply with your obligating to
report. If you have determined that you are required to report amounts
paid to a vendor or contractor that are reportable on Form 1099-MISC, all you
need to do is simply comply with those requirements. If you have
reasonably complied with the reporting requirements then your business has
created a safe-harbor position should the IRS review your information reporting
If the vendor or contractor refuses to provide you with an EIN or TIN you are
still required to file the 1099-MISC with the IRS. FILE THE 1099!!
If you fail to timely file or correctly file your 1099`s your business is
subject to the penalty structure imposed by the IRS for "Failure to File
Correct Information Returns" See Link: 1099reporter.com
Use Form W-9 to Collect the EIN or TIN from the Vendor or Contractor
B-Notice requirement are generally imposed on businesses that have an
obligation to Backup Withhold on amounts reported on Information Returns which
do not generally apply to 1099-MISC forms. However, if you do not have TIN or EIN for the recipient you are
reporting on, you are required to backup withhold at the rate of 28% of the
gross amount being reported. See IRS Publication
1281 for more information on backup withholding requirements.
As a best practices policy for your business, you may want
to request that all vendors and contractors you have determined have a 1099
reporting requirement for complete a W-9 form and return it to you. By
doing this you will be able to show that your business used due care in
complying with the IRS information reporting requirements. Further, if
the information on the 1099-MISC form is incorrect or incomplete you will have
a record of the information provide to you by the vendor or contractor on the
W-9 form to validate that the information reported to the IRS was the
information provide by the vendor or contractor.
If this person is a vendor and has a company you will not have a 1099 obligation to report. His invoices will take care of the income reporting on his company side and the legitimate expense on your side.
If this person is a contractor for you as 1099pro says you will need to 1099 them for over $600.00. Tell him you will not pay him until he furnishes the W-9 if he is a contractor. It is not worth the trouble you will be with the IRS if you don`t get the information. If he still refuses, find another vendor.