Oregon Construction Contractors (CCB) Practice Test

What is a significant distinction between an Employer Identification Number (EIN) and a Business Identification Number (BIN)?

1. Both are federal

2. One is federal and one is state

3. Both are state

4. Only BIN is state

The correct answer is: One is federal and one is state

The distinction between an Employer Identification Number (EIN) and a Business Identification Number (BIN) lies primarily in their scope and governance. An EIN is issued by the Internal Revenue Service (IRS) and is a federal identification number. It is used universally for tax purposes, enabling the IRS to track businesses and their tax obligations at the federal level. On the other hand, a BIN is typically issued by a state government and serves to identify a business for various state-level purposes, including tax registration and compliance with state laws. While all businesses must often register with their respective state for legal standing and may need a BIN, the EIN is universally applicable across the United States for federal tax identification. This distinction highlights the respective roles of federal and state authorities in business regulation: the EIN emphasizes federal accountability and tax compliance, whereas the BIN focuses on state-level identification and compliance. Understanding this difference is crucial for anyone involved in business, as it affects how they interact with regulatory entities at both levels.