Does each series need a separate EIN?
A series does not need its own separate EIN (i.e., federal tax identification number), unless any of the following are true:
- the series has W2 employees,
- the series will elect to be taxed like a corporation,
- the series will have a different tax classification than the Series LLC,
- the series will be taxed like a partnership (i.e., has multiple owners) and your CPA wants to file separate returns for each series rather than a combined return for the LLC and all of its series (see more below);
- the series will need its own bank account (Does each series need a separate bank account?); or
- the series has excise tax obligations (excise taxes are commonly levied on cigarettes, alcoholic beverages, soda, gasoline, insurance premiums, amusement activities, and betting).
Another reason a series might need an EIN is if it is required by a bank. Banks will want to see an EIN when setting up a bank account. For more on this topic, see our article titled "Does each series need a separate bank account?".
Does each series need to file a separate tax return?
Under Texas law1, each series is not a separate entity. The IRS, however, issued a proposed regulation2 in 2010 that articulates their view that each series should be treated as a separate entity for federal tax purposes. A final regulation (to the aforementioned proposed regulation) has not been published, so the proposed regulation is not yet the law of the land. If a final regulation is published, a Series LLC that previously was treated as one entity with all of its series may be required to begin treating each series as a separate entity for Federal tax purposes.
1 See Tex. Business Organizations Code Section 101.622
2 See IRS Proposed Regulation 119921-09
Zachary Copp, Esq.