Why are AliMed’s billing procedures changing to include sales tax?
We are required to include sales tax as a result of a recent U.S. Supreme Court decision (S. Dakota v. Wayfair) that established new rules requiring sellers to collect sales tax for states in which they have customers and a minimum amount of sales. Since the decision, many states have established requirements to collect tax if a seller has more than $100,000 in sales into the state during the year. AliMed meets that standard in all fifty states including the District of Columbia.
Do these changes apply to me if I’m a tax-exempt customer?
No, but you must provide AliMed with a valid state tax exemption certificate (from your state and any state you ship to) so that we can properly designate you as exempt.
What type of exemption certificate will AliMed accept?
There are three types of exemption certificates:
- If you are reselling our products, please provide your state’s resale exemption certificate, including your sales tax registration number for that state.
- If you are a nonprofit organization, please provide your state’s nonprofit organization exemption certificate or a copy of the letter from the state granting you an exemption.
- Many states use the Streamlined Sales Tax Exemption Certificate form or a Multijurisdictional Exemption Certificate. These forms are acceptable if they are also accepted by your state.
For a certificate to be valid, the following items must be present:
- Seller name
- Purchaser name
- Signature (handwritten, e-signatures, and stamped signatures will be accepted)
- Signature date
- Description of purchaser’s business activity
Note: AliMed cannot advise you on what specific exemption certificate is right for you in your state, so you may want to consult your tax advisor to ensure you use the correct form. Whatever form is used, it is important to fill out all applicable information (name, address, type of business, exemption being sought, sales tax number...etc.) because an incomplete form may be rejected by the state.
Can I provide you with a Federal Employer Identification Number, W-9, or business license?
No, these are not valid exemption certificates.
Can I provide you with a copy of my IRS 501(c)(3) nonprofit organization exemption letter?
No, that is not a valid exemption certificate as it is a federal and not a state form. Also, not all states grant sales tax exemption to organizations that are exempt from federal income tax. If your state exempts you from sales tax, we need the state exemption certificate or letter.
I am an exempt customer but did not send an exemption certificate before being billed, what should I do?
Please send your exemption certificate as soon as possible. If it is fully completed, we will designate you as an exempt customer in our system and will no longer add sales tax to your invoices. You may also request that any tax billed previously be credited against future bills.
Resources from PWC: