Opening a wholesale medical supply account: what to send

Most of a wholesale account application is a sales tax question in disguise. If we cannot show the state why we left tax off your invoice, we have to charge it, so the first document we ask for is the one that answers that.

What Allied asks for

Our terms of sale list it plainly. To open a trade account we may ask for:

• your legal business name, addresses and contact details;
• a valid resale certificate for the state the order ships to;
• copies of any state or professional license, permit or registration you need to buy, sell, dispense or use the products you order;
• trade references, bank references or other credit information.

In practice, send the resale certificate and your business details with your first quote request. Licenses come into it when the products on your list require them.

The resale certificate

A resale certificate is your signed statement to the seller that you are buying goods to resell. It is the reason a distributor can leave sales tax off the invoice. Under our terms, if we are required to collect tax for the ship-to state and we do not have a valid, complete certificate for that state before the order ships, the tax goes on the invoice.

New York: Form ST-120

New York's resale certificate is Form ST-120. The current version, dated 1/26, has two parts, and you complete the one that fits.

• Part 1 is for registered New York sales tax vendors. You enter your New York sales tax identification number, the one on your Certificate of Authority.
• Part 2 is for purchasers who are not registered, and not required to register, as New York vendors. You enter the state where you are registered to collect sales tax and your registration number there. It covers goods delivered in New York for resale, for example to your customer or to a fulfillment provider in the state, and goods you will resell from a business outside New York.

Mark the blanket box rather than single-use if you plan to order more than once, so one certificate covers the account. Temporary vendors have to issue single-use certificates. Fill in the line that says what you sell, then sign and date it. The Tax Department's bulletin on exemption certificates, TB-ST-240, gives the purchaser 90 days from the sale to deliver a properly completed certificate. We would rather have it before the first carton leaves.

The certificate covers goods you will resell, and nothing else. The form itself says that if you buy items for resale but use them yourself in New York, you owe the tax directly to the state. If part of an order is equipment for your own clinic, tell us when you order; that part is taxable unless you give us a separate exemption certificate that covers it.

Outside New York

Send the resale or exemption certificate your own state uses, made out to Allied Medical Management LLC, for the state the goods ship to. If you buy from suppliers in many states, the Multistate Tax Commission publishes a uniform sales and use tax resale certificate that 36 states have said can be used as a resale certificate. Several states attach conditions in the form's notes, so read yours before you rely on it.

EIN

An employer identification number is the federal tax ID the IRS assigns to a business. Distributors often ask for it on credit applications, and it helps tie the legal name on your certificate to the rest of your paperwork. It costs nothing. The IRS online application issues the number on the spot when an application goes through, and the IRS warns about websites that charge for one. If you have just formed an LLC or corporation, register it with your state first; the IRS says the EIN application can be delayed otherwise.

If you trade as a sole proprietor and have been writing your Social Security number on supplier forms, get an EIN and use that instead. No one selling you shower chairs needs your Social Security number.

Business license and state permits

A local business license or your certificate of formation shows the business exists. State licenses for what you sell are a separate matter, and they vary from state to state. Florida's Agency for Health Care Administration, for example, licenses home medical equipment providers, which it defines as any person or entity that offers to sell or rent home medical equipment to a consumer and provides related services such as delivery, setup and maintenance. A sales tax registration does not answer that question, so check your own state's rules.

Some products in a DME catalog are prescription devices. For those, our product notice says we may ask for proof that you are allowed to buy and hold them before we ship.

When an NPI matters

A National Provider Identifier is a 10-digit number that identifies a health care provider in standard electronic health transactions, such as claims. According to CMS, the number carries no information about the provider, such as location or specialty. Every health care provider that is a HIPAA-covered entity must obtain one, and CMS describes a covered provider as one that transmits health information in electronic form in connection with a standard transaction.

So the dividing line is billing. A pharmacy or clinic that bills health plans electronically is covered, already has an NPI, and can add it to the account form. A medical supply store or online shop that takes payment directly from its customers and never bills a health plan is not required to have one. If you have an NPI, include it with your account details.

A first-order checklist

1. Your legal business name and ship-to address, written exactly as they appear on your certificate.
2. A resale certificate for the ship-to state, completed, signed and dated, with the blanket box marked.
3. Copies of any state license the products on your list require.
4. A quote list from the catalog, with your business type and state filled in on the form.

How to order explains the quote form. If you would rather send the documents first, use the contact page. Either way, we reply with case pricing, availability and lead time for every line on your list.

Articles are general information for trade buyers, not medical, legal, tax or reimbursement advice. We make no health claims for any product, and each product's labeling controls.