In the USA, the N95 mask has become a mainstay. You need an N95 mask in the United States to stay protected against the virus. There are many N95 masks and N95 respirators you can buy that are for sale online. There are also medical and surgical face mask products that are reusable or disposable face mask types. These include 1860, 3M 8210, 3M 8511, other 3M N95 masks, and kn95 masks.
Aside from the N95 mask, you may need face shields too. All these PPE are available online in bulk or wholesale. However, kids should not use the N95 mask and should be prioritized for healthcare workers who need protection. The correct size of the N95 mask is a great antiviral tool for the best virus protection with the most uses in various working environments.
The N95 mask can protect you against the flu-causing-virus of smoke, dust, and air. It can have a filter efficiency of 95 percent at the very least.
Now, if you plan to purchase N95 mask supplies, you may be worried about the tax-exempt status benefits.
Tax exemption rules for the import of healthcare supplies and healthcare equipment
Online PPE transactions for businesses would require steps to comply in order to have benefits with sales tax. Here are the steps to follow:
- Determine the Sales tax nexus
Defined as the business activity connection of a company with the state, you should know the nexus of your company to the state. There are various ways you can create connections to the state. The most common are physical and economic nexus. This will legally allow the company to collect and or remit sales tax.
- Determine the relationship between sales tax and PPE
The term PPE is broadly used to define many types of equipment for the protection of individuals against hazards at the workplace. PPE would include the N95 mask, goggles, gowns, safety shoes, gloves, shields, and outerwear.
It is assumed that PPE is tax-exempted in many states. This is because businesses purchasing PPE are exempted from paying sales tax. This includes government agencies and hospitals that purchase PPE.
The exemptions are based on the entity purchasing items with an exempt entity certificate. Keep in mind that PPE is taxable as tangible personal property. But, there is confusion on the exemptions of PPE under state clothing.
- Gather and Store Exemption Certificates
When you sell PPE, clients may be eligible for getting tax exemptions. Hospitals and government agencies are examples. But, you may be required to collect the tax exemption certificates prior to the invoicing of consumers.
Moreover, when you receive the exemption certificates, these are to be reviewed as to its accuracy, then stored in a secured place.
When there are sales tax audits, auditors may ask for certificates. It should not be assumed that all medical facilities have sales tax exemptions.
As is the case, should you fail to receive an exemption certificate from your consumer, then feel free to charge sales tax. Moreover, keep in mind that there are expirations for sales tax certificates, and this varies with every state. Be aware of the rules and compliance measures in every state.
- Determine requirements for tax technology solution
Startup PPE businesses especially in the online realm are required by states to collect sales tax. However, the costs may be minimal. In such a case, it is not necessary for a technology solution.
Keep in mind though that the business or nexus footprint will grow, so much so that it will increase the difficulty to manually manage.
With that in mind, technology solutions may need to be plugged into the eCommerce platform to streamline the process. Exemption certificate management modules may already be included in the technology solutions.
- Register and File Sales Tax Returns
Finally, register in every state where you have sales tax nexus. The process of registering may be done online. There are various states that issue sales tax identification in 2 weeks while others issue immediately.
Keep in mind that the sales tax identification number will be required for the filing of sales tax returns. However, it will not be necessary before you collect the sales tax. There are states that may ask the company to register their enterprise as a foreign entity. This should be done with the secretary of the state prior to the registering of the company for sales tax.
Sales Taxation in various states
The taxation process for PPE can be complicated. It is important to determine which states require you to collect sales tax, then apply the right tax rules according to the rules of your state. Here are reminders in some states:
Tax clothing may be required even for PPE, such is the case in Florida. PPE is presumed taxable. But, there are PPE that are exempted from tax clothing which are work gloves. However, surgical gloves are taxable.
Connecticut taxes clothing but exempts safety apparel. This is true in other states as well. Safety apparel concerns clothing items and PPE worn for protection over the course of employment. Goggles, safety glasses, N95 masks, respirators, gloves, shields, and chemical protective suits are examples.
PPE companies that sell to Connecticut may need to collect sales tax for personal use for individual consumers.
The state exempts clothing but excludes PPE within the clothing exemption. They have specific exemptions for protective wear that are purchased for daily work and worn as part of work clothing. PPE is taxable when it is worn for general use, so personal use is taxable.