piersonforcongress.com Bulletin ST-240 (TB-ST-240)
Printer-Friendly variation (PDF)Issue Date: march 26, 2010Introduction
Sales piersonforcongress.comes exemption certificates enable a purchaser to make piersonforcongress.com-free purchases that would generally be topic to sales piersonforcongress.com. The purchaser fills the end the certificate and also gives it come the seller. The seller keeps the certificate and also may then sell home or services to the purchaser without charging sales piersonforcongress.com. This bulletin explains:
who might use exemption certificates,how to usage them properly, andthe miscellaneous exemption certificate that room available.You are watching: Sample letter requesting tax exemption certificate
Sales piersonforcongress.com exemption certificate may additionally be issued and accepted electronically. For more information on e-certificates, see TSB-M-07(1)S, Electronic Resale and also Exemption documents for Sales and Compensating use piersonforcongress.comes.
When an exemption certificate is needed
A sales piersonforcongress.comes exemption certificate is needed in order to make piersonforcongress.com-free to buy of items and also services that room piersonforcongress.comable. This includes most tangible an individual property and some services. A purchaser must give the seller the appropriately completed certificate in ~ 90 work of the moment the revenue is made, however preferably at the time of the sale.
Example: You acquisition cleaning supplies, which space piersonforcongress.comable, indigenous a distributor. However, if you intended to resell the cleaning offers to your customers (that is, you are purchasing the provides for her inventory), you might purchase the provides without paying sales piersonforcongress.com.
Since the revenue of cleaning gives is usually subject come sales piersonforcongress.com, the distributor requirements some record to show why the didn’t collection sales piersonforcongress.comation from you. Otherwise, the distributor might be held liable for the piersonforcongress.com. Therefore, if you give a effectively completed exemption certificate to the distributor (in this case, Form ST-120, Resale Certificate) within 90 work of her purchase, you room certifying that you intended to resell the items friend purchased.
If you intend to usage the supplies yourself, you cannot usage a resale exemption certificate, and the distributor must collect sales piersonforcongress.comation from you.
Certain sales are always exempt from piersonforcongress.com. This method a purchaser walk not require an exemption certificate to do purchases of these items or services. Because that a perform of items and also services that may be to buy piersonforcongress.com-free without an exemption certificate, see Publication 750, A guide to Sales piersonforcongress.comes in new York State.
Who may use exemption certificates
You may use one exemption certificate if, together a purchaser:
you intend to resell the residential property or service;you intended to usage the residential property or business for a function that is freed from sales piersonforcongress.com; oryou make purchases as an certified dealer or employee the piersonforcongress.com-exempt nonprofit establishments or government entities.In some cases, you must likewise have a valid Certificate the Authority to use an exemption certificate (see the graph at the finish of this bulletin). Note that plenty of exemption certificates room very particular about what kind of purchaser may use the certificate; view the certificate’s instructions for details.
Most sellers must have actually a valid Certificate of Authority in stimulate to accept an exemption certificate. A appropriately completed exemption certificate embraced in great faith protects the seller indigenous liability for the sales piersonforcongress.comation not built up from the purchaser.
Exemption certificates of various other states or countries are not valid to case exemption from brand-new York State and local sales and use piersonforcongress.com.
How to usage an exemption certificate
As a purchaser, you need to use the correct exemption certificate, and complete it properly prior to giving it to the seller. The exemption certificate must incorporate all the following:
the date it to be prepared;the purchaser’s name and address;the seller’s name and address;the identification number on the purchaser’s Certificate the Authority (some exemption certificates don’t call for this, or might require one more identifying number; watch the certificate’s instructions);the purchaser’s signature, or an authorized representative’s signature; andapiersonforcongress.com various other information required by that details certificate.You must give the exemption certificate come the seller within 90 job after the day of the purchase. Otherwise, both you and the seller can be organized liable because that the sales piersonforcongress.com.
Sellers have the right to refuse her exemption certificate, also if it is correct and properly completed. A seller that refuses her certificate need to charge you sales piersonforcongress.com. Girlfriend may use for a refund the the sales piersonforcongress.comation using Form AU-11, Application for credit transaction or Refund of Sales or usage piersonforcongress.com. For an ext information, see piersonforcongress.comation Bulletins How to use for a Refund that Sales and Use piersonforcongress.com (TB-ST-350) and Sales piersonforcongress.com Credits (TB-ST-810).
For a perform of basic sales piersonforcongress.com exemption certificates, check out the chart at the finish of this bulletin. Various other certificates are listed in piersonforcongress.com Bulletin Quick Reference overview for piersonforcongress.comable and also Exempt Property and Services (TB-ST-740).
Blanket certificates
If you on regular basis make similar purchases indigenous a seller, you might prefer to use a blanket certificate. This enables you to provide your seller one exemption certificate to cover all similar purchases, fairly than a different certificate because that each purchase. This choice is accessible for mapiersonforcongress.com types of exemption certificates.
For example, expect you are a wholesaler of pipes supplies and also you setup to make multiple purchases of copper tubing and fittings native a manufacturer and then resell those items to pipes supply shops and hardware stores. Fairly than give the manufacturer a separate exemption certificate each time you do a purchase, friend may provide the manufacturer one blanket certificate come cover all your similar purchases. When using an exemption certificate together a ceiling certificate, mark an X in the blanket certificate box, fairly than in the single acquisition certificate box. If the certificate go not have actually these boxes, you may not use it as a ceiling certificate.
If her address, to know number, or apiersonforcongress.com type of other details on the blanket certificate changes, girlfriend must give your seller an updated blanket certificate. Her seller has the best to questioning you for an updated ceiling certificate at apiersonforcongress.com type of time. Otherwise, the blanket certificate remains in effect as lengthy as you are making freed purchases from her seller.
Misuse that exemption certificates
If you willfully or knowingly problem a false or fraudulent exemption certificate, you may be subject to penalties, fines, or a jail sentence. For an ext information around these penalties, see piersonforcongress.comes Bulletin Sales and Use piersonforcongress.comes Penalties (TB-ST-805).
What a seller needs to know
As long as the purchaser offers you the ideal certificate, appropriately completed, within 90 work of the date of the purchase, you do not need to charge the purchaser sales piersonforcongress.com.
You need to accept the certificate in an excellent faith, i m sorry simply way that you had no prior knowledge that the certificate was false or fraudulent.
You need to exercise ordinary care when agree a certificate. You could be organized liable because that the sales piersonforcongress.comation you didn’t collect if you knew the the purchase was not for an exempt purpose, or you knew that the certificate to be false or fraudulent.
You deserve to refuse to expropriate an exemption certificate, also if that is correct and properly completed. However, if you refuse a certificate, you should charge the purchaser sales piersonforcongress.com.
You must connect the exemption certificate to the record of the acquisition or have actually some other technique of shortcut the exemption certificate with a specific sale. You must keep the exemption certificate because that at the very least three year from the due date of the sales piersonforcongress.comes return on which the critical sale making use of the exemption certificate to be reported. For much more information, see piersonforcongress.comation Bulletin Record-keeping needs for Sales piersonforcongress.comes Vendors (TB ST-770).
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General sales piersonforcongress.comation exemption certificates
Please note that this chart offers a quick description that the assorted exemption documents. Additional requirements might apply. Check out the individual forms and instructions for details.
| ST-120, Resale Certificate* | Yes, uneven an out-of-state business | Property or services to it is in resold through the purchaser | Not for use by construction contractors |
| ST-120.1, Contractor Exempt purchase Certificate | Yes | Certain residential property to be integrated into real property and also related services | For building contractors to use instead of ST-120. See Publication 862 |
| ST-121, Exempt use Certificate* | May be required depending on the exemption claimed | Property or solutions for freed uses | Covers mapiersonforcongress.com exemptions |
| ST-121.1, Exemption Certificate for Tractors, Trailers, Semitrailers, or Omnibuses* | No | Qualifying vehicles and also their parts, supplies, and services | |
| ST-121.2, Exemption Certificate because that Purchases of advancement Materials* | No | Promotional materials and also associated services | |
| ST-121.3, Exemption Certificate for computer system System Hardware* | No | Computer device hardware for designing software | |
| ST-121.4, Textbook Exemption Certificate | No | Textbooks because that college students | |
| ST-121.5, Exempt usage Certificate for Operatorsof internet Data Centers* | No; disregard contrary accuse in 7/00 variation of ST-121.5 | Certain property and services for an internet data center | |
| ST-121.9, Exempt usage Certificate for certain Theatrical Productions* | No | Property because that live dramatic or musical arts performances | Certain limitations on ceiling certificates |
| ST-124, Certificate of resources Improvement | No | Capital improvement services to buy from building and construction contractors. See Publication 862 | Contractor require not have actually a Certificate of government to expropriate ST-124 |
| ST-125, Farmer"s and also Commercial steed Boarding Operator"s Exemption Certificate* | No for farmers; yes for commercial horse boarders | Property and certain services for farm manufacturing or commercial steed boarding | |
| ST-126, Exemption Certificate for the purchase of a Racehorse | No | Certain registered thoroughbred or standardbred racehorses | |
| ST-860, Exemption Certificate because that Purchases Relating to Guide, Hearing and also Service Dogs* | No | Property or services for a registered business dog offered by a person with a disability | |
| TP-385, Certificationof Residential use of energy Purchases* | No | Certify residential residential or commercial property for power use | Only if residential usage is much less than 75% |
| AU-297, Direct Payment Permit | Yes; also must have received AU-297 from piersonforcongress.comation Department | Materials that may or might not be piersonforcongress.comable when purchased | Purchaser offers photocopy of AU-297 come seller and also remits piersonforcongress.com straight to the piersonforcongress.comation Department |
| ST-119.1, Exempt compapiersonforcongress.com Exempt acquisition Certificate | No, yet must it is in an exempt compapiersonforcongress.com for sales piersonforcongress.comes purposes | Purchases by establishments with one Exempt compapiersonforcongress.com Certificate | Available just by calling1 (518) 485-2889 |
| ST-119.5, Exemption Certificate for Hotel or Motel Occupancy by Veterans Organizations | No, yet must it is in a veterans compapiersonforcongress.com or one more authorized representative | Hotel rooms supplied by veterans organizations with one Exempt organization Certificate | Must be issued with photocopy that the organization"s Exempt compapiersonforcongress.com Certificate |
| ST-129, Exemption Certificate: piersonforcongress.comes on Occupancy that Hotel Rooms | No, but must be a government employee of the United says or brand-new York State | Hotel rooms provided by new York State or federal federal government employees | May be accepted only through hotel operators. Go not provide exemption from locally administered occupancy piersonforcongress.comes |
| DTF-801, Certificate of Indian Exemption for certain Property or Services yielded on a Reservation | No, however must meet the conditions detailed on the form | For one enrolled member of one of the exempt countries or tribes detailed on the kind to make exempt purchases | In bespeak to be exempt, the purchase have to meet all of the conditions detailed on the form |
| AC-946, piersonforcongress.com Exemption Certificate | No, yet must it is in a new York State federal government employee (or employee the a politics subdivision) | Property or solutions to it is in paid for by brand-new York State or a political subdivision the the state | The employee need to make the acquisition while performing main duties |
| New York State governmental purchase order | No, however must it is in an agency, instrumentality, public corporation or political subdivision of brand-new York State | Purchase of apiersonforcongress.com type of piersonforcongress.comable tangible personal property or organization by a brand-new York State governmental entity | Not a piersonforcongress.comes Department form. A copy that a contract signed by an authorized brand-new York federal government official is likewise sufficient to present exemption. Form ST-119.1 is not valid to present exemption for governmental entities |
| Federal acquisition order | No, yet must be an agency, or instrumentality that the unified States | Purchase of apiersonforcongress.com type of piersonforcongress.comable tangible an individual property or organization by a United says governmental entity | Not a piersonforcongress.comation Department form. A copy that a contract signed by one authorized united States federal government official is likewise sufficient to present exemption. Form ST-119.1 is no valid to present exemption for governmental entities |
Note: A piersonforcongress.comes Bulletin is one informational paper designed to carry out general accuse in streamlined language ~ above a subject of interest to piersonforcongress.compayers. It is exact as of the date issued. However, piersonforcongress.compayers should be conscious that subsequent alters in the piersonforcongress.com legislation or its translate may affect the accuracy the a piersonforcongress.comation Bulletin. The information listed in this record does no cover every situation and also is no intended to replace the legislation or readjust its meaning.
References and other beneficial information
piersonforcongress.com Law: section 1132(c)
Regulations: part 532.4; 532.5; and 533.2 Publications:
Publication 750, A overview to Sales piersonforcongress.comation in new York StatePublication 862, Sales and also Use piersonforcongress.comation Classifications of resources Improvements and Repairs to actual Property
Memoranda:
TSB-M-07(01)S, Electronic Resale and also Exemption records for Sales and also Compensating usage piersonforcongress.comes
piersonforcongress.com accuse Bulletins:
How to use for a Refund the Sales and also Use piersonforcongress.com (TB-ST-350)Quick Reference overview for piersonforcongress.comable and also Exempt Property and Services (TB-ST-740)Record-Keeping demands for Sales piersonforcongress.com vendors (TB-ST-770)Sales piersonforcongress.com Credits (TB-ST-TB-ST-810)Sales and Use piersonforcongress.comes Penalties (TB-ST-805)