Contractor Exempt Purchase Certificate (Page 2 of 2) in pdf

ST-120.1 (2/98) (back)

Instructions

Only a contractor who has a valid Certiﬁcate of Authority issued by the

h. Trash removal services purchased by a contractor and rendered

in connection with a capital improvement to an exempt

Tax Department may use this form. The contractor must present it to

the vendor to purchase tangible personal property, or to a

organization’s property.

subcontractor to purchase services tax exempt. This certiﬁcate is not

i. To install qualiﬁed alternative fuel vehicle refueling property

valid until all entries have been completed.

(described in f. above).

The contractor may use this certiﬁcate to claim an exemption from

To the purchaser

sales or use tax on tangible personal property or services that will be

used in the manner speciﬁed in items a through i below. The

Warning for misuse of this form

contractor may not use this certiﬁcate to purchase tangible personal

Any person who intentionally issues a false exemption certiﬁcate to

property or services tax exempt on the basis that Form ST-124,

evade sales and compensating use tax may be assessed for the tax

Certiﬁcate of Capital Improvement, has been furnished by the project

evaded, and will be subject to a penalty of 100% of the tax due and a

owner. A separate Form ST-120.1, Contractor Exempt Purchase

penalty of $50 for each such certiﬁcate issued. The purchaser will also

Certiﬁcate, must be used for each project.

be guilty of a misdemeanor punishable by a ﬁne not to exceed

$10,000 ($20,000 for a corporation). Other penalties may also apply.

Tangible personal property for which an exemption is claimed must be

physically incorporated into the project identiﬁed on the front of this

In addition, your Certiﬁcate of Authority, allowing you to make certain

certiﬁcate.

tax-free purchases, may be revoked, prohibiting you from conducting

any business in New York State for which a Certiﬁcate of Authority is

Purchase orders showing an exemption from the sales or use tax

required.

based on this certiﬁcate must contain the address of the project where

the property will be used, as well as the name and address of the

To the vendor

project owners (see front of this form). Invoices and sales or delivery

slips must also contain this information (name and address of the

Do not accept this certiﬁcate unless all entries have been completed.

project for which the exempt purchases will be used or where the

The contractor must give you a properly completed exemption

exempt services will be rendered, as shown on front of this form).

certiﬁcate no later than 90 days after delivery of the property or

service; otherwise, the sale will be deemed to have been taxable at

the time the transaction took place. When a certiﬁcate is received after

Use of the certiﬁcate

the 90 days, both the seller (vendor) and contractor assume the

This certiﬁcate may be used by a contractor only to claim exemption

burden of proving that the sale was exempt, and may have to provide

from tax on purchases of tangible personal property that is:

additional substantiation.

a. Incorporated into real property under the terms of a contract

Your failure to collect sales tax, as a result of accepting an improperly

entered into with an organization that has furnished the

completed exemption certiﬁcate or receiving the certiﬁcate more than

contractor with a copy of Form ST-119.1, Exempt Organization

90 days after the sale, will make you personally liable for the tax plus

Certiﬁcation, governmental purchase order, or voucher.

any penalty and interest charges due.

b. Incorporated into real property and is production machinery or

You must keep this exemption certiﬁcate for at least three years

equipment for which the customer has given the contractor

after the due date of the last return to which it relates, or after the

Form ST-121, Exempt Use Certiﬁcate.

date when the return was ﬁled, if later. You must also maintain a

c. Installed or placed in the project in such a way as to remain

method of associating an exempt sale made to a particular customer

tangible personal property after installation. State and local sales

with the exemption certiﬁcate you have on ﬁle for that customer.

tax must be collected from the contractor’s customer on both the

sale of tangible personal property and the charges for

Caution: You will be subject to additional penalties if you sell tangible

installation, unless the contractor is installing production

personal property or services subject to tax, or purchase or sell

machinery or equipment and is given the exemption

tangible personal property for resale, without possessing a valid

Form ST-121, Exempt Use Certiﬁcate. In that instance, the

Certiﬁcate of Authority. In addition to the criminal penalties imposed

contractor is not required to collect any state or local tax on the

under the New York State Tax Law, you will be subject to a penalty of

tangible personal property, but must collect the local tax that

up to $500 for the ﬁrst day on which the sale or purchase is made,

applies to the charges for installation.

plus an amount up to $200 for each subsequent day on which the

sale or purchase is made, up to the maximum allowed.

d. Used in erecting, adding to, altering, or improving a silo,

including the silo’s foundation, used to make and store silage on

a farm, provided the tangible personal property is to become an

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integral part of the silo.

Telephone Assistance is available from 8:30 a.m. to 4:25 p.m., Monday through

e. Posts and wire for use in constructing or maintaining trellises

Friday. For business tax information and forms, call the Business Tax

used directly and predominantly in growing grapes for sale.

Information Center at 1 800 972-1233. For general information, call toll free

1 800 225-5829. To order forms and publications, call toll free 1 800 462-8100.

f. Alternative fuel vehicle refueling property used predominantly for:

From areas outside the U.S. and Canada, call (518) 485-6800.

(1) the storage or dispensing of alcohol, natural gas, propane, or

hydrogen into the fuel tank of an alternative fuel vehicle, but only

Fax-on-Demand Forms Ordering System - Most forms are available by fax 24

hours a day, 7 days a week. Call toll free from the U.S. and Canada

if the storage or dispensing of the fuel is at the point where such

1 800 748-3676. You must use a Touch Tone phone to order by fax. A fax code is

fuel is delivered into the fuel tank of such a vehicle; or

used to identify each form.

(2) the recharging of an electric vehicle, but only if the property

is located at the point where such vehicle is recharged. The

Internet Access -

Access our website for forms, publications, and information.

property must be subject to an allowance for depreciation and its

original use must begin with the purchaser.

Hotline for the Hearing and Speech Impaired - If you have access to a

telecommunications device for the deaf (TDD), you can get answers to your New

This certiﬁcate may also be used by a contractor only to claim

York State tax questions by calling toll free from the U.S. and Canada

1 800 634-2110. Assistance is available from 8:30 a.m. to 4:15 p.m., Monday

exemption from tax on services that are:

through Friday. If you do not own a TDD, check with independent living centers or

g. To install tangible personal property that does not become a

community action programs to ﬁnd out where machines are available for public

part of the real property upon installation; or

use.

to repair real property, when the services are for the project

Persons with Disabilities - In compliance with the Americans with Disabilities

named on the front of this form and will be resold; or both.

Act, we will ensure that our lobbies, ofﬁces, meeting rooms, and other facilities

are accessible to persons with disabilities. If you have questions about special

Purchases of services for resale can occur between prime

accommodations for persons with disabilities, please call the information numbers

contractors and subcontractors or between two subcontractors.

listed above.

The retail seller of the services, generally the prime contractor,

Mailing Address - If you need to write, address your letter to: NYS Tax

must charge and collect tax on the contract price, unless the

Department, Taxpayer Assistance Bureau, W A Harriman Campus,

project owners give the retail seller of the service a properly

Albany NY 12227.

completed exemption certiﬁcate.

Contractor Exempt Purchase Certificate Page 2

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