§102-13 STATE AND LOCAL SALES TAX EXEMPTION I. GENERAL II ...

¡ì102-13 STATE AND LOCAL SALES TAX EXEMPTION

I.

GENERAL

In accordance with Article 28 of the NYS Tax Law, Part 3, ¡ì1115 Exemptions from Sales and Use

Tax, and in connection with capital improvement contracts, all tangible personal property which will

become an integral component of a structure, building or real property of the State, or any of its

political subdivisions, is exempt from State and local retail sales tax and compensating use tax.

In the NYS Department of Taxation and Finance Publication 765, it defines the difference between

an agent and an independent Contractor. On a construction contract, the relationship between the

Department and the Contractors is that of an independent contractor. Based on Publication 765, the

Contractor should be completing (and providing to vendors) New York State Department of Taxation

and Finance (NYSDTF) Form ST-120.1.

II. FORMS

Form ST-120.1 Contractor Exempt Purchase Certificate is typically provided by a Contractor to a

Material Supplier as documentation that materials purchased and permanently incorporated into the

work are exempt from State and local retail sales taxes. Occasionally, this form may also be requested

by utility companies if providing materials as part of a construction contract and reimbursement is being

made by the Contractor.

The NYSDOT sales tax identification number 17-7400-26K is entered in item 1 on the form, and a

contract number and description are entered under item 2 on the form. Form ST-124 Certificate of

Capital Improvement is not appropriate for use by a Contractor on a public works contract and should

NOT be signed by Inspection staff for a Contractor. If a Contractor presents a Form ST-124 Certificate

of Capital Improvement and requests a signature, direct the Contractor to use Form ST-120.1 instead.

Form ST-122 Exempt Purchase Certificate for an Agent of New York Governmental Entity is not

appropriate for use by a Contractor. The Contractor should use Form ST-120.1 Contractor Exempt

Purchase Certificate.

The Contractor may be asked to provide a letter along with the ST-120.1 stating their relationship

with NYSDOT. If this occurs or if another form is asked to be provided (other than the ST-120.1),

contact the Office of Construction for more information and guidance.

III. REFERENCES

Tax Exempt Forms:



November 2021

New York State Department of Transportation

Contract Administration Manual

Page 1

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