Form ST 120.1 ST201 St120 1 Fill In

User Manual: ST201

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Department of Taxation and Finance

New York State and Local Sales and Use Tax

Contractor Exempt Purchase Certificate

ST-120.1

(5/16)

To be used only by contractors who are registered with the Tax Department for sales tax purposes.
To vendors:
You must collect tax on any sale of taxable property or services unless the contractor gives you a properly
completed exempt purchase certificate not later than 90 days after the property is sold or service is
rendered. In addition, you must keep the certificate for at least three years, as explained in the instructions.

This form cannot be used to purchase motor fuel or diesel motor fuel exempt from tax.
To contractors and vendors: Read the instructions on pages 3 and 4 carefully before completing or accepting this certificate.
Name of seller			

Name of purchasing contractor

Street address			

Street address

City

City

1.

State

ZIP code

I have been issued a New York State Certificate of Authority,

			

State

(enter your sales tax identification number)

ZIP code

, to collect

		 New York State and local sales and use tax, and that certificate has not expired or been suspended or revoked.
2.

The tangible personal property or service being purchased will be used on the following project:

located at
for and with
pursuant to prime contract dated

.

3. These purchases are exempt from sales and use tax because:
		
(Mark an X in the appropriate box; for further explanation, see items A through P in the instructions on pages 3 and 4.)
A. The tangible personal property will be used
in the above project to create a building
or structure or to improve real property or
to maintain, service, or repair a building,
structure, or real property, owned by
an organization exempt under Tax Law
section 1116(a). (For example, New York
State government entities, United States
governmental entities, United Nations and
any international organization of which the
United States is a member, certain posts or
organizations of past or present members
of the armed forces, and certain nonprofit
organizations and Indian nations or tribes
that have received New York State sales tax
exempt organization status.) The tangible
personal property will become an integral
component part of such building, structure, or
real property.
B. The tangible personal property is production
machinery and equipment, and it will be
incorporated into real property.

C. The tangible personal property will be used:
• in an Internet data center when the property
is to be incorporated as part of a capital
improvement; or
• directly and predominantly in connection
with telecommunications services for sale or
Internet access services for sale; or
• directly and predominantly by a television or
radio broadcaster in connection with producing
or transmitting live or recorded programs.
D. The tangible personal property, including
production machinery and equipment, is for
installation in the above project and will remain
tangible personal property after installation.
E. The tangible personal property will become
an integral component part of a building,
structure, or real property, used predominantly
(more than 50%) either in the production
phase of farming or in a commercial horse
boarding operation, or in both.

Note: This certificate is not valid unless the purchaser completes the certification on page 2.

Page 2 of 4

ST-120.1 (5/16)

F. The machinery or equipment will be used
directly and predominantly to control, prevent,
or abate pollution or contaminants from
manufacturing or industrial facilities.

K. The services are for the project described
in line 2 on page 1 and will be resold. (This
includes trash removal services in connection
with repair services to real property.)

G. The tangible personal property is residential or
commercial solar energy systems equipment.
(Note: Item G purchases are exempt from the
4% New York State tax rate and from the ⅜%
MCTD rate. Item G purchases may be exempt
from local taxes. See instructions.)

L. The services are to install, maintain, service,
or repair tangible personal property used in
an Internet data center, for telecommunication
or Internet access services, or for radio
or television broadcast production or
transmission.

H. The tangible personal property will be used
directly and exclusively in adding to, altering,
or improving a qualifying tenant’s leased
premises for use as commercial office
space in Eligible Area A or B as described
in TSB‑M‑05(12)S, Sales and Use Tax
Exemptions on Certain Purchases of Tangible
Personal Property and Services for Leased
Commercial Office Space in Lower Manhattan,
provided that the tangible personal property
becomes an integral component part of the
building in which the leased premises are
located, and where such property is purchased
during the first year of the qualifying tenant’s
lease and delivered to the leased premises
no later than 90 days after the end of that first
year.

M. The services are to install, maintain, service,
or repair tangible personal property that will be
used predominantly either in farm production
or in a commercial horse boarding operation,
or in both provided such tangible personal
property will become an integral component
part of such structure, building, or real
property.

I. The tangible personal property is machinery
or equipment used directly and predominantly
in loading, unloading, and handling cargo at a
qualified marine terminal facility in New York
City. This exemption does not apply to the
local tax in New York City.

N. The services are to install residential or
commercial solar energy systems equipment.
O. The services are to install tangible personal
property purchased during the first year of
the qualifying tenant’s lease and delivered
to the leased premises no later than 90 days
after the end of that first year, that will be
used directly and exclusively in adding to,
altering, or improving a qualifying tenant’s
leased premises for use as commercial office
space in Eligible Area A or B as described in
TSB‑M‑05(12)S.
P. The services are to install or maintain
commercial fuel cell systems equipment.

J. The tangible personal property is commercial
fuel cell systems equipment. (Note: Item J
purchases are exempt from the 4% New York
State tax rate and from the ⅜% MCTD rate.
Item J purchases may be exempt from local
taxes. See instructions.)
Caution: Contractors may not use this certificate to purchase services tax exempt unless the services are resold to
customers in connection with a project. Construction equipment, tools, and supplies purchased or rented for use in
completing a project but that do not become part of the finished project may not be purchased exempt from tax through
the use of this certificate.
Certification: I certify that the above statements are true, complete, and correct, and that no material information has been omitted. I
make these statements and issue this exemption certificate with the knowledge that this document provides evidence that state and local
sales or use taxes do not apply to a transaction or transactions for which I tendered this document and that willfully issuing this document
with the intent to evade any such tax may constitute a felony or other crime under New York State Law, punishable by a substantial fine
and a possible jail sentence. I understand that this document is required to be filed with, and delivered to, the vendor as agent for the Tax
Department for the purposes of Tax Law section 1838 and is deemed a document required to be filed with the Tax Department for the
purpose of prosecution of offenses. I also understand that the Tax Department is authorized to investigate the validity of tax exclusions or
exemptions claimed and the accuracy of any information entered on this document.
Type or print name and title of owner, partner, or authorized person of purchasing contractor
Signature of owner, partner, or authorized person of purchasing contractor

Substantial penalties will result from misuse of this certificate.

Date prepared

Instructions
Only a contractor who has a valid Certificate of Authority
issued by the Tax Department may use this exempt purchase
certificate. The contractor must present a properly completed
certificate to the vendor to purchase tangible personal property,
or to a subcontractor to purchase services tax exempt. This
certificate is not valid unless all entries have been completed.
The contractor may use this certificate to claim an exemption
from sales or use tax on tangible personal property or services
that will be used in the manner specified in items A through P
below. The contractor may not use this certificate to purchase
tangible personal property or services tax exempt on the basis
that Form ST-124, Certificate of Capital Improvement, has been
furnished by the project owner to the contractor.

Use of the certificate

Note: Unless otherwise stated, the customer must furnish the
contractor a properly completed Form ST-121, Exempt Use
Certificate.
This certificate may be used by a contractor to claim exemption
from tax only on purchases of tangible personal property
that is:
A. Incorporated into real property under the terms of a contract
entered into with an exempt organization that has furnished
the contractor with a copy of Form ST-119.1, Exempt
Organization Exempt Purchase Certificate, governmental
purchase order, or voucher.
B.

Production machinery or equipment that will be incorporated
into real property.

C.

Used in one of the following situations:
• Machinery, equipment, and other tangible personal
property related to providing website services for sale to
be installed in an Internet data center when the property
is to be incorporated as part of a capital improvement.
The customer must furnish the contractor a completed
Form ST-121.5, Exempt Use Certificate for Operators of
Internet Data Centers (Web Hosting).
• Used directly and predominantly in the receiving,
initiating, amplifying, processing, transmitting,
re-transmitting, switching, or monitoring of switching of
telecommunications services for sale, or Internet access
service for sale.
• Machinery, equipment, and other tangible personal
property (including parts, tools, and supplies) used by a
television or radio broadcaster directly and predominantly
in the production and post‑production of live or recorded
programs used by a broadcaster predominantly for
broadcasting by the broadcaster either over­‑the‑­air or
for transmission through a cable television or direct
broadcast satellite system. (Examples of exempt
machinery and equipment include cameras, lights, sets,
costumes, and sound equipment.) This exemption also
includes machinery, equipment, and other tangible
personal property used by a broadcaster directly and

Page 3 of 4

predominantly to transmit live or recorded programs.
(Examples of exempt machinery and equipment include
amplifiers, transmitters, and antennas.)
D. Installed or placed in the project in such a way that it
remains tangible personal property after installation. The
contractor must collect tax from its customer when selling
such tangible personal property or related services to the
customer, unless the customer gives the contractor an
appropriate and properly completed exemption certificate.
E.

Going to become an integral component part of a structure,
building, or real property used predominantly (more than
50%) either in the production phase of farming or in a
commercial horse boarding operation, or in both, for which
the customer has provided the contractor a completed
Form ST‑125, Farmer’s and Commercial Horse Boarding
Operator’s Exemption Certificate.

F.

Machinery or equipment used directly and predominantly
to control, prevent, or abate pollution or contaminants from
manufacturing or industrial facilities.

The contractor must use a separate Form ST‑120.1, Contractor
Exempt Purchase Certificate, for each project.
Purchase orders showing an exemption from the sales or use
tax 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 project owners (see page 1 of this form). Invoices
and sales or delivery slips must also contain this information
(name and address of the project for which the exempt
purchases will be used or where the exempt services will be
rendered, as shown on page 1 of this form).

ST-120.1 (5/16)

G. Residential or commercial solar energy systems equipment.
Residential solar energy systems equipment means an
arrangement or combination of components installed in a
residence that utilizes solar radiation to produce energy
designed to provide heating, cooling, hot water, and/or
electricity. Commercial solar energy systems equipment
means an arrangement or combination of components
installed upon nonresidential premises that utilize solar
radiation to produce energy designed to provide heating,
cooling, hot water, or electricity. The exemption is allowed
on the 4% New York State tax rate and where applicable,
the ⅜% MCTD rate. The exemption does not apply to local
taxes unless the locality specifically enacts the exemption.
The customer must furnish the contractor a completed
Form ST‑121 by completing the box marked Other (U.).
For the definition of residence and for an exception relating
to recreational equipment used for storage, as well as for
other pertinent information, see TSB‑M‑05(11)S, Sales and
Use Tax Exemption for Residential Solar Energy Systems
Equipment. For the definition of nonresidential premises,
as well as other pertinent information, see TSB-M-12(14)S,
Sales and Use Tax Exemption for the Sales and Installation
of Commercial Solar Energy Systems Equipment.
H. Delivered and used directly and exclusively in adding to,
altering, or improving a qualifying tenant’s leased premises
for use as commercial office space in Eligible Area A or
B as described in TSB‑M‑05(12)S, Sales and Use Tax
Exemptions on Certain Purchases of Tangible Personal
Property and Services for Leased Commercial Office Space
in Lower Manhattan, provided that the tangible personal
property becomes an integral component part of the building
in which the leased premises are located, and where such
property is purchased within the first year of the qualifying
tenant’s lease.
I.

Machinery and equipment used at qualified marine terminal
facilities located in New York City. The machinery and
equipment must be used directly and predominantly in
loading, unloading, and handling cargo at marine terminal
facilities located in New York City that handled more than
350,000 twenty foot equivalent units (TEUs) in 2003. For
purposes of this exemption, the term TEU means a unit of
volume equivalent to the volume of a twenty‑foot container.
This exemption does not apply to the local tax in New York
City.

Page 4 of 4
J.

ST-120.1 (5/16)

Beginning June 1, 2016, commercial fuel cell systems
equipment. Commercial fuel cell systems equipment means
an electric generating arrangement or combination of
components that is installed upon nonresidential premises
and utilizes solid oxide, molten carbonate, a proton
exchange membrane, phosphoric acid, or a linear generator
to provide heating, cooling, hot water, or electricity. The
exemption is allowed on the 4% New York State tax rate
and the ⅜% MCTD rate, if applicable. The exemption
does not apply to local taxes unless the locality specifically
enacts the exemption. The customer must furnish the
contractor a completed Form ST-121 by completing the
box marked Other (U.). See TSB-M-16(3)S, Sales and Use
Tax Exemptions Related to Commercial Fuel Cell Systems
Equipment, for more information.

This certificate may also be used by a contractor to claim
exemption from tax on the following services:
K. Installing tangible personal property, including production
machinery and equipment, that does not become a part of
the real property upon installation.
Repairing real property, when the services are for the
project named on page 1 of this form and will be resold.
Trash removal services rendered in connection with repair
services to real property, if the trash removal services will be
resold.
Note: Purchases of services for resale can occur between
prime contractors and subcontractors or between two
subcontractors. The retail seller of the services, generally
the prime contractor, must charge and collect tax on the
contract price, unless the project owner gives the retail
seller of the service a properly completed exemption
certificate.
L.

Installing, maintaining, servicing, or repairing tangible
personal property used for Web hosting, telecommunication
or Internet access services, or by a broadcaster (described
in item C on page 3).

M. Installing, maintaining, servicing, or repairing tangible
personal property that will be used predominantly either
in farm production or in a commercial horse boarding
operation, or in both (described in item E on page 3).
N.

Installing qualifying residential or commercial solar energy
systems equipment (described in item G on page 3).

O. Installing tangible personal property delivered to and
used directly and exclusively in adding to, altering, or
improving a qualifying tenant’s leased premises for use as
commercial office space in Eligible Area A or B as described
in TSB‑M‑05(12)S, provided that the tangible personal
property becomes an integral component part of the building
in which the leased premises are located.
P.

Installing or maintaining commercial fuel cell systems
equipment (described in item J above).

Misuse of this certificate

Misuse of this exemption certificate may subject you to serious
civil and criminal sanctions in addition to the payment of any tax
and interest due. These include:
• a penalty equal to 100% of the tax due;
• a $50 penalty for each fraudulent exemption certificate issued;
• criminal felony prosecution, punishable by a substantial fine
and a possible jail sentence; and
• revocation of your Certificate of Authority, if you are
required to be registered as a vendor. See TSB-M-09(17)S,
Amendments that Encourage Compliance with the Tax Law

and Enhance the Tax Department’s Enforcement Ability, for
more information.

To the seller

When making purchases that qualify for exemption from sales
and use tax, the contractor must provide you with this exemption
certificate with all entries completed to establish the right to the
exemption.
As a New York State registered vendor, you may accept an
exemption certificate in lieu of collecting tax and be protected
from liability for the tax if the certificate is valid. The certificate
will be considered valid if it is:
• accepted in good faith;
• in your possession within 90 days of the transaction; and
• properly completed (all required entries were made).
An exemption certificate is accepted in good faith when you
have no knowledge that the exemption certificate is false or is
fraudulently given, and you exercise reasonable ordinary due
care. If you do not receive a properly completed certificate within
90 days after the delivery of the property or service, you will
share with the purchaser the burden of proving the sale was
exempt.
Failure to collect sales or use tax, as a result of accepting
an improperly completed exemption certificate or receiving
the certificate more than 90 days after the sale, will make
you personally liable for the tax plus any penalty and interest
charges due.
You must maintain a method of associating an invoice (or
other source document) for an exempt sale with the exemption
certificate you have on file from the purchaser. You must also
keep this certificate at least three years after the due date of
your sales tax return to which it relates, or the date the return
was filed, if later.
Caution: You will be subject to additional penalties if you
sell tangible personal property or services subject to tax, or
purchase or sell tangible personal property for resale, without
possessing a valid Certificate of Authority. In addition to the
criminal penalties imposed under the New York State Tax Law,
you will be subject to a penalty of up to $500 for the first day on
which such a sale or purchase is made; plus up to $200 for each
subsequent day on which such a sale or purchase is made, up
to the maximum allowed.

Need help?
Visit our website at www.tax.ny.gov
• get information and manage your taxes online
• check for new online services and features
Telephone assistance
To order forms and publications:

(518) 485-9863
(518) 457-5431

Text Telephone (TTY) Hotline (for persons with
hearing and speech disabilities using a TTY): (518) 485-5082
Persons with disabilities: In compliance with the
Americans with Disabilities 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 accommodations for persons with disabilities, call the
information center.



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