Specific categories of business owners in New York may be permitted to purchase products or services tax-free if they meet all applicable requirements. One of the documents enabling New York business owners to make tax-free purchases is the Resale Certificate ST-120. It allows eligible businesses to make tax-free purchases of products or services if they are destined for resale in the state.
Learn who needs to use New York Resale Certificate ST-120, what types of products and services are covered, and follow our instructions to fill out an ST-120 accurately.
Do I Need to Fill Out a New York Resale Certificate?
The ST-120 Resale Certificate is one of the many sales tax exemption certificates issued by the New York Department of Taxation and Finance (NYSDTF). An ST-120 enables a purchasing business or entity to buy tangible property or services without paying New York’s sales tax.
Who Can Use an ST-120?
An entity may only use any of the state’s sales tax exemption certificates if it is a business, organization, or group purchasing tangible property or services.
The ST-120 Resale Certificate is specifically designed for purchasing entities intending to resell taxable tangible property or services within the state. According to Page 2 of the Resale Certificate, such purchasers must meet the following criteria:
- If the purchaser is located in New York or registered as an NYS sales tax vendor, they must possess a valid Certificate of Authority. Motor fuel and diesel motor fuel do not count as a valid type of tangible property for the purposes of the ST-120 certificate. Businesses with no physical presence in New York State need a Certificate of Authority if they sell more than 100 tangible property products or more than $300,000 a year of tangible property in the state.
- If the purchaser is registered out-of-state, in D.C., or Canada, or is located in a jurisdiction that doesn’t require registration for sales tax or VAT purposes, they do not need a Certificate of Authority. However, the products or services purchased must be connected to New York. For example, items for resale must either be delivered to the purchaser, customers, or a service provider located in New York.
- The purchaser must not be a construction industry contractor. They must either pay sales tax on construction materials or use different exemption certificates, such as Form ST-120.1 Contractor Exempt Purchase Certificate.
What Happens if I Don’t Fill Out an ST-120?
If you do not fill out an ST-120 Resale Certificate when making a purchase, the seller of the tangible property or services you are purchasing is required to collect sales tax on the transaction. In other words, you must pay sales tax on the purchase even if you were eligible for a tax exemption.
Filling out an ST-120 for purposes other than reselling products within the state may constitute certificate misuse. For example, you may not use an ST-120 and claim a tax exemption on products destined for personal use, as you will owe sales tax on all items you use or consume.
Per Page 2 of the Resale Certificate, certificate misuse exposes you to the following penalties:
- $50 penalty for each misused certificate + 100% of the total taxes due
- Revocation of your Certificate of Authority, if applicable
- A potential criminal felony prosecution punishable by substantial fines and prison sentences
How to Fill Out the New York Resale Certificate ST-120
If your business meets the criteria to use a New York Resale Certificate ST-120, follow these instructions to fill it out correctly.
Step 1: Identification of Seller and Purchaser
- Name of Seller, Address
- Enter the business name of the selling entity your business is purchasing tangible property or services from.
- Name of Purchaser, Address
- Enter your business name in this field.
Step 2: Certificate Type
- Single-use certificate
- If you are making a single-use purchase from a seller or are a temporary vendor, you must check this box. You are considered a temporary vendor if you sell tangible property or services for no more than two consecutive quarters in a 12-month period.
- Blanket certificate
- You may check this box if you are making multiple purchases of the same general type of products or services from the same seller. Temporary vendors may not issue blanket certificates.
Step 3: Purchaser Information
- I am engaged in the business of
- Enter the nature of your business or the general name of your business’s industry in this field.
- And principally sell
- Write in this field the types of products or services your business primarily sells. If you sell multiple products or services, the type that constitutes the majority of your sales or business activity is the one you principally sell.
Step 4: New York State Vendor
You only need to complete this section of the certificate if you are a New York-based entity or are registered as a New York State sales tax vendor.
Part 1
- A New York State vendor
- Check this box if you are a non-temporary New York State vendor of products or services. It includes hotel operators, hotel dues or admissions recipients, show vendors and entertainment vendors. Write your valid Certificate of Authority number in the corresponding field.
- A New York State temporary vendor
- Check this box if you are a temporary New York State vendor. Write your valid Certificate of Authority number in the first field and its expiration date in the second field.
I Am Purchasing
- A. Tangible personal property
- For the purposes of this certificate, tangible personal property includes any type of physical product that can be seen and touched. Check this box if you are purchasing tangible property other than motor fuel or diesel motor fuel, and you intend to do one of the following:
- Resell the property in its present form (e.g., sold as-is).
- Resell the property as a physical component of another type of tangible personal property. For example, buying parts, assembling them into a complete product, and reselling the complete product.
- Use the purchased property to perform taxable services in situations where the purchased property is used as a physical component of another property on which you are performing services. Example: Purchasing parts to construct a complete product with which you can perform a service.
- Transfer the property to the buyer of a taxable service in conjunction with the performance of the service. Example: Supplying replacement parts alongside repair services.
- For the purposes of this certificate, tangible personal property includes any type of physical product that can be seen and touched. Check this box if you are purchasing tangible property other than motor fuel or diesel motor fuel, and you intend to do one of the following:
- B. Services for resale
- Check this box if you are purchasing a service intended for resale. You may also check this box if you are purchasing servicing of tangible personal property for sale.
- C. Food for resale
- Check this box if you are purchasing restaurant-type food, heated food, or heated drinks destined for resale.
Step 5: Non-New York State Purchaser
Complete this section if you are not required to register as a New York State sales tax vendor.
Part 2
- I am registered to collect sales tax or VAT in the following state/jurisdiction
- If you qualify as a non-NYS sales tax vendor, you must specify which state or non-U.S. jurisdiction your business is registered to collect sales tax or value-added tax (VAT) in the first field.
- If you don’t have a registration number or if registration is not required in your area, you must write your business’s location instead.
- Registration number
- If your state or jurisdiction has issued you a registration number, write it in the second field.
- If you don’t have a registration number or if registration is not required in your area, write the words NOT APPLICABLE in the second field.
I Am Purchasing
- D. Tangible personal property delivered in New York State
- Check this box if your business purchases tangible personal property other than motor fuel or diesel motor fuel. The property you purchased must be delivered directly by the seller to your customer or an unaffiliated services provider in New York.
- E. Tangible personal property delivered outside New York State
- Check this box if your business purchases tangible personal property destined for resale from a business outside New York State borders.
Certification
If you are the owner, a partner, or an authorized person acting on behalf of the purchasing business, write your name and business title in the top field, sign on the bottom-left field, and write the completion date in the bottom-right field.
Step 6: Instructions on Submitting the Certificate
Page 2 of New York Certificate ST-120 contains complete instructions and information for all entities that may interact with this form, such as purchasers and sellers. It provides up-to-date information on the following:
- Types of purchasers who can use the certificate
- Registration requirements for purchasers not based in New York
- Information for construction industry contractors
- Information for purchasers
- Risks and penalties for misusing the certificate
- Information for sellers
- Website links and New York State Department of Taxation and Finance contact information
FAQs
Here are the answers to some common questions about completing New York Resale Certificate ST-120.
According to the NYSDTF website, after filling out Certificate ST-120 or any other sales tax exemption certificate, you must send it to the seller of the products or services your business is purchasing within 90 days of the purchase.
Yes. Each form includes a field at the top of Page 1 where you must enter the name of a single seller. If you intend to make tax-exempt purchases from multiple sellers, you must issue each one its own ST-120. You may also need to issue multiple ST-120s to the same seller if you intend to purchase different types of tax-exempt products and services from them.
Normally, an ST-120 is valid only for the specific seller and purchase specified by the purchaser, making it a one-time certificate that expires after completing the purchase. However, if you checked the Blanket certificate box, the ST-120 is valid for multiple purchases indefinitely.
However, if your address, identification number, or other information relevant to the ST-120 changes or if the seller requests an updated ST-120, you must issue one.
A New York Certificate ST-121, Exempt Use Certificate, is a sales tax exemption certificate allowing an entity to report the purchase of products or services destined for use in tax-exempt purposes. The primary difference with the ST-120 is the purpose of the purchased products and services; an ST-120 is for items destined for resale, whereas ST-121 certificates are for items the purchaser intends to use or consume.
