How to Complete the New York ST-120.1 Contractor Exempt Purchase Certificate

To fill out New York Form ST-120.1, enter the seller’s name and address, your business name and sales tax ID, a specific description of the exempt project you’re buying materials for, check the single lettered box that matches the statutory basis for your exemption, and sign and date the certificate before handing it to your supplier. Get it to the vendor within 90 days of the purchase, keep a copy with the matching invoice and contract, and use a separate certificate for each project rather than treating it as a blanket document.¹

Before You Fill Anything In

The ST-120.1 is the certificate contractors use to buy materials tax-free when those materials will be permanently incorporated into a project for a tax-exempt customer, such as a government agency, a qualifying nonprofit, a house of worship, or a farm operation. It’s not the general resale certificate, and contractors generally cannot substitute ST-120 for this form.¹

Two things need to be true before you issue the certificate. Your business must hold a valid New York Certificate of Authority for sales tax purposes.² And the purchase itself must fit one of the exemptions the form covers: materials becoming part of a structure owned by an exempt organization under Tax Law Section 1116(a), production machinery incorporated into real property, solar energy systems equipment, commercial fuel cell systems, pollution-control equipment for manufacturers, internet data center equipment installed as a capital improvement, or cargo-handling machinery at qualified New York City marine terminals.¹ If your customer isn’t exempt and your project doesn’t match one of those specialized categories, the form doesn’t apply.

Download the current version of the form from the Department of Taxation and Finance’s sales tax exemption documents page.³ Working from an old copy risks missing a checkbox or statutory reference that has been updated.

Filling In the Seller and Contractor Information

The top of the form has two blocks. The first is for the seller, meaning the supplier you’re buying from: write in their name and address exactly as they appear on your invoice or quote.

The second block is for you. Enter your business name, street address, city, state, and ZIP code, then your sales tax identification number. Check every digit of the ID. A transposed number can cause the vendor to reject the certificate, and if it does slip through, it gives neither of you cover if the state later audits the transaction.¹

Describing the Project

Line 2 asks for a description of the project. Treat this as the paper trail that ties each tax-free purchase to a specific qualifying job. Include the project address, the name of the entity you’re performing the work for, and the date of your prime contract.

Specific beats vague every time. “Roof replacement at 45 Oak Street, Albany, for XYZ Church, per contract dated March 10, 2026” tells an auditor exactly what they need to confirm. “Church project” doesn’t. If the state can’t match your purchases to a real exempt project and a real contract, the exemption fails and the tax comes back on you.

Choosing the Right Checkbox

The lettered checkboxes are the heart of the form. Each one points to a different statutory basis for exemption, and you check only the one that fits your situation. Picking the wrong box is one of the most common audit findings, because the exemption claimed then doesn’t line up with the legal authority for the purchase.¹

The boxes contractors reach for most often:

Box A covers tangible personal property used to create, improve, maintain, service, or repair a building or real property owned by an exempt organization under Tax Law Section 1116(a). This is the box for most government, nonprofit, and house-of-worship work.
Box B covers production machinery and equipment that will be incorporated into real property.
Box D covers tangible personal property, including production machinery, installed in the project that will remain tangible personal property after installation rather than becoming part of the realty.
Box E covers property that will become part of a building used predominantly in farming or commercial horse boarding.
Box G covers residential or commercial solar energy systems equipment.

Read every option on the form before you check one. If the job is a church renovation, Box A is correct even when the materials include equipment, because the statutory authority flows from the exempt owner, not from what you’re buying. Match the box to the reason the purchase is exempt.

Signing and Dating

An authorized representative of the contracting business must sign and date the certificate. An unsigned or undated form has no legal effect. Vendors are not obliged to accept it, and it offers no protection in an audit. The signature is your attestation that the information is accurate and that the materials will actually be used for the exempt purpose you described.

Getting the Certificate to Your Vendor

Hand the completed form to your supplier at the time of the sale when you can. New York allows a 90-day window: the certificate must reach the vendor within 90 days after the purchase to be valid. Miss that deadline and both you and the seller can be held liable for the uncollected tax.⁴ A vendor who receives a properly completed certificate inside that window is relieved of liability for not collecting tax on the sale.⁵

The ST-120.1 cannot be used as a blanket certificate for future purchases from the same supplier.⁴ Issue a separate certificate for each project, at minimum. Confirm the vendor has logged it before you walk away from the counter; some suppliers accept a scanned copy, others want the original on file.

Keeping the Right Records

Keep a copy of every ST-120.1 you issue together with the matching purchase invoice and the project contract. New York requires sales tax vendors to retain records for at least three years from the due date of the related return or the date the return was filed, whichever is later.⁶ That matches the state’s general audit statute of limitations, but the clock doesn’t run at all if you failed to file a return or filed a fraudulent one.⁷

Every certificate in your file should tie back to a specific qualifying project. If an auditor asks about a tax-free purchase and you can’t produce the certificate, the invoice, or the contract showing the exempt customer, the state can assess the unpaid tax on that purchase along with interest and penalties.

What Happens If You Get It Wrong

Issuing a false or fraudulent exemption certificate willfully or knowingly can bring penalties, fines, or jail time.⁴ Even honest mistakes carry a financial sting. When the state determines you owed sales tax and didn’t pay it:

Late payment of 60 days or less: 10% of the tax due for the first month plus 1% for each additional month, capped at 30%, with a $50 floor.
Failure to file, or filing more than 60 days late: the greater of that 10%-plus-1% formula, $100 (or 100% of the tax due, whichever is less), or $50.
Omitting more than 25% of tax due on a return: an additional 10% of the underreported amount.
Fraudulent failure to pay: a penalty equal to twice the unpaid tax, plus interest at the greater of 14.5% or the rate set by the Tax Commissioner.

These stack on top of the tax itself, so the final bill can run several times the amount originally owed.⁸ Owners and officers who controlled the company’s financial decisions can be pursued personally for unpaid sales tax; the assessment doesn’t have to stop at the business entity.

1
New York State Department of Taxation and Finance. New York State Contractor Exempt Purchase Certificate
2
Department of Taxation and Finance. How to Register for New York State Sales Tax
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New York State Department of Taxation and Finance. Sales Tax Exemption Documents
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Department of Taxation and Finance. Exemption Certificates for Sales Tax
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New York Codes, Rules and Regulations. 20 CRR-NY 532.4 – Presumption of Taxability
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New York State Department of Taxation and Finance. Recordkeeping Requirements for Sales Tax Vendors
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New York State Department of Taxation and Finance. Publication 130-D, The New York State Tax Audit – Your Rights and Responsibilities
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New York State Department of Taxation and Finance. Sales and Use Tax Penalties