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What resale certificate does a contractor use for the resale of materials and service?

Full Question: What resale certificate does a contractor use for the resale of materials and service?

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Answer:

Diane Yetter photoIn New York, purchases by a contractor of materials that will become part of a capital improvement do not qualify for a resale exemption when purchased and therefore no exemption certificate should be issued. If however, the materials will be subject to sales tax when they are resold, then an exemption could apply. In New York, a contractor should use Form ST-120.1, Contractor Exempt Purchase Certificate, if the tangible personal property being purchased qualifies for exemption as specified by the certificate. Contractors should use this form instead of ST-120, Resale Certificate, which is not for use by construction contractors. A contractor may also use Form AU-297, Direct Payment Permit, for materials that may or may not be taxable when purchased. In this case, the purchaser gives a photocopy of AU-297 to the seller and remits tax directly to the Tax Department. If order to use ST-120.1 or AU-297, you must have a valid Certificate of Authority. If using AU-297, you also must have received the AU-297 form from the Tax Department.

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