What New York Form ST-125 (2011) Is For
New York Form ST-125 (2011) is a sales and use tax exemption certificate that allows farmers and commercial horse boarding operators to purchase certain property and services without paying New York State and local sales taxes. This certificate serves as official documentation presented to sellers proving that specific purchases qualify for tax exemption under New York tax law. The form enables eligible agricultural businesses to reduce their operating costs by eliminating sales tax on qualifying items used predominantly in farm production or commercial horse boarding operations.
The certificate can be used either as a single-purchase document for one transaction or as a blanket certificate covering multiple purchases of the same general type of property or service from the same seller. To qualify for exemption, the property or service must be used more than 50% of the time in eligible farm production activities or commercial horse boarding operations. The form covers a wide range of exempt purchases including farm machinery, equipment, building materials, installation and repair services, utilities, and veterinary drugs for livestock and poultry, though it cannot be used for motor fuel (gasoline) or highway diesel motor fuel purchases.
When You’d Use New York Form ST-125 (2011)
Timing Requirements
You must provide Form ST-125 (2011) to the seller within 90 days after the delivery of property or performance of service to claim the exemption. The New York Department of Taxation and Finance allows this 90-day window to ensure proper documentation exists for tax-exempt transactions. If you fail to provide the certificate within this timeframe, both you and the seller could face liability for the uncollected sales tax.
Corrections and Refund Situations
While the form itself is not "amended" in the traditional sense of correcting previous filings, you may need to issue a new or corrected certificate if information changes or if the original certificate contained errors.
If you paid sales tax on a purchase that should have been exempt, you cannot retroactively use Form ST-125 (2011). Instead:
- File Form AU-11, Application for Credit or Refund of Sales and Use Tax
- Use Form FT-500 for motor fuel refunds
Key Rules or Details for 2011
Eligibility Requirements
To use Form ST-125 (2011), you must operate either:
- A qualifying farm production business, or
- A commercial horse boarding operation
Farm production includes agriculture, horticulture, aquaculture, silviculture, floriculture, stock farming, dairy operations, poultry production, orchards, ranching, raising crops and livestock, and harvesting woodland products.
Commercial horse boarding operations must:
- Operate on at least seven acres
- Board at least 10 horses
- Earn at least $10,000 annually
Operations primarily focused on horse racing do not qualify.
Predominant Use Standard
The property or service must be used more than 50% of the time in qualifying activities. This can be measured by:
- Hours of usage
- Miles traveled
Covered Purchases
Exempt purchases include:
- Farm machinery and equipment
- Feed, fertilizer, livestock bedding
- Building materials (barns, silos, fences, greenhouses)
- Installation, maintenance, and repair services
- Utilities (natural gas, propane, electricity, steam, non-highway diesel)
Exclusions and Special Rules
- Cannot be used for gasoline or highway diesel
- Use Form FT-1004 for non-highway diesel
- Horse boarding operators must provide a Certificate of Authority number
- 2011 version does not include later drug/medicine exemptions
Timing and Documentation
- Must be provided within 90 days
- Can be issued electronically
- Sellers must retain certificates for at least three years
Step-by-Step (High Level)
Step 1: Determine Eligibility
Verify that your operation qualifies and that purchases meet the predominant use requirement.
Step 2: Obtain the Form
Download Form ST-125 (2011) or request it from your supplier.
Step 3: Complete Seller Information
Enter the seller’s name and full address.
Step 4: Complete Purchaser Information
Provide your business name and address. Include Certificate of Authority if required.
Step 5: Select Certificate Type
Choose:
- Single-purchase certificate
- Blanket certificate
Step 6: Mark Applicable Exemption Categories
Mark applicable boxes (A–E):
- Property and materials
- Services
- Buildings
- Vehicles
- Utilities
Step 7: Review and Sign
Ensure accuracy. Sign and date the form.
Step 8: Provide to Seller
Submit before purchase or within 90 days.
Step 9: Maintain Records
Keep copies for at least three years.
Common Mistakes and How to Avoid Them
Missing the 90-Day Deadline
Failing to submit within 90 days can result in tax liability. Always provide the form at purchase or immediately after.
Using the Form for Ineligible Purchases
Do not use for gasoline or highway diesel. Use the proper refund forms instead.
Incomplete Certificate Information
Common issues include:
- Missing signatures
- Unchecked boxes
- Missing authority numbers
Always double-check before submitting.
Misunderstanding “Predominant Use”
The item must be used more than 50% for qualifying purposes. Keep records to prove usage.
Commercial Horse Boarding Operators Not Registering
Operators must register and provide a Certificate of Authority.
Applying Exemption to Personal Purchases
Only business-use purchases qualify. Keep personal and business expenses separate.
Fraudulent Use of Certificates
Penalties include:
- 100% tax penalty
- $50 per fraudulent certificate
- Criminal prosecution
- Possible jail time
What Happens After You File
Seller Responsibilities
- Accept certificate instead of collecting tax
- Retain records for at least three years
- Must receive certificate within 90 days
Tax Department Verification
The state may audit to verify:
- Eligibility
- Predominant use
- Supporting documentation
Blanket Certificate Duration
Remains valid until:
- You revoke it
- The Tax Department disallows it
No Filing with Tax Department
The form is not submitted to the state—only to sellers.
Potential Penalties
Misuse may result in:
- 100% tax penalties
- Fines
- Criminal charges
- Revocation of authority
Refund Claims
Use:
- Form AU-11 for general refunds
- Form FT-500 for fuel
- Form FT-420 (farmers only)
Refunds must generally be filed within three years.
FAQs
Can I use Form ST-125 (2011) if I only farm part-time or have a small hobby farm?
Yes, as long as you produce goods for sale. There is no minimum size or revenue requirement. The key is that your activity qualifies as farm production and the purchased items are used predominantly (more than 50%) in that production. Hobby activities without sales do not qualify.
What is the difference between requirements for farmers and commercial horse boarding operators?
Farmers have no minimum size or revenue requirements and do not need a Certificate of Authority. Horse boarding operations must meet acreage, horse count, and revenue thresholds, and must register with the Tax Department.
Can I use this certificate to buy a pickup truck or tractor without paying sales tax?
Yes, if the vehicle is used more than 50% in qualifying activities. Keep usage records to support the exemption.
Why can't I use Form ST-125 (2011) to buy gasoline or diesel fuel?
State law prohibits it. You must pay tax upfront and request refunds using the appropriate forms.
What happens if I provide the exemption certificate after 90 days?
Both you and the seller may be liable for the tax. Late certificates remove seller protection, so always submit promptly.
Can contractors and repairmen use Form ST-125 (2011) for farm projects?
Yes, but Form ST-120.1 is usually more appropriate. Materials must become part of qualifying structures.
If I make a mistake on the certificate, how do I correct it?
Provide a corrected certificate to the seller immediately. Replace the incorrect version and resolve any tax issues if necessary.