What the New York Form ST-125 (2016) Is For
New York Form ST-125 (2016), the Farmer’s and Commercial Horse Boarding Exemption Certificate, lets buyers claim sales tax exemptions on qualifying purchases for agricultural production and horse boarding. People who qualify can use the ST-125 form to buy certain goods and services without paying New York State and local sales tax at the time of purchase.
This exemption only applies when the things you buy are mostly used for activities that qualify, like improving soil productivity, farming or gardening, or running a commercial horse boarding business. Sellers are required to retain the form for their records, and the Department of Taxation and Finance must retain it for audit purposes.
When You’d Use New York Form ST-125
Form ST-125 is used at the time of purchase or within 90 days after delivery of taxable property or services. Farmers and commercial horse boarding operators use it to claim agricultural exemptions and exemptions for farmers without needing to apply for refunds later.
Late or amended filing does not apply directly to the ST-125 form. If sales tax was already paid on a qualifying purchase, the purchaser must instead request a refund using Form AU-11. This commonly applies when the exemption certificate was not provided promptly or contained errors. The form is not limited to New York City and applies statewide, including Nassau and Niagara Counties, Cattaraugus County, and other local jurisdictions where sales tax is imposed.
Key Rules or Details for 2016
In 2016, Form ST-125 allowed eligible farmers and a commercial horse boarding operator to claim sales tax exemptions on purchases used predominantly in agricultural or horticultural production or horse boarding. The Department of Taxation and Finance expects the buyer to meet New York State law requirements and complete the ST-125 form accurately and correctly.
For farmers to be exempt, the items must be used in qualifying activities more than 50% of the time. Mixed-use property can fail the predominant use test. Motor fuel is not exempt from this certificate, and most of the time, you need to fill out Form AU-11 or Form FT-1004 to get a refund for a fuel-related claim.
Step-by-Step (High Level)
Step 1: Confirm eligibility
Eligibility depends on whether the operation qualifies for agricultural exemptions or meets the requirements for commercial horse boarding under New York State law.
Step 2: Get the correct form
Download New York Form ST-125 (2016) in PDF format from the Department of Taxation and Finance so that the form number and title match the one that is posted.
Step 3: Complete the purchaser and seller details
Names, addresses, and business details must be entered accurately. A commercial horse boarding operator should include the Certificate of Authority number when required.
Step 4: Select the exempt purchase categories
Check the boxes that apply to the type of purchase, such as qualifying property, services, or utilities and heating fuels that are mostly used for farming, gardening, or horse boarding.
Step 5: Choose the certificate type
A single-purchase certificate is valid for a single transaction, while a blanket certificate allows for repeated purchases of similar items from the same seller until it is revoked.
Step 6: Sign and provide the certificate on time
An electronic signature may be used if accepted by the vendor through electronic filing on a mobile device or in Google Chrome, and the certificate should be provided within 90 days.
Common Mistakes and How to Avoid Them
- Using Form ST-125 for ineligible purchases: Do not use ST-125 for motor fuel or non-qualifying services and follow the applicable refund or exemption process instead.
- Failing the predominant use test: Claim the exemption only when the item is used more than 50% in qualifying business activities, and keep usage logs or mileage records as support.
- Submitting an incomplete certificate: Please complete the seller information, select the correct exemption category, and sign and date the form before submitting it.
- Assuming the seller is protected with an incomplete form, provide a complete and valid certificate at the time of sale so that the exemption is appropriately documented and sales tax liability is not shifted back to the seller.
- Confusing ST-125 with other exemption forms: Confirm ST-125 is the correct certificate for the transaction, and use other New York exemption forms when the purchase type requires a different document.
What Happens After You File
Once provided to the seller, the ST-125 form is not submitted to the Department of Taxation and Finance by the purchaser. Sellers must retain the certificate for at least three years and link it to exempt sales reported on the Quarterly Schedule and the Annual Sales and Use Tax Return.
During an audit, the Department of Taxation and Finance may review exemption certificates and certain sales and service filings. If these are used incorrectly, the person may have to pay taxes, interest, and penalties. If there is fraud, enforcement actions can become more serious and escalate to the Supreme Court or the County Clerk, depending on the severity of the scam.
FAQs
Can Form ST-125 be filed electronically?
Form ST-125 is generally provided directly to the seller, but some vendors accept electronic filing using PDF-format documents. Electronic signatures may be used if accepted by the seller and generated through secure platforms on a mobile device or desktop browser, such as Google Chrome.
Does Form ST-125 affect federal income tax?
No, the ST-125 form applies only to New York sales tax. It does not impact federal income tax, income reporting, or deductions.
What if I already paid sales tax on an exempt purchase?
If sales tax was paid, the purchaser must request a refund using Form AU-11. Supporting documentation, including invoices and proof of qualifying use, must be included.
Can a contractor use Form ST-125 on my behalf?
Contractors typically must use other exemption certificates for materials that become part of real property. Form ST-125 is generally not used by contractors purchasing their own tools or equipment.
Are utilities always exempt under Form ST-125?
Utilities and heating fuels may qualify only if used predominantly in agricultural or horticultural production or commercial horse boarding operations. Mixed-use utilities must be allocated carefully.
Is the form reviewed automatically by the state?
There is no automatic review, but the certificate is legally filed in New York State. Audits or investigations may look into it.
Where can I verify the current status of Form ST-125?
The page's last reviewed or updated date and official instructions are available on the Department of Taxation and Finance website. Taxpayers should avoid relying on unofficial sources, social networking site posts, or unrelated materials such as medical reports when confirming tax obligations.
