What the New York Form ST-125 (2019) Is For
New York Form ST-125 (2019) is an exemption certificate used in New York State to claim sales tax exemptions for qualifying farm production purchases. It applies to eligible farm operations and Commercial Horse Boarding operations meeting state requirements.
The exemption certificate allows qualified buyers to claim an exemption from paying sales and use tax at the time of purchase. It supports farming income activities by reducing costs associated with agricultural products, production equipment, and boarding operations in accordance with New York State rules.
When You’d Use New York Form ST-125 (2019)
You use Form ST-125 when purchasing items used in farm production or a qualifying horse boarding operation. The exemption certificate is applied at the time of sale and is not filed with a tax return. Using the form correctly prevents the collection of sales tax on eligible agricultural products and production equipment.
Commercial horse boarding operators use Form ST-125 for purchases related to horse boarding activities that are treated as farm operations. The seller keeps the sales tax exemption certificate as documentation for the New York State Department of Taxation and Finance. Buyers should retain copies to support exemption claims if sales and use tax questions arise.
Key Rules or Details for 2019
Only qualified farmers or commercial horse boarding operators are permitted to use the ST-125 form in New York State. The buyer must be actively engaged in agricultural use or farm sales during the 2019 tax year. Eligibility depends on documented farming income activities that meet state sales tax exemption requirements.
The exemption does not apply to personal purchases, unrelated services, or the delivery of property for non-farm use. Improper use may result in assessed sales and use taxes, excise tax liabilities, penalties, or interest. Records should be retained to support compliance in the event of a review by the New York State Department of Taxation.
Step-by-Step (High Level)
- Step 1: The applicant must confirm eligibility for farm production or Commercial Horse Boarding Operations under New York State’s agricultural use rules.
- Step 2: The applicant must complete the ST-125 form, also known as the ST-125 Farmer’s and Commercial Horse Boarding Operator’s Exemption Certificate, accurately.
- Step 3: The buyer presents the NY DTF ST-125 to sellers at the time of purchase to prevent sales and use tax charges.
- Step 4: The buyer must verify that the purchased items qualify for agricultural use and are not services or purchases requiring a resale certificate.
- Step 5: The buyer should retain copies in Google Drive to document purchases, gross receipts, and compliance with sales tax exemption certificates.
- Step 6: Annual record reviews ensure compliance with New York State regulations for the purchase of agricultural equipment.
- Step 7: Archived documents in Google Drive help verify the validity of sales tax exemption certificates.
Common Mistakes and How to Avoid Them
Form ST-125 filing issues commonly stem from identifiable submission and documentation errors. These errors directly cause denied exemptions, tax assessments, or audit adjustments. Addressing specific filing failures enhances compliance and reduces the likelihood of enforcement actions.
- Incomplete Form ST-125: Complete all required buyer, seller, and item description fields before submission.
- Claiming ineligible purchases: List only qualifying farm production items and services.
- Incorrect certificate provided: Provide the correct exemption certificate for the transaction, such as Form ST-125, Form ST-120, or Form E-595E, as applicable.
- Failure to retain records: Keep copies of exemption certificates and supporting documents for audit review.
- Unsupported eligibility status: Maintain documentation proving qualifying agricultural use or commercial horse boarding activity.
What Happens After You File
The seller retains the exemption certificate and does not charge sales tax during the qualifying transaction process. Form ST-125 is not filed with New York State and is retained by the seller for record-keeping compliance purposes. Proper use supports farm production activities and prevents improper sales and use tax assessments later during audits.
During an audit, records must substantiate agricultural use, gross receipts, and qualifying agricultural products. Documentation should demonstrate that purchases relate directly to boarding operations or horse boarding operation activities only. Invalid claims may affect income taxes, Schedule F reporting, and future eligibility for exemptions under review.
FAQs
What is the ST-125 form used for in New York?
The ST-125 form allows qualified farm production and Commercial Horse Boarding Operations to claim sales and use tax exemptions on purchases.
Who qualifies to use the ST-125 Farmer's and Commercial Horse Boarding Operator's Exemption Certificate?
Eligible users include farmers and each commercial horse boarding operator engaged in agricultural use, generating gross receipts from boarding operations.
Does the ST-125 form provide an absolute property tax exemption?
No, the ST-125 form applies only to sales tax exemption certificates, not real property tax exemption programs administered locally.
Is the ST-125 form filed with the New York State Department of Taxation and Finance?
The certificate is provided to sellers at the time of purchase and is retained in their records, often stored digitally using Google Drive.
Can other exemption forms replace Form ST-125?
No, Resale Certificate Form ST-120 and Form E-595E serve different purposes and cannot replace the NY DTF ST-125. They apply to various transactions, and failure to use correct documentation may result in assessed sales and use tax liabilities during audits or reviews later.
