Can a customer's purchase orders serve as sales-tax exemption certificates if they include only part of the ST-120 or ST-121 form?

Plain-English summary

Edward Joy Co. received purchase orders from General Electric that contained some, but not all, of the information required on Form ST-120 (Resale Certificate) and Form ST-121 (Exempt Use Certificate) — neither form was reproduced in full. It asked whether those purchase orders could be accepted as exemption certificates.

The Department held they cannot:

• Receipts are presumed taxable unless a proper certificate is taken. Under Tax Law § 1132(c), all receipts are presumed subject to tax unless the vendor, within 90 days of delivery, takes a properly completed exemption certificate from the purchaser.
• Certificates may be reproduced only in full. Under 20 NYCRR § 532.4(c), exemption certificates may be reproduced without permission only if reproduced in their entirety. A certificate with modified language requires prior approval from the Department's Technical Services Bureau, noted on the face of the certificate with the approval date.
• The purchase orders fail both tests. GE's purchase orders neither reproduced ST-120 or ST-121 in full nor showed any prior approval for a modified version. So Edward Joy Co. may not accept them as exemption certificates, and GE may not issue them in lieu of proper certificates.
• The fix: GE must furnish properly completed Form ST-120 or ST-121 to support the exemption.

What this means for you

A purchase order is not an exemption certificate

Even a large, sophisticated customer's purchase order doesn't substitute for the actual exemption form. If it only carries part of the ST-120 or ST-121 information, you can't rely on it — and accepting it leaves you, the vendor, exposed, because receipts are presumed taxable until you hold a proper certificate.

Reproduce the form in full, or get approval for changes

You may copy an exemption certificate freely only if you reproduce it in its entirety. Any modified or condensed version needs the Technical Services Bureau's prior approval, which must be noted (with the date) on the certificate itself. Without that, a vendor cannot accept the modified certificate.

Take the certificate within 90 days

The § 1132(c) protection depends on timing: take a properly completed certificate no later than 90 days after delivery. Collect the real ST-120 or ST-121 up front rather than relying on paperwork that only partly captures it.

Common questions

Q: Our customer's purchase order has most of the exemption info — can we accept it?
A: No. Unless it reproduces the ST-120 or ST-121 in full (or is an approved modified version), it isn't a valid exemption certificate, and you can't rely on it.

Q: Can we use a condensed or reworded version of the certificate?
A: Only with prior approval from the Technical Services Bureau, noted with the approval date on the certificate's face. Otherwise a vendor may not accept it.

Q: What should we get instead?
A: A properly completed Form ST-120 (Resale Certificate) or ST-121 (Exempt Use Certificate), taken within 90 days of delivery.

Citations and references

Statutes and regulations:

• Tax Law § 1132(c) — receipts presumed taxable; vendor must take a properly completed certificate within 90 days of delivery
• 20 NYCRR § 532.4(c) — use of exemption certificates; what makes a certificate properly completed; reproduction allowed only in entirety, modified versions need prior Technical Services Bureau approval

Source

• Landing page: https://www.tax.ny.gov/pubs_and_bulls/advisory_opinions/sales_ao_1989.htm
• Opinion: https://www.tax.ny.gov/pdf/advisory_opinions/sales/a89_33s.pdf

Original ruling text

New York State Department of Taxation and Finance

Taxpayer Services Division
Technical Services Bureau

TSB-A-89(33)S
Sales Tax
September 14, 1989

STATE OF NEW YORK
COMMISSIONER OF TAXATION AND FINANCE
ADVISORY OPINION

PETITION NO. S890605A

On June 5, 1989 a Petition for Advisory Opinion was received from Edward Joy Co., 905
Canal Street, P.O. Box 6967, Syracuse, N.Y. 13217.
The issue raised is whether the purchase orders issued to Petitioner by General Electric are
also acceptable as sales and use tax exemption certificates.
Petitioner submitted copies of several purchase orders for goods or services which Petitioner
received from General Electric. The purchase orders also contain portions of the information which
is required when a vendor completes forms ST-120, Resale Certificate and ST-121, Exempt Use
Certificate. Neither form ST-120 nor ST-121 is reproduced in its entirety on the purchase orders.
Section 1132(c) of the Tax Law states, in part:
... it shall be presumed that all receipts for property or services ... are subject to tax
until the contrary is established, and the burden of proving that any receipt ... is not
taxable ... shall be upon the person required to collect tax or the customer. ...unless
(1) a vendor, not later than ninety days after delivery of the property ... shall have
taken from the purchaser a certificate in such form as the tax commission may
prescribe (emphasis added)...
Section 532.4(c) of the New York State Sales and Use Tax Regulations states, in relevant
part:
Use of exemption certificates. (1) To enable purchasers entitled to an exemption from the sales and
compensating use tax to avail themselves of the exemption and for administrative purposes, the
Department of Taxation and Finance provides various exemption forms, the use of which is
governed by the conditions under which they are issued. A vendor is not required to collect tax from
a purchaser who furnishes a properly completed exemption certificate.
(2) A certificate is considered to be properly completed when it contains the:
(i) date prepared;
(ii) name and address of purchaser;
(iii) name and address of vendor;
(iv) identification number of purchaser as shown on the certificate of
authority, or exempt organization number as shown on the exempt organization

-2­
TSB-A-89(33)S
Sales Tax
September 14, 1989

certificate. However, a farmer's exemption certificate does not have such a number.
(v) signature of purchaser or purchaser's authorized representative; and
(vi) any other information required to be completed on the particular form.
(3) Sales tax exemption certificates may be reproduced without prior permission
from the department provided they are reproduced in their entirety. (emphasis added) If a
person wishes to reproduce an exemption certificate that has modified language, he must
obtain prior approval from Technical Services Bureau of the Taxpayer Services Division of
the Department. Where approval is obtained, the user of the certificate should indicate on the
face of the certificate the fact of such approval and the date obtained from the Technical
Services Bureau. If prior approval is not obtained, a vendor may not accept such certificate.
...
Accordingly, whereas the purchase orders given to Petitioner by General Electric do not
contain reproductions of forms ST-120, Resale Certificate nor ST-121, Exempt Use Certificate in
their entirety and whereas General Electric has not indicated on the purchase orders that prior
approval for such modified reproduction has been obtained from the Technical Services Bureau nor
the date such approval was obtained, Petitioner may not accept the purchase orders as valid
exemption certificates. Moreover, General Electric may not issue the purchase orders in lieu of the
properly completed certificates.
In order to meet the requirements of Section 1132(c) of the Tax Law, General Electric must
furnish Petitioner with properly completed forms ST-120, Resale Certificate or ST-121, Exempt Use
Certificate.
It is noted that under the provisions of Section 532.4(c)(3), if General Electric wishes to
reproduce an exemption certificate that has modified language, such modified certificate must be
submitted for approval by the Technical Services Bureau.

DATED: September 14, 1989

s/FRANK J. PUCCIA
Director
Technical Services Bureau

NOTE: The opinions expressed in Advisory Opinions
are limited to the facts set forth therein.