17: Sales Tax Exemptions and Refunds

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17: Sales Tax Exemptions and Refunds

Overview

Farm operations are exempt from paying sales tax on items used in the farming operation. None of the exemptions are automatic. You must either present an exemption certificate to the vendor when purchasing products or you can claim a refund if you have evidence to show you paid the sales tax. Forms are available on the State Dept. of Taxation and Finance website listed below. Some of the more common forms applicable to farms include the ST-125 Farmer’s and Commercial Horse Boarding Operator’s Exemption Certificate, found here: www.tax.ny.gov/pdf/current_forms/st/st125.pdf

This form exempts you from paying sales tax on the purchase of tangible personal property used predominantly (more than 50%) in farm production or horse boarding. This includes:

  • Building materials
  • Production equipment and supplies
  • Animals
  • Feed
  • Hardware
  • Motor vehicles
  • Fuel (not motor fuel)
  • Gas/propane
  • Electricity
  • Refrigeration
  • Labor and services hired for repairing, maintaining or servicing property used in farming

There are many subtle exemptions so it pays to check with the State if you are uncertain about whether an item or service you are purchasing is exempt from sales tax (and if the seller is unsure).

Copies of this form are available on the website in the margin or by calling your county extension office. Make sure you have copies of the form (ST-125) with you when making purchases. If you make numerous purchases with a particular supplier, check the box “blanket certificate” and the vendor can keep the form on file for future purchases. Page 2 of the form gives the tax department definitions of Farm Production, Farming, Predominantly, and Commercial Horse Boarding Operation.

Fact Sheet Overview

    PR-955 Claim for Refund by Farmers and Commercial Horse Boarding Operators – Sales Tax on Utilities, Fuel Oil and Motor Fuel (not for motor fuel tax)This form may be used to claim a refund if you have paid sales tax on any of the above items. You do not have to fill out this form if you have an exemption certificate on file with the vendor. You must have receipts to justify this claim. File annually or semi-annually.www.tax.ny.gov/pdf/memos/sales/m00_8s.pdf
    FT-1004 Certificate for Purchases of Diesel Motor Fuel or Residual Petroleum Product for Farmers and Commercial Horse Boarding OperationsThis form exempts you from paying sales tax on diesel motor fuel used for farming purposes. Dealers can keep this form on file (check blanket certificate) so you do not have to fill out a new form for each new purchase.https://on.ny.gov/3jaHrHD
    FT-500 Application for Refund of Sales Tax Paid on Automotive FuelsNeed to submit invoices with the refund application.https://on.ny.gov/36yQxsM
    DTF-803 Claim for Sales and Use Tax Exemption -Title/Registration Motor Vehicle, Trailer, ATV, Boat, SnowmobileThis form is not used to make purchases. Restricted to transactions processed by DMV. Motor vehicles must be predominantly used in farming.http://www.dmv.ny.gov/forms/dtf803.pdf
    ST-126 Exemption Certificate for Purchase of RacehorsesNeed a certificate for each horse.www.tax.ny.gov/pdf/current_forms/st/st126.pdf

    Need Tax Help?

    Business Tax Information:  518-457-5735

    Forms:  518-457-5431

    Website: http://www.tax.ny.gov/

    Telephone assistance from NYS Dept. Taxation and Finance is available Monday-Friday, 8:30 AM-4:25 PM