The Idaho St 124 form, officially known as the New York State and Local Sales and Use Tax Certificate of Capital Improvement, serves as a crucial document that exempts certain capital improvement projects from sales tax. It is completed and signed by both the customer and the contractor undertaking the capital improvement work and must be retained by the contractor for record-keeping. This certificate is essential for distinguishing between taxable sales of tangible personal property and nontaxable capital improvement work on real property.
To ensure your project complies with local tax laws and benefits from applicable exemptions, fill out the Idaho St 124 form by clicking the button below.
In the realm of construction and property improvement in New York, understanding the intricacies of tax-related forms is crucial for both contractors and property owners. The New York State Department of Taxation and Finance ST-124 form, officially known as the New York State and Local Sales and Use Tax Certificate of Capital Improvement, plays a vital role in distinguishing between taxable sales and services and those that qualify as nontaxable capital improvements. This distinction is not only important for tax purposes but also impacts the financial planning of both parties involved in a construction or renovation project. The ST-124 form requires comprehensive information from the customer and the contractor, including names, addresses, and specifics about the capital improvement project. It asserts that the work performed constitutes a capital improvement to the real property, which is an addition or alteration that substantially adds value, prolongs its life, and is intended to be permanent. It's crucial that the form is fully completed and retained by the contractor to ensure compliance and to avoid any potential tax liabilities. Moreover, the stipulations mentioned clarify that the form cannot be used to purchase materials tax-exempt and outline when installed items may or may not be considered part of the real property. These guidelines ensure both parties understand the tax implications of their agreement, reinforcing the necessity of the ST-124 form in facilitating clear and lawful transactions in property improvements.
New York State Department of Taxation and Finance
ST-124
New York State and Local Sales and Use Tax
Certificate of Capital Improvement
(2/12)
After this certificate is completed and signed by both the customer and the contractor performing the capital improvement, it must be kept by the contractor.
Read this form completely before making any entries.
This certificate may not be used to purchase building materials exempt from tax.
Name of customer (print or type)
Name of contractor (print or type)
Address (number and street)
City
State
ZIP code
Sales tax Certificate of Authority number (if any)
To be completed by the customer
Describe capital improvement to be performed:
Project name
Street address (where the work is to be performed)
I certify that:
(mark one)
owner
tenant of the real property identified on this form; and
and
includes
does not include the sale of any tangible personal property that, when installed, does not
become a permanent part of the real property (for example, a free-standing microwave or washing machine).
I understand that:
labor if it is determined that this work does not qualify as a capital improvement; and
transferred to me pursuant to this contract when the property installed by the contractor does not become a permanent part of the real property; and
Signature of customer
Title
Date
To be completed by the contractor
I, the contractor, certify that I have entered into a contract to perform the work described by the customer named above, and that I accept this form in good faith. (A copy of the written contract, if any, is attached.) I understand that my failure to collect tax as a result of accepting an improperly completed certificate will make me personally liable for the tax otherwise due, plus penalties and interest.
Signature of contractor or officer
This certificate is not valid unless all entries are completed.
ST-124 (2/12) (back)
Guidelines
When the customer completes this certificate and gives it to the contractor, who accepts it in good faith, it is evidence that the work to be performed will result in a capital improvement to real property.
A capital improvement to real property is an addition or alteration to real property that:
(a)substantially adds to the value of the real property or appreciably prolongs the useful life of the real property, and
(b)becomes part of the real property or is permanently affixed to the real property so that removal would cause material damage to the property or article itself, and
(c)is intended to become a permanent installation.
The work performed by the contractor must meet all three of these requirements to be considered a capital improvement. This certificate may not be issued unless the work qualifies as a capital improvement.
If a contractor performs work that constitutes a capital improvement, the contractor must pay tax on the purchase of building materials or other tangible personal property, but is not required to collect tax from the customer for the capital improvement.
For guidance as to whether a job is a repair or a capital improvement, see Publication 862, Sales and Use Tax Classifications of Capital Improvements and Repairs to Real Property.
A contractor, subcontractor, property owner, or tenant, may not use this certificate to purchase building materials or other
tangible personal property tax free.
of this certificate does not relieve the contractor of the liability for sales tax on the purchase of building materials or other tangible personal property subsequently incorporated into the real property as a capital improvement unless the contractor can legally issue Form ST-120.1, Contractor Exempt Purchase Certificate. (See Publication 862 for additional information.)
The term materials is defined as items that become a physical component part of real or personal property, such as lumber, bricks, or steel. This term also includes items such as doors, windows, sinks, and furnaces used in construction.
Floor covering
Floor covering such as carpet, carpet padding, linoleum and vinyl roll flooring, carpet tile, linoleum tile, and vinyl tile installed as the initial finished floor covering in new construction, a new addition to an existing building or structure, or in a total reconstruction of an existing building or structure, constitutes a capital improvement regardless of the method of installation. As a capital improvement, the charge to the property owner for the installation of floor covering is not subject to New York State and local sales and use taxes. However, the retail purchase of floor covering (such as carpet or padding) itself is subject to tax.
Floor covering installed other than as described above does not qualify as a capital improvement. Therefore, the charges for materials and labor are subject to sales tax. The contractor may apply for a credit or refund of any sales tax already paid on the materials.
The term floor covering does not include flooring such as ceramic tile, hardwood, slate, terrazzo, and marble. The rules
for determining when floor covering constitutes a capital improvement do not apply to such flooring. The criteria stated in (a), (b), and (c) above apply to such flooring.
A certificate is accepted in good faith when a contractor has no knowledge that the certificate is false or is fraudulently given, and reasonable ordinary due care is exercised in the acceptance of the certificate.
If a contractor gets a properly completed Form ST-124 from the customer within 90 days after rendering services, and accepts it in good faith, the customer bears the burden of proving the job or transaction was not taxable.
If you are a contractor who installs items such as washing machines, clothes dryers, dishwashers, refrigerators, furniture, etc., which when installed or placed in real property do not become part of the real property, you must collect tax on your charge for the installation. The individual charge for any of these items is also taxable as the sale of tangible personal property.
If a contractor does not get a properly completed Certificate of Capital Improvement within 90 days, the contractor bears the burden of proving the work or transaction was a capital improvement. The failure to get a properly completed certificate, however, does not change the taxable status of a transaction; a contractor may still show that the transaction was a capital improvement.
The contractor must keep any exemption certificate for at least three years after the due date of the last return to which it relates, or the date the return was filed, if later. The contractor must also maintain a method of associating an exempt sale made to a particular customer with the exemption certificate on file for that customer.
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After completing the New York State and Local Sales and Use Tax Certificate of Capital Improvement (Form ST-124), it's important to know what follows. This form, once filled out and signed by both the customer and the contractor, serves as verification that the work done is a capital improvement and not a standard taxable service. It's a crucial document for tax purposes, outlining the nature of the work and its permanency to the property. The contractor is mandated to keep this certificate as part of their records. Proper completion and retention of this form protect both the customer and contractor from potential tax liabilities. Here’s how to accurately fill out the form:
Once the form is fully completed and signed, the contractor is responsible for retaining it for a minimum of three years after the due date of the related tax return or the date the return was filed, whichever is later. This certificate plays a critical role in documenting that the work performed is a qualified capital improvement, thereby exempting it from sales tax. It is essential for both parties to ensure the accuracy and completeness of this certificate to avoid any potential tax liabilities.
What is the New York State ST-124 Form?
The New York State ST-124 Form, officially titled the New York State and Local Sales and Use Tax Certificate of Capital Improvement, is a document that once completed and signed by both the customer and the contractor, serves as evidence that the work to be performed is classified as a capital improvement on real property. This designation is significant because it changes the tax obligations related to the purchase of materials and the billing of work performed.
Who needs to complete the ST-124 Form?
This form must be filled out by both the customer (either the property owner or tenant) and the contractor performing the capital improvement. The customer section includes a declaration of the nature of the improvement, while the contractor section is an acknowledgment of entering into a contract for the specified work, accepting the form in good faith.
What qualifies as a capital improvement according to the ST-124 Form?
A capital improvement, as defined by the form, refers to an addition or alteration to real property that substantially adds value or extends its life, becomes part of or is permanently affixed to the real property in such a way that its removal would cause material damage, and is intended to be a permanent installation. All criteria must be met for the work to be classified as a capital improvement.
Can the ST-124 Form be used for the tax-exempt purchase of building materials?
No, the ST-124 Form cannot be used to purchase building materials or tangible personal property exempt from tax. Contractors are required to pay tax on the purchase of building materials used in a capital improvement. However, the completed and valid ST-124 exempts the contractor from collecting tax on the value of the capital improvement from the customer.
What are the consequences of not properly completing the ST-124 Form?
If the form is improperly completed or not accepted in good faith, the contractor may be held personally liable for any tax, penalty, and interest due. This means it is crucial for contractors to ensure that all sections of the form are fully and accurately completed and that they have no reason to believe the declaration is false.
How long must a contractor retain the ST-124 Form?
Contractors are required to keep a filed copy of any exemption certificate, including the ST-124 Form, for at least three years after the due date of the last tax return to which it relates or the date the return was filed, whichever is later. They must also establish a method to associate the exempt sale with the exemption certificate on file for that customer.
Where can one get assistance or more information regarding the ST-124 Form?
Additional guidance, including clarification on what constitutes a repair versus a capital improvement, is available from the New York State Department of Taxation and Finance's website. The Sales Tax Information Center provides telephone assistance for more direct inquiries. Resources such as Publication 862 can also offer detailed information regarding classifications of capital improvements and repairs to real property.
When completing the New York State and Local Sales and Use Tax Certificate of Capital Improvement (Form ST-124), accuracy and thoroughness are crucial to avoid the pitfalls that can lead to legal and financial consequences. Here are four common mistakes made during this process.
Ensuring the form is accurately and fully completed, properly classifying the nature of the work, understanding the limitations on the use of the form, and adhering to the guidelines for its retention are crucial steps in complying with tax requirements. Avoidance of these mistakes protects both the contractor and the customer from unnecessary legal repercussions and financial liabilities.
The guidelines provided alongside Form ST-124 serve as an extensive resource for contractors to differentiate between capital improvements and repairs or routine maintenance. It is imperative for individuals involved in real property transactions to familiarize themselves with these distinctions to comply effectively with New York State tax laws.
In the intricate landscape of construction and improvement projects, the New York State Department of Taxation and Finance ST-124 form plays a crucial role. Known as the Certificate of Capital Improvement, this document is not only a testament to the nature of the work being executed—whether it's a significant enhancement that adds value to a property—but also serves as a vital tool for tax compliance. However, navigating the complexities of construction documentation and tax obligations doesn't end with the ST-124 form. Several other forms and documents often accompany this certificate to ensure a seamless, compliant, and well-documented project progression.
Each of these documents plays a pivotal role in the successful management and completion of construction projects, serving specific needs ranging from legal compliance to financial accountability, and project planning. Together, they form a comprehensive documentation suite that, alongside the ST-124 form, ensures that capital improvement projects are not only executed according to plan but also meet all necessary legal and regulatory standards. Understanding how these documents interrelate and support one another is essential for anyone involved in the construction or improvement of real property.
The Idaho St 124 form, known formally as the New York State and Local Sales and Use Tax Certificate of Capital Improvement, shares similarities with various other forms used by contractors and property owners for tax exemption purposes on construction materials and labor. The form is a foundational document that certifies a capital improvement project, meaning the construction work being performed substantially adds value, prolongs the property's useful life, and is meant to become a permanent part of the property. This certificate, once completed and signed, serves as a shield for both the customer and the contractor from sales tax on the capital improvement work, although it explicitly excludes the use for the purchase of building materials from tax exemption.
One similar document is the Form ST-120, Resale Certificate. A resale certificate is used by purchasers when acquiring property they intend to resell in the course of their business operations. While the ST-124 is used specifically for capital improvements, the ST-120 enables businesses to purchase items or services tax-free that will be resold. Both forms serve the purpose of declaring certain transactions exempt from sales tax, but they cater to different types of transactions - the ST-124 focuses on permanent property improvements, whereas the ST-120 is geared towards reselling goods.
Another document that bears resemblance is the Form ST-120.1, Contractor Exempt Purchase Certificate. This form allows contractors to purchase materials and tangible personal property tax-free when such materials are designated for use in a capital improvement project. Similar to the ST-124 certificate, the ST-120.1 is vital for contractors. However, while the ST-124 certificate focuses more on the agreement between the contractor and the property owner, marking the work as a capital improvement, the ST-120.1 is specifically used when making purchases exempt from sales tax, for the materials that will be incorporated into the project.
The relationship between these documents highlights the nuanced approaches states take in managing and taxing capital improvements and sales transactions in the construction industry. Each form plays a crucial role in ensuring that the necessary tax exemptions are correctly applied and that both contractors and purchasers comply with the state's taxation laws regarding capital improvements and resale activities.
When completing the Idaho State ST-124 form for documenting a capital improvement project, it's important to follow the guidelines carefully to ensure accuracy and compliance. Below are key dos and don'ts:
Adhering to these dos and don'ts will help ensure that the capital improvement project is appropriately documented and compliant with New York State's tax laws. Remember, when in doubt, referring to Publication 862 or consulting a tax professional can offer further guidance.
Many people have misconceptions about the New York State Department of Taxation and Finance ST-124 Form, also known as the New York State and Local Sales and Use Tax Certificate of Capital Improvement. Let’s clear up some common misunderstandies regarding this form.
Understanding the proper use and requirements of the ST-124 form is essential for both contractors and customers involved in capital improvement projects. Keeping misconceptions in check ensures compliance with New York State tax laws and helps avoid potential penalties and interest.
Filling out and using the Idaho St 124 form, officially known as the New York State and Local Sales and Use Tax Certificate of Capital Improvement, involves a detailed process critical for both contractors and their customers. This document plays a crucial role in determining how sales and use tax applies to property improvements. Here are seven key takeaways to understand about this form:
This document not only helps in correctly identifying and documenting tax-exempt capital improvement projects but also outlines the responsibilities and requirements for both contractors and property owners or tenants. Proper completion and handling of the ST-124 form can prevent potentially costly tax-related issues down the line.
Idaho Form 96 - Use Form 967 to submit the state copy of W-2s and any 1099s with Idaho income tax withheld.
Form 96 - Master the OR 96 Idaho form, ensuring you include all relevant transactions like broker exchanges and secured property transactions in Idaho.