A New York resale certificate is a document a purchaser gives a seller to support buying eligible goods or services without sales tax because the purchase is for resale. The main form is Form ST-120, Resale Certificate. It is not a sales tax permit, and it does not make every purchase by a reseller tax-free: the purchase must qualify for resale and the certificate must be completed and used correctly.
The New York State Department of Taxation and Finance administers the state’s sales tax. Businesses register through the NY Business Express / Online Services portal when registration is required. New York’s economic-nexus test is distinctive: it uses both a sales-dollar threshold and a transaction-count threshold, so meeting only one does not satisfy that test. Whether you must register can also depend on other activities and facts; confirm your position with the Department or ask us to review it.
Understand New York resale and exemption certificates
An exemption certificate documents why a particular purchase or sale is not subject to sales tax. A resale certificate is one kind of exemption certificate: it applies when a purchaser buys property or services for resale in the ordinary course of business. The seller keeps the certificate as support for not collecting tax on the qualifying transaction.
New York has different forms for different exemption grounds. Form ST-120 is for resale; other forms address specific uses or purchaser categories. A certificate is not a general exemption for business expenses, and a purchaser cannot use a resale claim for items it will consume, use, or keep rather than resell. The form’s instructions and the facts of the transaction determine whether the claim fits.
Know when a New York exemption certificate is needed
If you sell taxable property or services and a customer claims an exemption, obtain the certificate or other documentation that supports the specific claim. For a resale transaction, the customer generally gives you Form ST-120. The New York State Department of Taxation and Finance says a properly completed certificate should be provided at the time of sale; it generally must be received within 90 days after the sale to qualify for the stated protection for a seller accepting it in good faith.
As a purchaser, give the certificate to the seller for the qualifying purchase, not as a substitute for paying tax on unrelated purchases. If you cannot establish that the transaction qualifies, ask the seller to charge tax or confirm the treatment with the Department. The exact position can depend on what is sold, where it is delivered, and how the purchaser will use or resell it.
Check who can use certificates and for which purchases
A business that buys eligible items for resale may use Form ST-120 for those purchases, subject to the form’s requirements. A reseller should be able to explain how the goods or services will be resold and should not claim exemption for inventory or services it will use itself. Construction contractors, for example, should not assume that the resale form applies to their purchases; New York provides separate forms for certain contractor transactions.
An out-of-state business may use Form ST-120 in a limited situation even if it is not registered or required to register in New York. The Department describes a qualified out-of-state purchaser as one registered in another jurisdiction, or located where registration is not required, that buys tangible personal property for resale in specified New York delivery arrangements. This limited use does not extend to taxable services for resale in New York; buying those services may make the purchaser a New York vendor required to register. Check the Department’s current drop-shipment guidance against your exact transaction.
Choose the right New York exemption certificate form
Start with the reason the purchase is exempt, then use the form designed for that reason. Form ST-120 supports resale. Form ST-121 is an Exempt Use Certificate for qualifying purchases, rentals, or leases of property or services for an exempt use. Other forms cover particular purchaser types or transactions, including certain contractor purchases. Do not select a form simply because it is familiar or because a customer asks you to.
For ecommerce sellers, pay particular attention to who is buying from whom in a drop shipment. A seller’s purchase from a supplier and its retail sale to the end customer are separate transactions, and the correct certificate depends on the parties’ registration status, the property, and delivery details. New York’s Department publishes specific drop-shipment guidance. If the chain of sales does not fit the stated conditions, do not assume ST-120 resolves the tax treatment.
Complete and verify certificates correctly
Use the current version of the applicable New York form and follow its instructions. For Form ST-120, the purchaser completes the required identifying and transaction information, describes the property or services being purchased for resale, states the basis for the claim, and signs and dates the certificate. The purchaser gives it to the seller; the seller retains it. Missing required entries can make a certificate invalid.
As a seller, check that the form is complete, the stated exemption matches the transaction, and the customer’s explanation is plausible in light of what you sell and how the order is fulfilled. New York’s Department says a seller’s protection depends on accepting a valid certificate in good faith, having it within the applicable period, and retaining a properly completed document. Keep a reliable link between each exempt invoice and the certificate that supports it. A certificate is evidence, not permission to ignore facts that indicate the claim is false or does not apply.
Manage, retain, and update customer certificates
Keep certificates in an organized record system that lets you retrieve the document and connect it to the relevant customer and exempt sales. New York requires sellers to retain exemption certificates for at least three years after the due date of the return to which they relate, or the date the return was filed if later. The Department may require records to be kept longer in some circumstances, including when a matter remains pending, so do not destroy records solely because the minimum period has passed without checking whether an issue is open.
Review certificates when a customer’s business, registration, purchasing pattern, or claimed exemption changes. A blanket certificate may cover additional purchases only within its permitted scope; it is not a blanket approval for unrelated goods or services. Ask for an updated or transaction-specific certificate when the existing document no longer accurately supports the sale. Keep the certificate and invoice together or maintain another dependable way to associate them.
Confirm registration and New York seller obligations
A Certificate of Authority is New York’s sales tax registration credential for vendors required to collect tax. Most sellers must have a valid Certificate of Authority to accept exemption certificates, although the Department identifies exceptions, including certain out-of-state purchasers using ST-120 in the limited circumstances described in its guidance. A resale certificate is not a Certificate of Authority: one supports an exempt purchase, while the other concerns a vendor’s authority and obligations to collect sales tax.
Register through the NY Business Express / Online Services portal when your activities require New York sales tax registration. New York’s economic-nexus test is conjunctive: both the applicable sales-dollar amount and transaction count must be met for that test. Do not rely on a single threshold in isolation, and do not assume that failing the economic-nexus test ends the inquiry; other New York connections or activities may create obligations. The Department’s current rules and your business facts determine the result.
Avoid certificate misuse and seller liability
New York places the burden of supporting an exempt sale on the seller. If a transaction lacks a valid certificate or other adequate support, it may be treated as a taxable retail sale, leaving the seller exposed to tax, interest, or penalties as applicable. A seller should not accept a certificate that is incomplete, inconsistent with the sale, or known to be false. Good-faith acceptance requires attention to the circumstances, not merely storing a form.
Purchasers also carry risk. Using a resale certificate for goods or services that are not actually being resold can leave the purchaser responsible for tax and related amounts. If an exemption claim is uncertain, pause the transaction, collect tax where appropriate, or obtain a fact-specific determination from the New York State Department of Taxation and Finance. Do not treat a customer’s certificate as proof that every sale to that customer is exempt.
Get hands-on help managing certificate compliance
Certificate compliance involves more than collecting forms: a business needs to identify the correct form, check whether registration is required, validate the claim against the transaction, and preserve records that support each exempt sale. This is especially important for ecommerce and cross-border sellers handling multiple suppliers, customer locations, and drop-shipment arrangements.
Sales Tax Compliance USA is a done-for-you service staffed by people, not sales tax software. We can review your New York sales and purchasing flows, help determine which certificates are appropriate, organize customer documentation, and assess registration and seller obligations. The exact position depends on your circumstances; confirm it with the New York State Department of Taxation and Finance, or talk to us and we will check it for you.
Common New York certificate situations and the form or treatment to check
| Purchase or transaction | New York form or treatment to check |
|---|---|
| Tangible personal property or services bought for qualifying resale | Form ST-120; use only for the resale claim described in its instructions |
| Property or services bought, rented, or leased for a qualifying exempt use | Form ST-121; confirm the specific exempt-use conditions |
| Contractor purchase connected with a qualifying exempt project or transaction | Check the applicable contractor certificate, such as Form ST-120.1; do not assume ST-120 applies |
| Out-of-state purchaser buying tangible personal property for resale in a qualifying New York delivery arrangement | Limited use of Form ST-120 may be available; check New York’s drop-shipment guidance |
| Out-of-state purchaser buying taxable services for resale in New York | ST-120 is not available for this described use; the purchase may create a vendor registration obligation |
| Business supplies, equipment, or other items the purchaser will use rather than resell | A resale claim generally does not fit; determine whether another specific exemption applies or tax is due |
Frequently asked questions
What is a New York resale certificate?
It is a document a purchaser gives a seller to support buying eligible property or services without sales tax because the purchase is for resale. New York’s main resale form is Form ST-120. It applies only to qualifying resale purchases and is not a sales tax registration credential.
How do I get a resale certificate in New York?
Get the current Form ST-120 from the New York State Department of Taxation and Finance, complete the required purchaser and transaction information, and give it to your seller. A resale certificate is not the same as a Certificate of Authority. If your business must register as a New York vendor, use the NY Business Express / Online Services portal to address that separate requirement.
What is Form ST-120 used for?
Form ST-120 is New York’s Resale Certificate. A purchaser uses it to support a tax-exempt purchase of property or services that it will resell, subject to the form’s instructions and applicable New York rules. It cannot be used as a general exemption for items the purchaser will consume or keep.
Do I need a Certificate of Authority to use a New York resale certificate?
A purchaser’s resale certificate and a vendor’s Certificate of Authority serve different purposes. Most sellers must have a valid Certificate of Authority to accept exemption certificates, but New York recognizes limited exceptions, including certain qualified out-of-state purchasers using ST-120. Check the Department’s current instructions for your role and transaction.
Can an out-of-state business use a New York resale certificate?
Yes, in a limited situation. New York allows a qualified out-of-state purchaser to use ST-120 for certain purchases of tangible personal property for resale involving specified New York delivery arrangements. The exception does not cover taxable services bought for resale in New York, and the transaction may create a registration obligation; check the Department’s drop-shipment guidance.
How do I fill out a New York sales tax exemption certificate?
Use the current form that matches the exemption, complete every required field, describe the qualifying purchase or use accurately, and sign and date it as instructed. Give it to the seller and retain a copy with the related purchase records. For ST-120, the purchaser must be claiming a genuine resale purchase, not an ordinary business expense.
Does a New York resale certificate expire?
The Department’s general certificate guidance does not set a single universal expiration date for every resale certificate. A certificate should remain accurate and applicable to the purchases it supports; update or replace it when the customer’s information, exemption basis, or purchasing circumstances change. Check the current ST-120 instructions for any form-specific requirements.
How long does a seller need to keep an exemption certificate?
New York requires a seller to keep an exemption certificate for at least three years after the due date of the return to which it relates, or the date the return was filed if later. The seller should also be able to associate the certificate with the exempt invoice or sale. Keep records longer if a tax matter is pending or the Department requires it.
How we handle this for you
The mechanics in New York are manageable on their own; the cost is the time it takes every single filing period, in every state you are registered in. We are a managed service: our team registers you with the New York State Department of Taxation and Finance, prepares and files your returns, and keeps you compliant period after period. You get one point of contact and one invoice — you do not get another dashboard to learn.
See our sales tax compliance services, check where you have obligations with the nexus calculator, or talk to us about New York.
Official sources
- https://www.tax.ny.gov/pubs_and_bulls/tg_bulletins/st/exemption_certificates_for_sales_tax.htm
- https://www.tax.ny.gov/pdf/current_forms/st/st120_fill_in.pdf
- https://www.tax.ny.gov/pubs_and_bulls/tg_bulletins/st/drop_shipments.htm
- https://www.tax.ny.gov/pdf/publications/sales/pub750.pdf
- https://www.tax.ny.gov/pdf/publications/sales/pub900.pdf
Reviewed by Paul le Roux, CA(SA). Sales Tax Compliance USA handles US sales tax registration, filing and remittance for cross-border and domestic ecommerce sellers as a fully managed service.
This page is general information for educational purposes and does not constitute legal or tax advice. Sales tax rules change and depend on your specific facts. Consult a qualified tax professional about your own position.
Related guides
Other New York guides: Amazon FBA · Audit defence · Back sales tax · Deregistration · Economic nexus · Filing
Resale certificates in nearby states: New Jersey
Selling into several states? Check where you have crossed a threshold with the free nexus diagnostic, see the full 51-state threshold table, or browse every state guide.