Every dollar counts when you’re building a business. New York’s resale certificate (Form ST-120) lets you purchase inventory without paying sales tax upfront. That’s money you can reinvest in growth instead of tying up in taxes you’ll collect later anyway.
But here’s the catch: one mistake on this form can invalidate your exemption and expose you to penalties. Get it right, and you unlock immediate cash flow advantages. Get it wrong, and you’re looking at back taxes, fines, and potential audits.
At Hands Off Sales Tax (HOST), we handle the complexity so you don’t have to.
What You Need to Know About Form ST-120
Form ST-120 is your key to tax-free wholesale purchasing. When you hand this certificate to suppliers, you’re certifying that everything you buy will be resold, passing the sales tax obligation to your end customers where it belongs.
Who can use it?
In-State Businesses: If you’ve got a Certificate of Authority from New York, you’re good to go. This includes retailers, wholesalers, and anyone selling taxable goods or services.
Out-of-State Businesses: You can use Form ST-120 if you’re registered in another state AND either delivering goods directly to New York customers or reselling from outside New York. If your home state doesn’t issue registration numbers, write “not applicable” and include your business location.
Who can’t use it? Contractors must use Form ST-120.1 instead—not this form.
Modern convenience: New York accepts electronic certificates and digital signatures. Scan, email, PDF, all valid. No need to mail paper forms unless you prefer it.
Prerequisites Before Completing the Form
Before completing Form ST-120, it’s essential to ensure your business is properly registered and that you have all necessary information at hand.
Obtaining a Certificate of Authority
To legally collect sales tax in New York State, businesses must obtain a Certificate of Authority from the New York State Department of Taxation and Finance. This certificate authorizes your business to collect sales tax on taxable sales and to issue and accept most New York State sales tax exemption certificates.
Step-by-Step Guide to Registration:
- Create a NY.gov Business Account:
- Visit the New York Business Express portal
- If you don’t have an account, select “New Users, Register Here” to create one
- Prepare Required Information:
- Legal name of your business and any trade names
- Business address and contact details
- Federal Employer Identification Number (EIN)
- Names, addresses, and Social Security numbers of owners, partners, or responsible persons
- Description of the principal business activities
- Bank account information for the account where you’ll deposit sales taxes collected
- Any relevant license or permit numbers
- Your tax preparer’s information, if you’ll be using one to prepare your sales tax returns
- Complete the Application:
- Log in to your NY.gov Business Account
- Navigate to the application for a Certificate of Authority
- Fill out the application with the prepared information
- Submit the application at least 20 days before you begin selling taxable goods or services
Types of Certificates of Authority:
- Regular Certificate of Authority: Issued to businesses making taxable sales in New York State
- Temporary Certificate of Authority: Intended for businesses that plan to make taxable sales in New York State for no more than two consecutive sales tax quarters
Gathering Necessary Information
To accurately complete Form ST-120, ensure you have the following:
Business Details:
- Legal name and any trade names
- Business address and contact information
Certificate of Authority Number:
- This number is provided upon successful registration with the New York State Department of Taxation and Finance
Description of Goods Sold:
- A detailed list of the products or services your business sells, which will be purchased for resale
Having this information readily available will streamline the completion of Form ST-120 and ensure compliance with New York State regulations.
How to Fill Out Form ST-120
Need visual help? Search “How to fill out ST-120 New York” on YouTube for step-by-step video walkthroughs that show exactly where each piece of information goes.
Basic Information Enter the seller’s name and address, then your business name and address.
Choose Your Certificate Type
- Single-use: One purchase only
- Blanket: Multiple purchases from the same supplier
Note: Temporary vendors can only use single-use certificates.
Describe Your Business Example: “I operate an electronics retail business selling consumer electronics.”
Part 1 – New York Vendors Provide your Certificate of Authority number and check which applies:
- Option A: Buying goods to resell as-is or as components
- Option B: Buying services to resell
- Option C: Buying restaurant food/beverages for resale
Part 2 – Out-of-State Vendors State your home jurisdiction and registration number, then select:
- Option D: Goods shipped directly to your New York customers
- Option E: Goods resold from your out-of-state location
Sign and Date An owner, partner, or authorized officer must sign with their title.
Common Mistakes Don’t leave fields blank. Don’t use blanket certificates if you’re a temporary vendor. Never use this for personal purchases. Submit within 90 days of purchase.
Know the Rules
When to Use It Present Form ST-120 when buying anything you’ll resell. Retailers purchasing inventory, wholesalers buying stock, this is your tool.
When You Can’t Use It
- Personal purchases of any kind
- Office supplies, equipment, or anything for internal business use
- Motor fuel or diesel fuel
- Cigarettes (prepaid sales tax applies)
- Contractor materials and supplies (use Form ST-120.1 instead)
Using the certificate fraudulently triggers serious penalties: $50 per misuse plus 100% of the tax you should have paid. Criminal charges are possible too.
For Sellers: Validating Certificates You Receive
If you’re accepting resale certificates from customers, protect yourself by verifying them. New York holds you liable if you accept invalid certificates even accidentally.
Verification checklist:
- Receive the certificate within 90 days of sale
- Confirm all fields are completely filled out
- Verify the customer’s Certificate of Authority number (check online at tax.ny.gov)
- Keep the certificate on file for at least three years
New York offers “good faith” protection, so if you genuinely believed the certificate was valid and followed these steps, you’re protected from liability.
Your Responsibilities
Keep Meticulous Records Store all invoices, receipts, and sales documents for at least three years from your return’s due date (or filing date, whichever is later). New York can request these during audits.
Collect and Remit Tax As a Certificate of Authority holder, you must collect sales tax from your customers and file returns on time. The tax you collect isn’t yours. It belongs to New York.
What Happens When Things Go Wrong
Civil Penalties
- Fraudulent certificates: $50 each plus 100% of tax due
- Operating without registration: Up to $500 first day, then $200 daily (capped at $10,000)
Criminal Penalties False information on tax documents is a misdemeanor under Tax Law Section 1817(a). Fines and jail time are on the table.
In 2024, Sotheby’s paid $6.25 million to settle charges of helping clients dodge sales tax with bogus resale certificates. The state takes this seriously.
How HOST Takes the Headache Out of Compliance
Sales tax complexity kills time you could spend growing your business. HOST handles it all:
Registration Made Easy We’ll secure your Certificate of Authority and guide you through Form ST-120 correctly the first time.
Audit Protection When audits happen, we’ve got your back with expert defense and organized documentation.
Complete Tax Management
- Nexus analysis to identify obligations
- Certificate management through ResaleCertify
- Accurate, on-time filings
- Notice handling when states send confusing letters
We’ve focused exclusively on sales tax for over 25 years. You focus on sales. We handle the tax.
Take Control of Your Sales Tax
Form ST-120 saves you money when used correctly and costs you plenty when it’s not. From registration through record-keeping, every detail matters.
HOST simplifies the entire process. Whether you need help getting started or defending against audits, we bring expertise that protects your business.
Schedule your consultation today and get sales tax off your plate for good.
Frequently Asked Questions
What is Form ST-120 and who can use it?
Form ST-120 lets businesses purchase goods for resale without paying sales tax upfront. In-state businesses need a Certificate of Authority. Out-of-state businesses registered elsewhere can use it when shipping to New York customers or reselling from outside the state.
Can I use a blanket certificate for all my purchases?
Yes, blanket certificates cover multiple purchases from the same vendor. However, temporary vendors can only use single-use certificates.
What happens if I use Form ST-120 for personal purchases?
That’s fraud. You’ll face a $50 penalty per violation plus 100% of the tax owed. You must also report and pay use tax on personal items.
How long must I keep resale certificate records?
Three years minimum, starting from your return’s due date or filing date (whichever is later). Keep everything: forms, invoices, receipts, sales slips.
Does my resale certificate expire?
The certificate itself doesn’t expire. However, it’s only valid while your Certificate of Authority remains active, and that expires after three years. If your Certificate of Authority lapses, your resale certificates become invalid until you renew.
Can I use electronic/digital resale certificates?
Yes. New York accepts electronic certificates, scanned copies, and digital signatures. You can email PDF certificates to suppliers instead of mailing paper forms.
What’s the difference between a resale certificate and a Certificate of Authority?
Your Certificate of Authority registers you to collect sales tax. Form ST-120 is what you give suppliers to buy inventory tax-free. You need the first before the second means anything.
Can contractors use Form ST-120?
No. Contractors must use Form ST-120.1, the Contractor Exempt Purchase Certificate, for their specific situations.
