Applying for Sales Tax Exemption as a Not-for-profit Organization in New York

Many religious and charitable organizations across the state of New York are able to apply for a special, sales tax exempt status. Sales tax exempt status allow purchasers within the organizations to make tax-free purchases that would otherwise be subject to New York State sales tax. In order to utilize this unique feature, one must obtain a sales tax exemption certificate issued by the New York State Tax Department and present the said certificate at the time of purchase.

For most organizations, there is a need to apply for this status. According to the New York State Department of Taxation and Finance, organizations that must apply for sales tax exempt status include:

• Not-for-profit religious, charitable, educations, or other 501(c)(3) organizations;
• United Nations and other international organizations; and
• United States armed forces posts and organizations.

Conversely, there are a handful of other organizations that do not need to apply for such status, as it is automatically granted. According to the New York State Department of Taxation and Finance, these organizations include:

• New York State and United States governmental entities; and
• Organizations that are organized and operated under some other New York State or federal statute that exempts them from state and/or local sales tax.

Filing an application for an exempt organization certificate, or Form ST-119, is simple. The New York State Department of Taxation and Finance’s application must be completed in its entirety. The application and all required supporting documents must be filed with the Department of Taxation and Finance, in accordance with the instructions stated on the Form ST-119.

If approved for the sales tax exemption certificate, it is important to note that the certificate can only be used to make purchases on behalf of the organization and is not for personal use. If an incorporator is found to be abusing the authority given by the certificate, he or she can be subject to fines upwards of $20,000 and possible imprisonment.

If your organization has questions about its tax-exempt status or other legal concerns, contact the attorneys at Wingate, Kearney & Cullen, LLP at (718) 852-5900 or fill out our contact form to schedule a consultation.