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Industrial development agencies and authorities

Industrial development agencies and authorities (IDAs) are established under the General Municipal Law and the Public Authorities Law to foster economic development in specific localities. They are public benefit corporations and are generally exempt from sales and use taxes (sales tax) on their purchases. For information about purchases made by IDAs, see Tax Bulletin Purchases and Sales by Governmental Entities (TB-ST-700).

Amendments enacted in 2013 changed the way that IDAs extend sales tax exemption benefits to their agents. TSB-M-14(1.1)S, Sales Tax Reporting and Recordkeeping Requirements for Industrial Development Agencies and Authorities, explains the changes made by the new law.

Agents appointed by an IDA

When IDAs create a project, they can appoint an agent or project operator (agents) to make purchases for the project. The IDA must file Form ST-60, IDA Appointment of Project Operator or Agent For Sales Tax Purposes, each time it appoints an agent for purposes of extending sales tax exemption benefits. Form ST-60 must be filed within 30 days of appointing an agent.

Agents can make purchases to acquire, build, and equip the project exempt from sales tax, including the additional 3/8% sales tax in the MCTD (if applicable), to the extent provided by the terms of the IDA project agreement. However, neither an IDA nor its agent can operate a business. Agents use Form ST-123, IDA Agent or Project Operator Exempt Purchase Certificate, or Form FT-123, IDA Agent or Project Operator Exempt Purchase Certificate for Fuel, to make qualifying purchases exempt from sales tax.
 
However, as neither an IDA nor its agent can operate a business, purchases by agents must be made under the terms of an IDA project contract to qualify for the exemption, and sales tax exemption benefits cannot be extended to the operation of a business outside the terms of the IDA project contract.
 
At the end of each calendar year, the agent must file Form ST-340, Annual Report of Sales and Use Tax Exemptions Claimed by Agent/Project Operator of Industrial Development Agency/Authority (IDA). This form is due on the last day of February in the following calendar year.

Recapture of certain sales tax exemption benefits

IDAs must remit recaptured sales tax exemption benefits to the Tax Department. IDAs use Form ST-65, IDA Report of Recaptured Sales and Use Tax Benefits, to remit sales tax exemption benefits  to the Tax Department for each person from whom it has obtained sales tax exemption benefits. This form must be filed within 30 calendar days from when the IDA comes into possession of the recaptured funds.
 
Every IDA must file Form ST-62, IDA Annual Compliance Report – State Sales Tax Recapture, within 90 days of the end of each fiscal year. The report must include the terms and conditions for the recapture of state sales tax exemption benefits as well as information about efforts the IDA has made to recapture any state sales tax exemption benefits.

Contractors who are not agents or project operators of an IDA

Contractors, subcontractors, and repairmen who are not agents of an IDA can still make purchases that are exempt from sales tax pursuant to Tax Law §§ 1115(a)(15) and 1115(a)(16). To qualify for this exemption, contractors, subcontractors and repairmen must present their suppliers with Form ST-120.1, Contractor Exempt Purchase Certificate.  Exempt purchases made pursuant to these sections include purchases of tangible personal property used to:

  • erect a building or structure;
  • add, alter, or improve real property; or
  • maintain, service, or repair a building, structure, or real property.

Pursuant to Tax Law §§ 1115(a)(15) and 1115(a)(16), the tangible personal property must become an integral component part of the IDA project's structure, building, or real property and the IDA must own the structure, building, or real property. 

Information

  • TSB-M-14(1.1)S, Sales Tax Reporting and Recordkeeping Requirements for Industrial Development Agencies and Authorities
  • N-13-3, New Reporting Requirement for Industrial Development Agencies and Authorities
  • TSB-M-97(11)S, An IDA Must Provide Notice of Appointment of Agent or Project Operator
  • How to submit Form AU-11, Application for Credit or Refund of Sales or Use Tax

Forms

  • ST-60, IDA Appointment of Project Operator or Agent For Sales Tax Purposes
  • ST-62, IDA Annual Compliance Report – State Sales Tax Recapture
  • ST-65, IDA Report of Recaptured Sales and Use Tax Benefits
  • ST-120.1, Contractor Exempt Purchase Certificate
  • ST-123, IDA Agent or Project Operator Exempt Purchase Certificate - Effective for projects beginning on or after June 1, 2014
  • ST-340, Annual Report of Sales and Use Tax Exemptions Claimed by Agent/Project Operator of Industrial Development Agency/Authority (IDA)
  • FT-123, IDA Agent or Project Operator Exempt Purchase Certificate for Fuel
  • AU-11, Application for Credit or Refund of Sales or Use Tax

Links

New York State Economic Development Council:  http://www.nysedc.org

New York State Authorities Budget Office:  http://www.abo.ny.gov/

Additional resources

General Municipal Law (GML)

Public Authorities Law (PAL)

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