Cert 123 Form – Fill Out and Use This PDF

Department of Revenue Services

State of Connecticut

Taxpayer Services Division

25 Sigourney Street

Hartford CT 06106-5032

(Rev. 01/05)

CERT-123

General Purpose: Exempt organizations or qualifying governmental agencies should use this certificate to establish that their purchases of meals or lodging are exempt from sales and use taxes. This certificate may be used only if these four conditions are met:

1.The retailer directly invoices and charges the exempt organization or qualifying governmental agency for the meals or lodging;

2.The exempt organization or qualifying governmental agency directly pays the retailer with a check drawn on its own account or with a credit card issued in its own name;

3.The exempt organization or qualifying governmental agency is not reimbursed, in whole or in part, by donation or otherwise, for its payment for the meals or lodging by those consuming the meals or lodging; and

4.The purchase of the meals or lodging occurs before the expiration date specified on the blanket certificate.

Statutory Authority: Conn. Gen. Stat. §12-412(1)(A), (8) and (94).

Credit Card Purchases: If a credit card is used to pay the retailer of meals or lodging, the card must be issued in the name of the exempt organization or qualifying governmental agency. The credit card must be used exclusively to make purchases for the use of the exempt organization or qualifying governmental agency (not for the convenience of its officers, employees or members). The credit card charges must be paid by a check drawn on the organization’s or agency’s own checking account.

Nonqualifying Purchases: This certificate may not be used (and tax must be paid) on the purchase of meals or lodging not meeting all four of the conditions above. Nonqualifying purchases include fund raisers where those who attend are charged or are required to make any payment and seminars or conferences where meals or lodging are provided at no extra charge to those paying the conference or seminar registration fee.

However, a qualifying exempt organization may purchase meals exempt from tax using CERT-119, Purchases of Tangible Personal Property and Services by Qualifying Exempt Organizations, or CERT-134, Exempt Purchases by Qualifying Governmental Agencies, and does not have to get prior approval from the Department of Revenue Services (DRS), when the organization will resell the meals at one of five fundraising or social events per year that is exempt from tax under Conn. Gen. Stat. §12-412(94). See Special Notice 98(11), Exemption From Sales and Use Taxes of Sales by Nonprofit Organizations at Fundraising or Social Events.

Purchases Not Requiring Preapproval: The federal government recently implemented the “GSA SmartPay” program, which uses four categories of credit cards: Fleet, Purchase, Travel, and Integrated cards. Federal employees may purchase meals and lodging tax exempt by using certain GSA SmartPay cards when the purchases are billed to and paid by the federal government. U.S. government agencies making tax-exempt purchases of meals and lodging using GSA SmartPay cards are not required to get preapproval for these purchases from DRS and are not required to provide the retailer with CERT-112, Exempt Purchases of Meals or Lodging by Exempt Entities. See Policy Statement 2000(1.1), Retailer’s Acceptance of U.S. Government “GSA SmartPay” Credit Card for Exempt Purchases.

Instructions for the Purchaser: An officer of an exempt organization or qualifying governmental agency must complete and sign this certificate and submit it to DRS for qualifying exempt purchases of meals or lodging during a one year period. If the purchaser is an exempt organization, it must attach either a copy of its I.R.C. §501(c)(3) or (13) determination letter issued by the U.S. Treasury Department or, if it was issued an exemption permit by DRS, enter its exemption permit number on CERT-123. If the purchaser is a

qualifying governmental agency, no attachment is required. If DRS concludes that qualifying exempt purchases are being made, the certificate, with DRS official approval noted, will be returned to the exempt organization or qualifying governmental agency. The exempt organization or qualifying governmental agency must then provide the approved CERT-123 to the retailer of meals or lodging. Keep a copy of this certificate, documents attached, and records that substantiate the information on this certificate for at least six years from the date it is issued.

Events That Qualify for Refund Only: If the exempt organization or qualifying governmental agency will be paying (and will not be reimbursed, in whole or in part) for the meals or lodging of some of the attendees but will be reimbursed in whole or in part for the meals or lodging of others, a preapproved exemption will not be issued. The exempt organization or qualifying governmental agency must pay tax on all the meals or lodging at the time of the purchase. However, DRS will refund the tax on those meals or lodging that were paid for by the exempt organization or qualifying governmental agency for which it was not reimbursed. The exempt organization or qualifying governmental agency must file, and DRS must approve, CERT-122, Refund of Sales Tax Paid on Purchases of Meals or Lodging by Exempt Entities. The exempt organization or qualifying governmental agency is not eligible for refund of tax paid on those meals or lodging for which it received full or partial reimbursement. See Policy Statement 2003(4), Purchases of Meals or Lodging by Exempt Entities, for additional information.

Example 1: B, an exempt organization, sponsors a dinner at a restaurant to honor one of its members. The restaurant charges B $50 per meal and B sells tickets for $50 per person. The honoree and members of the immediate family attend as guests of the exempt organization. B must pay sales tax on all meals purchased. It may, however, complete and file CERT-122 to claim a refund of the taxes paid only on meals consumed by the honoree and members of the immediate family.

Example 2: C, an exempt organization, sponsors a retirement dinner at a restaurant to honor one of its employees. The restaurant charges C $60 per meal. C sells tickets for $50 per person and pays the $10 difference to the restaurant from its own funds. C must pay sales tax on the full price of all meals purchased. Because the organization received partial reimbursement for all of the meals, C is not eligible for a refund of any of the tax paid.

Instructions for Retailer of Meals or Lodging: Accept this certificate only if you directly invoice and charge the exempt organization or qualifying governmental agency for the meals or lodging. Accept the certificate only if you are directly paid by the exempt organization or qualifying governmental agency with a check drawn on the exempt organization’s or qualifying governmental agency’s own checking account or with a credit card issued in the organization’s or agency’s name (not in the name of one of its members, employees or officers). Cash payments will not satisfy this condition, regardless of the cost of the meals or lodging.

Acceptance of this certificate, when properly completed and with DRS official approval noted, relieves the retailer from the burden of proving the sale of meals or lodging is not subject to sales and use taxes. This certificate is valid only if taken in good faith from an exempt organization or qualifying governmental agency.

Keep a copy of this certificate, the attached documents, and bills or invoices to the purchaser for at least six years from the date the meals or lodging were purchased. The bills, invoices or records covering the purchase made under this certificate must be marked “Exempt Under CERT-123” to indicate an exempt purchase has occurred.