Tax Form Capital Improvement Details

Every business owner knows that tax season is a busy time. Between gathering your paperwork and dealing with the IRS, there's a lot to keep track of. One important form to fill out during tax season is Form St 124. This form is used to claim the research credit, and it's important to understand how to properly complete it if you want to take advantage of this tax credit. Here are some tips on how to correctly fill out Form St 124.

You may find information regarding the type of form you would like to fill out in the table. It will tell you just how long it will take to complete form st 124, what parts you will need to fill in and several other specific details.

QuestionAnswer
Form NameForm St 124
Form Length2 pages
Fillable?No
Fillable fields0
Avg. time to fill out30 sec
Other namesnys capital improvement form, capital improvement new york, capital improvement form, st 124 certificate of capital improvement

Form Preview Example

Department of Taxation and Finance

ST-124

NEW YORK STATE AND LOCAL SALES AND USE TAX

Certiicate of Capital Improvement

(12/15)

 

After this certiicate is completed and signed by both the customer and the contractor performing the capital improvement, it must be kept by the contractor. Copies of this certiicate must be furnished to all subcontractors on the job and retained as part of their records.

Read this form completely before making any entries.

This certiicate may not be used to purchase building materials exempt from tax.

Name of CONTRACTOR (print or type)

 

 

Name of customer (print or type)

 

 

 

 

 

 

 

 

Address (number and street)

 

 

Address (number and street)

 

 

 

 

 

 

 

 

City

State

ZIP code

City

State

ZIP code

Sales tax Certiicate of Authority number (if any)

To be completed by the customer

Describe capital improvement to be performed:

Project name

 

 

 

 

 

 

 

 

 

Street address (where the work is to be performed)

City

State

ZIP code

 

 

 

 

 

 

I certify that:

 

 

 

 

 

• I am the (mark an X in one)

owner

tenant of the real property identiied on this form; AND

 

 

the work described above will result in a capital improvement to the real property as outlined in the instructions of this form; AND

this contract (mark an X in one)

includes

does not include the sale of any items that will NOT become a permanent part of the

 

real property (for example, a free-standing microwave or washing machine).

I understand that:

I will be responsible for any sales tax, interest, and penalty due on the contractor’s total charge for tangible personal property and for labor if it is determined that this work does not qualify as a capital improvement; AND

I will be required to pay the contractor the appropriate sales tax on tangible personal property (and any associated services) when the property installed by the contractor does not become a permanent part of the real property; AND

I will be subject to civil or criminal penalties (or both) under the Tax Law if I issue a false or fraudulent certiicate.

Signature of customer

Title

Date

To be completed by the contractor

I, the contractor, certify that I have entered into a contract to perform the work described by the customer named above, and that I accept this form in good faith. (A copy of the written contract, if any, is attached.) I understand that my failure to collect tax as a result of accepting an improperly completed certiicate will make me personally liable for the tax otherwise due, plus penalties and interest.

Signature of contractor or oficer

Title

Date

This certiicate is not valid unless all entries are completed.

Page 2 of 2 ST-124 (12/15)

Instructions

When the customer completes this certiicate and gives it to the contractor, who accepts it in good faith, it is evidence that the work to be performed will result in a capital improvement to real property.

A capital improvement to real property is an addition or alteration to real property that:

(a)substantially adds to the value of the real property or appreciably prolongs the useful life of the real property, AND

(b)becomes part of the real property or is permanently afixed to the real property so that removal would cause material damage to the property or article itself, AND

(c)is intended to become a permanent installation.

The work performed by the contractor must meet all three of these requirements to be considered a capital improvement. This certiicate may not be issued unless the work qualiies as a capital improvement. See Tax Bulletin Capital Improvements

(TB-ST-104).

If a contractor performs work that constitutes a capital improvement, the contractor must pay tax on the purchase of building materials or other tangible personal property, but is not required to collect tax from the customer for the capital improvement. No credit or refund is allowed for the tax paid on the cost of materials by the contractor. See Tax Bulletin Contractors – Sales Tax Credits (TB-ST-130).

For guidance as to whether a job is a repair or a capital improvement, see Publication 862, Sales and Use Tax Classiications of Capital Improvements and Repairs to Real

Property.

A contractor, subcontractor, property owner, or tenant, may not use this certiicate to purchase building materials or other tangible personal property tax free. A contractor’s acceptance of this certiicate does not relieve the contractor of the liability for sales tax on the purchase of building materials or other tangible personal property subsequently incorporated into the real property as a capital improvement unless the contractor can legally issue Form ST-120.1, Contractor Exempt Purchase Certiicate. (See

Publication 862 for additional information.)

The term materials is deined as items that become a physical component part of real or personal property, such as lumber, bricks, or steel. This term also includes items such as doors, windows, sinks, and furnaces used in construction.

Floor covering

Floor covering such as carpet, carpet padding, linoleum and vinyl roll looring, carpet tile, linoleum tile, and vinyl tile installed as the initial inished loor covering in new construction, a new addition to an existing building or structure, or in a total reconstruction of an existing building or structure, constitutes a capital improvement regardless of the method of installation. As a capital improvement, the charge to the property owner for the installation of loor covering is NOT subject to New York State and local sales and use taxes. However, the retail purchase of loor covering (such as carpet or padding) itself is subject to tax.

Floor covering installed other than as described above does not qualify as a capital improvement. Therefore, the charges for materials and labor are subject to sales tax. The contractor may apply for a credit or refund of any sales tax already paid on the materials.

The term loor covering does NOT include looring such as ceramic tile, hardwood, slate, terrazzo, and marble. The rules for determining when loor covering constitutes a capital improvement do not apply to such looring. The criteria stated in (a), (b), and (c) above apply to such looring.

Temporary facilities at construction sites

Subcontracts to provide temporary facilities at construction sites that are necessary for the construction of a capital improvement are considered to be part of the capital improvement project.

Examples of temporary facilities include temporary:

heat, electric, or plumbing services;

protective pedestrian walkways; and

scaffolding services.

A primary contractor purchasing qualifying temporary facilities from a subcontractor must give the subcontractor a copy of Form ST-124 issued to the primary contractor by the customer (including a customer that is an exempt organization) to purchase the subcontractor’s services exempt from tax.

A certiicate is accepted in good faith when a contractor has no knowledge that the certiicate is false or is fraudulently given, and reasonable ordinary due care is exercised in the acceptance of the certiicate.

If a contractor gets a properly completed Form ST-124 from the customer within 90 days after rendering services, and accepts it in good faith, the customer bears the burden of proving the job or transaction was not taxable.

If you are a contractor who installs items such as washing machines, clothes dryers, dishwashers, refrigerators, furniture, etc., which when installed or placed in real property do not become part of the real property, you must collect tax on your charge for the installation. The individual charge for any of these items is also taxable as the sale of tangible personal property.

If a contractor does not get a properly completed Certiicate of Capital Improvement within 90 days, the contractor bears the burden of proving the work or transaction was a capital improvement. The failure to get a properly completed certiicate, however, does not change the taxable status of a transaction; a contractor may still show that the transaction was a capital improvement.

Contractors and subcontractors must keep any exemption certiicate for at least three years after the due date of the last return to which it relates, or the date the return was iled, if later. The contractor must also maintain a method of associating an exempt sale made to a particular customer with the exemption certiicate on ile for that customer.

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