Department of Taxation and Finance 

                                                        New York State and Local Sales and Use Tax                                               ST-124(12/15)
                                                        Certificate of Capital Improvement

                    After this certificate 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 certificate 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 certificate 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 Certificate 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  Xin one)        owner tenant of the real property identified 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 certificate.
                     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 certificate will make me personally liable for the tax otherwise due, plus penalties and interest.
                     Signature of contractor or officer                                    Title                                                 Date

                                                          This certificate is not valid unless all entries are completed.

Page 2 of 2  ST-124 (12/15) 
                                                              Instructions
When the customer completes this certificate and gives it to the          Temporary facilities at construction sites
contractor, who accepts it in good faith, it is evidence that the         Subcontracts to provide temporary facilities at construction sites 
work to be performed will result in a capital improvement to real         that are necessary for the construction of a capital improvement 
property.                                                                 are considered to be part of the capital improvement project. 
A capital improvement to real property is an addition or alteration       Examples of temporary facilities include temporary:
to real property that:                                                    •  heat, electric, or plumbing services;
(a) substantially adds to the value of the real property or               •  protective pedestrian walkways; and
appreciably prolongs the useful life of the real property, and            •  scaffolding services.
(b) becomes part of the real property or is permanently affixed 
to the real property so that removal would cause material                 A primary contractor purchasing qualifying temporary facilities 
damage to the property or article itself, and                             from a subcontractor must give the subcontractor a copy of 
                                                                          Form ST-124 issued to the primary contractor by the customer 
(c) is intended to become a permanent installation.                       (including a customer that is an exempt organization) to 
The work performed by the contractor must meet all three of               purchase the subcontractor’s services exempt from tax.
these requirements to be considered a capital improvement.                A certificate is accepted in good faith when a contractor has no 
This certificate may not be issued unless the work qualifies as           knowledge that the certificate is false or is fraudulently given, 
a capital improvement. See Tax Bulletin Capital Improvements              and reasonable ordinary due care is exercised in the acceptance 
(TB-ST-104).                                                              of the certificate.
If a contractor performs work that constitutes a capital                  If a contractor gets a properly completed Form ST-124 from the 
improvement, the contractor must pay tax on the purchase                  customer within 90 days after rendering services, and accepts it 
of building materials or other tangible personal property, but            in good faith, the customer bears the burden of proving the job 
is not required to collect tax from the customer for the capital          or transaction was not taxable.
improvement. No credit or refund is allowed for the tax paid 
on the cost of materials by the contractor. See Tax Bulletin              If you are a contractor who installs items such as washing 
Contractors – Sales Tax Credits (TB-ST-130).                              machines, clothes dryers, dishwashers, refrigerators, furniture, 
                                                                          etc., which when installed or placed in real property do not 
For guidance as to whether a job is a repair or a capital                 become part of the real property, you must collect tax on your 
improvement, see Publication 862, Sales and Use Tax                       charge for the installation. The individual charge for any of these 
Classifications of Capital Improvements and Repairs to Real               items is also taxable as the sale of tangible personal property.
Property.
                                                                          If a contractor does not get a properly completed Certificate of 
A contractor, subcontractor, property owner, or tenant, may               Capital Improvement within 90 days, the contractor bears the 
not use this certificate to purchase building materials or other          burden of proving the work or transaction was a capital 
tangible personal property tax free. A contractor’s acceptance            improvement. The failure to get a properly completed certificate, 
of this certificate does not relieve the contractor of the liability for  however, does not change the taxable status of a transaction; a 
sales tax on the purchase of building materials or other tangible         contractor may still show that the transaction was a capital 
personal property subsequently incorporated into the real property        improvement.
as a capital improvement unless the contractor can legally issue 
Form ST-120.1, Contractor Exempt Purchase Certificate. (See               Contractors and subcontractors must keep any exemption 
Publication 862 for additional information.)                              certificate for at least three years after the due date of the last 
                                                                          return to which it relates, or the date the return was filed, if later. 
The term materials is defined as items that become a physical             The contractor must also maintain a method of associating an 
component part of real or personal property, such as lumber,              exempt sale made to a particular customer with the exemption 
bricks, or steel. This term also includes items such as doors,            certificate on file for that customer.
windows, sinks, and furnaces used in construction.
                                                                           
Floor covering                                                            Need help?
Floor covering such as carpet, carpet padding, linoleum and 
vinyl roll flooring, carpet tile, linoleum tile, and vinyl tile installed  Visit our website at www.tax.ny.gov
as the initial finished floor covering in new construction, a              •  get information and manage your taxes online
new addition to an existing building or structure, or in a total           •  check for new online services and features
reconstruction of an existing building or structure, constitutes a 
capital improvement regardless of the method of installation. As           Telephone assistance
a capital improvement, the charge to the property owner for the 
installation of floor covering is not subject to New York State and       Sales Tax Information Center:                  (518) 485-2889
local sales and use taxes. However, the retail purchase of floor 
covering (such as carpet or padding) itself is subject to tax.            To order forms and publications:               (518) 457-5431
                                                                          Text Telephone (TTY) Hotline (for persons with 
Floor covering installed other than as described above does                 hearing and speech disabilities using a TTY):  (518) 485-5082
not qualify as a capital improvement. Therefore, the charges for 
materials and labor are subject to sales tax. The contractor may           Persons with disabilities: In compliance with the 
apply for a credit or refund of any sales tax already paid on the          Americans with Disabilities Act, we will ensure that our 
materials.                                                                 lobbies, offices, meeting rooms, and other facilities are
                                                                          accessible to persons with disabilities. If you have questions 
The term floor covering does not include flooring such as                 about special accommodations for persons with disabilities, call the 
ceramic tile, hardwood, slate, terrazzo, and marble. The rules            information center.
for determining when floor covering constitutes a capital 
improvement do not apply to such flooring. The criteria stated in         Privacy notification
(a), (b), and (c) above apply to such flooring.                           See our website or Publication 54, Privacy Notification.