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SMART TAX USA - New York State and Local Sales and Use Tax Exempt Use Certificate

In New York State, the sales tax rate is 4%. All the counties in New York as well as some cities have an additional sales tax rate of 3% to 4.75%. Local taxes vary according to which goods or services are taxed and also by jurisdiction. In New York City, the total sales tax amounts to 8.875%.

In order to be able to use the New York State and Local Sales and Use Tax Exempt Use Certificate, a business must first register as a sales vendor and obtain a valid Certificate of Authority from the New York State Department of Taxation and Finance. The Certificate of Authority is a registration authorizing the collection of sales and use tax on the sale of taxable tangible personal property, rentals, specific taxable services and purchases of tangible personal property for resale in the State of New York. Companies located outside of New York State that have a sufficient business connection inside the state such as a customer base or employees, independent agents and service representatives must also register as a vendor, obtain a Certificate of Authority, collect and remit sales taxes.

New York State Sales Tax Exemptions for Manufacturers

According to New York State Sales Tax Publication 852, manufacturers, processors, generators, assemblers, refiners, miners and extractors, and other producers of goods and merchandise can establish production exemptions from sales tax. Production exemptions are applicable to purchases of machinery and equipment that are used directly and predominantly in a manufacturing production process. Some of New York State’s more important production exemptions that relate to manufacturing include:

purchases of raw materials used in manufacturing production and some supplies that become physical components of the final product for sale

purchases of machinery and equipment that are used more than 50% of the time in the production of tangible personal property, gas, electricity, refrigeration or steam for sale

purchases of machinery or equipment used directly and predominantly to manufacture food or to process foods for sale

charges for on-site assembly of production machinery and equipment that cannot be assembled before delivery because of size, weight or other physical factors

charges to repair, maintain or service exempt production machinery and equipment

costs for parts and tools used directly and predominantly in the production process

costs for cartons, containers, and other packaging materials that are used to package a product if they are transferred with the product to the consumer and become the property of the purchaser

purchases of safety apparel and safety supplies that are supplied to employees because they are considered to be indispensable to production

purchases of machinery and equipment used directly and predominantly in quality control of a manufactured product while it is still on the production line

capital improvements if they add substantially to the value of real property, become part of real property, or are permanently affixed to real property so that removal would cause material damage

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