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Instructions for Use of the Certificate of Exemption for Contractors (Form S-3C)
(For use only in completion of qualified projects for exempt organizations)
All tangible personal property purchased by a the Vermont Sales and Use Tax otherwise due on tangible Page 2
contractor is taxable as the contractor is considered personal property covered by the certificate. Good faith
to be the end-user with the finished product normally depends upon a consideration of all the conditions
being real property, which is not subject to Vermont surrounding the transaction. To receive an exemption in
Sales and Use Tax. However, there are certain exemptions good faith, a seller is presumed to be familiar with the law
allowed for contractors purchasing materials: and the regulations pertinent to the business in which the
• When the contractor is working with a qualifying seller deals. In order for good faith to be established, all of
exempt organization the following conditions must be met:
• When the contractor is working on a specific a. The buyer must present the certificate prior to or
qualifying exempt project at the time of the purchase of the property.
Tangible personal property exempted from tax must be b. The certificate must contain no statement or entry
incorporated into the real estate, or the supplies must which the seller knows, or has reason to know, is
be used or consumed on the job. If the contractor buys false or misleading.
materials or supplies exempt from tax but uses them later in c. The certificate is on an exemption form issued by
a taxable project, the contractor must pay use tax on those the Vermont Department of Taxes or a form with
materials and supplies. Purchases of equipment and tools substantially identical language. Post Form & Instructions together
used by the contractor are subject to tax. d. The certificate must be dated and complete and in (Place at LAST page)
accordance with published instructions.
Qualifying Organizations & Projects e. The Vermont Sales and Use Tax account number is
A qualifying organization contracts to construct, provided on the certificate where applicable
reconstruct, alter, remodel, or repair any building structure f. The property to be purchased is of a type ordinarily
or public works project owned by the Federal government, used by the buyer for the purpose described on the 1 - 2
State of Vermont (and its agencies and subdivisions), or a certificate.
501(c)(3) as designated by the Internal Revenue Service
and registered with the Vermont Department of Taxes. Improper Certificate/Lack of Certificate
Please note that many nonprofit organizations, such as Sales of tangible personal property subject to tax which are
civic, social, and fraternal organizations, are not 501(c)(3)s not supported by properly executed exemption certificates
and not all 501(c)(3)s projects qualify for exemption. To are taxable retail sales. The burden of proof that the tax
qualify, the project must be used exclusively for public was not required to be collected is upon the seller.
purposes, and the project contract must be granted by an Retention of Certificates by the Seller
exempt organization. Turnkey projects are not exempt, Sellers must retain exemption certificates for at least three
even if the ultimate owner may be an exempt organization. years from the date of the last sale covered by the certificate
Qualifying Manufacturing Facility to document why tax was not collected from the buyer.
Under 32 V.S.A. § 9741(39), Sales of building materials Multiple Purchase Exemption Certificates
within any three consecutive years in excess of If the buyer presents a “Multiple Purchase” exemption
$1,000,000.00 in purchase value used in the construction, certificate to the seller, it may be used only when purchasing
renovation, or expansion of facilities which are used tangible personal property for use on the qualified exempt
exclusively, except for isolated or occasional uses, for the project as noted on this exemption certificate. For each
manufacture of tangible personal property for sale. purchase covered by the exemption certificate, the sales
Acceptance in “Good Faith” slip or invoice must show the buyer’s name and address
A seller who accepts an exemption certificate in “good sufficient to link the purchase to the exemption certificate
faith” is relieved of liability for collection or payment of on file.
Other types of exemption certificates that may be applicable are available on our website at: www.tax.vermont.gov.
For questions regarding how these exemption certificates may be properly applied, please contact the Vermont
Department of Taxes at (802) 828-2551.
Form S-3C Instructions
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Rev. 11/19
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