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ST-121.5 (7/11) (back)
Instructions
An operator of an Internet data center may use Form ST-121.5 to subsequent purchases, and will remain in effect until the percentage
purchase tangible personal property or services exempt from tax to changes again.
the extent they are used in the operation of an Internet data center If you cannot, in good faith, determine the exempt percentage, you
located in this state. An operator of an Internet data center is a person must pay tax at the time of purchase and request a refund. If you
that (i) provides Internet Web site services for sale and (ii) provides estimate too high a percentage as exempt, you must pay tax on the
at this center the Internet Web site services of uninterrupted Internet portion that turns out to be taxable.
access to customers’ Web pages (twenty-four hours a day, seven days
a week, three hundred sixty-five days a year) and continuous
management of Internet traffic for the customers’ Web pages. An To the seller
operator of an Internet data center that is primarily engaged at the data The purchaser must give you an exemption certificate with all required
center in the retail sale of its own Internet access service (as defined entries completed no later than 90 days after delivery of the property
in section 1115(v) of the Tax Law) is not considered to be providing or service sold, or the sale will be deemed to have been taxable at
Internet Web site services for sale. Therefore, purchases by such an the time of the transaction. If you receive a certificate after the 90-day
operator do not qualify for exemption from tax. Primarily engaged period, both you and the purchaser assume the burden of proving the
means that more than 50% of the use of all the property in an Internet sale was exempt. Additional substantiation may be required.
data center that would otherwise be exempt from tax as Internet data In addition, if you fail to collect tax as a result of accepting an
center property, is used for providing an Internet access service. improperly completed exemption certificate, you become personally
Complete all required entries on the front of the form and give it to the liable for the tax plus any penalty and interest charges due, unless
seller. the certificate is corrected within a reasonable period of time. You
must keep this exemption certificate for at least three years after the
You may use Form ST-121.5 as a blanket certificate covering the first due date of the last return to which it relates, or the date the return
and subsequent purchases of the same general type of property or was filed, if later. You must also maintain a method of associating
service. However, each subsequent sales slip or purchase invoice an exempt sale made to a particular customer with the exemption
based on this blanket certificate must show the purchaser’s name and certificate you have on file for that customer.
address.
Note: Contractors may purchase qualifying tangible personal Misuse of this certificate
property for use in an Internet data center exempt from tax only Misuse of this exemption certificate may subject you to serious civil
when the property is to be incorporated into the real property of the and criminal sanctions in addition to the payment of any tax and
Internet data center as a capital improvement. They may also make interest due. These include:
tax-exempt purchases of services to install, maintain, service, or repair • A penalty equal to 100% of the tax due;
tangible personal property used for Web hosting. See Form ST-120.1,
Contractor Exempt Purchase Certificate. • A $50 penalty for each fraudulent exemption certificate issued;
• Criminal felony prosecution, punishable by a substantial fine and a
Part 1 — Exemptions for tangible personal property possible jail sentence; and
You may purchase, exempt from tax, machinery, equipment, and other • Revocation of your Certificate of Authority, if you are required to be
tangible personal property for use in the operation of the Internet data registered as a vendor.
center. The tangible personal property that is covered by this
exemption includes the following: See TSB-M-09(17)S, Amendments that Encourage Compliance with
the Tax Law and Enhance the Tax Department’s Enforcement Ability,
• computer system hardware, such as servers and routers; for more information.
• pre-written computer software;
• storage racks and cages for computer equipment; Privacy notification
• property related to building systems designed for an Internet data The Commissioner of Taxation and Finance may collect and maintain personal
information pursuant to the New York State Tax Law, including but not limited to,
center, such as interior fiber optic and copper cables; sections 5-a, 171, 171-a, 287, 308, 429, 475, 505, 697, 1096, 1142, and 1415
• property necessary to maintain the appropriate climate-controlled of that Law; and may require disclosure of social security numbers pursuant to
environment, such as air-filtration equipment, air-conditioning 42 USC 405(c)(2)(C)(i).
equipment, and vapor barriers; This information will be used to determine and administer tax liabilities and,
• property related to fire control, such as fire-suppression equipment when authorized by law, for certain tax offset and exchange of tax information
and alarms; programs as well as for any other lawful purpose.
• power generators and power conditioners; Information concerning quarterly wages paid to employees is provided to
certain state agencies for purposes of fraud prevention, support enforcement,
• property related to providing a secure environment, such as evaluation of the effectiveness of certain employment and training programs and
protective barriers; other purposes authorized by law.
• property that constitutes raised flooring when installed; and Failure to provide the required information may subject you to civil or criminal
• other similar property. penalties, or both, under the Tax Law.
This information is maintained by the Manager of Document Management,
Part 2 — Exemptions for services to Internet data center NYS Tax Department, W A Harriman Campus, Albany NY 12227;
property telephone (518) 457-5181.
Certain services rendered directly to or in relation to Internet data
center property are exempt from tax. If any of these services relate to
property that is both taxable and exempt from tax, an allocation may be Need help?
used to determine the portion of the total receipt that is exempt from
tax. An allocation based on square footage is acceptable to the Tax Internet access: www.tax.ny.gov
Department. However, an alternative allocation method may be chosen (for information, forms, and publications)
by the purchaser of the services, provided the method is reasonable.
Allocations that are based on time or property values are examples of Sales Tax Information Center: (518) 485-2889
reasonable allocation methods.
To order forms and publications: (518) 457-5431
The services shown on lines A, B, and C may be purchased exempt
only up to the percentage indicated on this certificate by the purchaser. Text Telephone (TTY) Hotline
When this certificate is used as a blanket certificate, the percentage(s) (for persons with hearing and
used should be reviewed periodically. If any percentage changes, a speech disabilities using a TTY): (518) 485-5082
new blanket certificate must be issued. The new certificate will cover
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