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Sales Tax Refund
 
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SALES TAX REFUND

SALES TAX REFUND

Purchases of building materials used in connection with industrial or commercial property (other than property used or to be used exclusively by one or more registered vendors primarily engaged in the retail sale of tangible personal property) located in an EZ are exempt from state sales tax through a refund or credit process. This exemption does not apply if the property is to be used exclusively by one or more retail vendors.

Example 6:
A contractor is repairing and enlarging a building in a designated EZ in Amsterdam, New York. When completed, a company that manufactures dresses will occupy the building’s three upper floors. The first floor will house a retail outlet for the dresses.

The contractor's purchases include lumber, bricks, cement, lighting fixtures, electric drills, saws, ladders and a new heating system to be installed in the building. Some of the lumber will be used for scaffolding. Sales tax must be paid on these items at the time of purchase.

However, since the building is not being used exclusively for retail establishments, the contractor can get a refund or credit for the state sales tax paid on his purchase of bricks, cement, lighting fixtures, the new heating system, and that portion of the lumber that becomes an actual part of the building (i.e., not the scaffolding). No refund is allowed for the tools and ladders.

The refund or credit provision does not apply to taxes imposed by cities, counties or school districts, unless those jurisdictions elect otherwise.

This provision for a refund or credit does not apply to the sales tax imposed for the benefit of the Municipal Assistance Corporation for the City of New York, or to the sales tax imposed for the Metropolitan Commuter Transportation District.  If, in Example 6 above, the building were located in an EZ in New York City, the contractor could get a refund of the 4% state sales tax, but not the 4% imposed for the Municipal Assistance Corporation or the 1/4% imposed for the Metropolitan Commuter Transportation District.