Managing Exempt Status

1. What type of exempt programs are there?
2. How do I obtain tax exempt status?
3. Understanding how to use the different types of Exemption certificates
4. Download an Exemption Certificate
5. Qualification criteria
6. Requesting a duplicate E-permit
7. General Exemption Certificate questions

Types of Exempt Programs

1. Nonprofit Organizations - described below
2. Farmer Tax Exemption
3. Commercial Fisherman
4. Low and Moderate Income Housing Facilities

Nonprofit Organizations: Obtaining Exempt Status

1. Your organization must first apply to the Internal Revenue Service (IRS) to be granted exemption from federal income tax under section 501(a) of the Internal Revenue Code a determination letter from the United States Treasury Department that confirms it qualifies as an organization described in section 501(c)(3) or (13) of the Internal Revenue Code.   You may contact the IRS Tax Exempt and Government Entities Division for further information at 877-829-5500.
2. Once you receive the determination letter a copy of the letter must be submitted with your Registration application to claim exemption from Connecticut sales and use taxes.
3. As of July 1, 1995, the Department no longer issues exemption permits.  We will however, honor an exemption permit that was issued prior to July 1, 1995.
4. If an exempt organization was not issued a Connecticut exemption permit prior to July 1, 1995, it will be exempt from Connecticut sales and use taxes only if it has been issued a federal determination letter or group ruling letter by the IRS stating that it is exempt from federal income tax under section 501(a) of the Internal Revenue Code and has been deemed, by the IRS, to be an organization described in section 501(c)(3) or (13) of the Internal Revenue Code

Using the exemption certificates

• CERT-119 - Used when purchasing goods and services exempt from tax - (if you will use the same vendor for the same services throughout the year, use CERT-123 instead.)
  • The purchases made by the organization must exclusively be for the purposes for which the organization was established and organization funds must be used to pay for the purchase(s).
  • Officers, employees or members of the organization may not make purchases for their personal use using this form.
  • CERT-119 must be completed and presented to retailer at time of sale.
  • You MUST attach copy of exemption federal determination letter - (or exemption permit issued by Department of Revenue Services prior to July 1995) to the form.
  • DO NOT SEND CERT-119 to DRS
• CERT-112 - Used when purchasing meals and/or lodging if qualifications are met.
  • CERT-112 requires pre-approval and should be submitted to DRS two to three weeks prior to the date of the event
  • Attach copy of event flyer when submitting certificate.
  • You will be notified if approved or denied.  If approved you must present the original form to the vendor of meals/lodging
  • Keep a copy of the form for your records 

• CERT-123 - This certificate is used by exempt organizations or qualifying governmental agencies to purchase exempt meals and/or lodging from the same retailer, for a period of one year.

• CERT-123 requires pre-approval by DRS.  This certificate may be used if all four requirements are met:
  • The retailer must directly invoice and charge the exempt organization or qualifying governmental agency for the meals and/or lodging.
  • The invoice must be paid by a check drawn on the account of the exempt organization or qualifying governmental agency or by a credit card issued in the name of the exempt organization or qualifying governmental agency.
  • The exempt organization or qualifying governmental agency is not reimbursed, in whole or part,  by those consuming the meals or lodging.
  • The purchase of the meals and/or lodging occurs prior to the expiration date on the blanket certificate (one year from the date of approval).

• CERT-122 - This certificate is used by exempt organizations or qualifying governmental agencies to request a refund of Connecticut sales and use taxes paid on the qualifying purchase of meals or lodging by the exempt organization or qualifying governmental agency using their own funds.

• This certificate may be used if all three requirements are met:

• The retailer must directly invoice and charge the exempt organization or qualifying governmental agency for the meals and/or lodging.
• The invoice must be paid by a check drawn on the account of the exempt organization or qualifying governmental agency.
• The exempt organization or qualifying governmental agency must not be reimbursed, in whole or in part, by those consuming the meals and/or lodging.

Submit the completed CERT-122 to the Department of Revenue Services for review and, if approved, for issuing a refund.

Qualification Requirements

1. The retailer directly invoices and charges the qualifying organization for the meals or lodging.
2. The qualifying organization directly pays the retailer with a check drawn on its own account or with a credit card issued in its own name.
3. The qualifying organization is not reimbursed, in whole or in part, by the donation or otherwise, for its payment of the meals or lodging by those consuming the meals or lodging.

Requesting a duplicate E-permit

• If the organization changes its name or address, it is required to notify the Department of Revenue Services in writing, on organization letterhead, to request an updated duplicate permit.  Your request for a name change should include the Articles of Incorporation, if incorporated, or a copy of the by-laws, if not incorporated.  Your request for a change of address must list the physical location of the organization.  In both instances you must return the incorrect permit to the Department.
• If the organization has misplaced its exemption permit, it should submit a written request for a duplicate permit tot he Department on organization letterhead.

General Exemption questions answered

What Should An Organization Do If It Paid Tax On The Purchase Of Meals Or Lodging But It Believes That The Purchase Qualified For Exemption From Sales And Use Taxes?

The organization must complete CERT-122, and submit it, along with required documentation, to the Department of Revenue Services, 450 Columbus Blvd., Hartford, CT 06103 for processing of the refund.

If the purchase qualifies for exemption from the sales and use taxes, a refund will be issued within 6 weeks.  The refund process will be expedited if the organization includes all the necessary documentation.

Do Connecticut State Agencies And Agencies Of Connecticut Municipalities Qualify For Exemption From Connecticut Sales And Use Taxes?

Yes. Connecticut State Agencies making exempt purchases of meals and lodging must complete CERT-112 or CERT-123. When making purchases of goods and services other than meals or lodging, the organization must use a Governmental Agency Exemption Certificate.

Are Agencies Of Other States Or Of Municipalities Located In Other States Exempt From Connecticut Sales And Use Taxes?

No. There is no reciprocal agreement among the states in honoring the exempt status of agencies of other states.

Can an Out-Of-State Organization Use The Exemption Permit  Issued By Their State To Make Purchases of Goods and Services Exempt From The Connecticut Sales And Use Taxes?

No. There is no reciprocal agreement among the states in honoring exemption permits.  However, an organization that was issued an exemption permit by the Connecticut Department of Revenue Services prior to July 1, 1995, or has been issued a federal determination letter or group ruling letter by the IRS stating that it is exempt from federal income tax under section 501(a) of the Internal Revenue Code and has been determined by the IRS, to be an organization described in section 501(c)(3) or (13) of the Internal Revenue Code, may make purchases exempt from Connecticut sales and use taxes by following the procedures described under Qualification Requirements.

Can Schools, Colleges And Universities Purchase Goods And Services Exempt From The Connecticut Sales And Use Taxes?

A private school, college and university that was issued an exemption permit by the Connecticut Department of Revenue Services prior to July 1, 1995 or that has been issued a federal determination letter or group ruling letter by the IRS stating that it is exempt from federal income tax under section 501(a) of the Internal Revenue as an organization described in section 501(c)(3) or (13) of the Internal Revenue Code, may make purchases exempt from Connecticut sales and use taxes by following the procedures described under Qualification Requirements.

Connecticut public schools and universities are exempt from Connecticut sales and use taxes under Conn. Gen. Stat. §12-412(1).  When making purchases of goods and services these institutions must use use a CERT-134, Sales and Use Tax Exemption for Purchases by Qualifying Governmental Agencies, CERT-112, Certificate for Exempt Qualifying Purchase of Meals and Lodging By an Exempt Organization or Qualifying Governmental Agency, or CERT-122, Blanket Certificate for Exempt Qualifying Purchases of Meals or Lodging By an Exempt Organization or Qualifying Governmental Agency.

Can Out-Of-State Schools, Colleges And Universities Make Purchases Of Goods And Services Exempt From The Connecticut Sales And Use Taxes?

Out of-state public schools and universities are not exempt from the Connecticut sales and use taxes.

However, an out- of- state private school, college or university that was granted an exemption permit by the Connecticut Department of Revenue Services prior to July 1, 1995 or has been issued a federal determination letter or group ruling letter by the IRS stating that it is exempt from federal income tax under section 501(a) of the Internal Revenue as an organization described in section 501(c)(3) or (13) of the Internal Revenue Code, may make purchases exempt from Connecticut sales and use taxes by following the procedures described under Qualification Requirements.