This section identifies the documentation that must be submitted to the Office of the State Comptroller's (OSC) Bureau of Contracts to satisfy Tax Law § 5-a, which was added to the Tax Law under Part N of Chapter 60 of the Laws of 2004, and amended under Part L of Chapter 62 of the Laws of 2006.

This law, as amended, imposes upon certain contractors with regard to contracts awarded pursuant to State Finance Law Article XI, the obligation to certify to DTF that the contractor, and, to the best of the contractor's knowledge, any affiliates and subcontractors, are registered to collect state sales and compensating use tax, or that the contractor and, to the best of the contractor's knowledge, any affiliates and subcontractors, did not have sales within New York State of tangible personal property or taxable services in excess of $300,000 during the immediately preceding four consecutive sales tax quarters.

The contractor must also certify in writing to the procuring agency that the requisite certification has been made to DTF, or that the certification is not required to be filed, and that the certification is correct and complete. The certification to the procuring agency must be included in the procurement record.

The law provides that before a qualifying contract may take effect, the contractor must be in compliance with the certification requirements of the law. Furthermore, for contracts already in effect, and which provide for a renewal, the contractor must certify, prior to the commencement date of the renewal term, that the contractor has filed with DTF the certification, as required by Tax Law Section 5-a, and that the certification is correct and complete.

Tax Law Section 5-a applies to all contracts in excess of $100,000 for the purchase by a covered agency of commodities or services, awarded pursuant to Article XI of the State Finance Law. For purposes of determining whether or not a contract value exceeds $100,000, such that the provisions of Tax Law section 5-a would apply, the total cumulative value of the contract, including the original contract award value, and any amendments, extensions, or renewals, as they occur, must be considered. Once the total cumulative value of a contract exceeds $100,000, the law applies regardless of the transactional value of any contract, amendment, extension, or renewal, with one unusual exception that would occur if said amendment, extension, or renewal should result in a reduction in the total contract value to an amount not exceeding $100,000.

The law applies to centralized contracts, including centralized backdrop contracts as well as agency-awarded backdrop contracts, in excess of $100,000. However, the law does not apply to purchases by a covered agency of commodities or services with a value in excess of $100,000 based upon a formal mini-bid solicitation pursuant to an Office General Services’ (OGS) centralized or agency-awarded backdrop contract. The law also does not apply to grants, intergovernmental agreements, or purchases of commodities or services from a preferred source.

The law provides that there should not be any aggregation of multiple purchases from the same contractor for purposes of determining whether the threshold of greater than $100,000 has been met.¹

¹ This is in contrast to the situation where an underlying contract is later amended, extended, or renewed, and the cumulative value of these becomes the determinative dollar amount for purposes of determining applicability of the law.

Process and Document Preparation:

Pursuant to Tax Law Section 5-a, contractors are required to complete, sign, under penalty of perjury, and file with DTF Contractor Certification Form ST-220-TD.

Agencies should direct state contractors to the DTF website where they can obtain more information on Publication 223 and ST-220-TD.

A second certification form (ST-220-CA) is required to be provided by the contractor to the procuring agency before a contract may take effect. This certification to the procuring agency, also made under penalty of perjury, states that the requisite (ST-220-TD) certification has been made to DTF and, to the best of the contractor's knowledge, that the requisite (ST-220-TD) certification is correct and complete.

In addition, for all covered contracts that were effective and binding as of April 26, 2006, and which provide for extension or renewal, the contractor must, no later than the day prior to the commencement date of the applicable renewal term, provide certification (ST-220-CA) to the contracting agency that the requisite (ST 220-TD) certification has been made to DTF.

NOTE: The certification provisions of Tax Law Section 5-a do not apply to a contract that the procuring covered agency and the State Comptroller find is necessary to address an emergency situation (an "emergency" within the meaning of State Finance Law Article XI, or to ensure the public health, safety, or welfare). In such instance, both the procuring covered agency and the State Comptroller must agree in writing to waive the certification requirements. The contracting agency should request OSC's concurrence on their exemption determination, in writing to OSC; said request shall explain the reasons supporting such determination.

Where the contractor is obligated to make certification to the procuring agency, in accordance with Tax Law Section 5-a, the procuring agency must include a copy of ST-220-CA in all contract packages submitted to OSC for approval.

Contracting agencies should visit the Department of Taxation and Finance's (DTF) website at
http://www.tax.ny.gov/

Questions regarding scope and applicability of Tax Law Section 5-a should be directed to:

Department of Taxation and Finance
Taxpayer's Contact Center
1-800-698-2931

Guide to Financial Operations

REV. 03/19/2012