Form FT-123: IDA Agent or Project Operator Exempt Purchase Certificate for Fuel

Form FT-123, issued by the New York State Department of Taxation and Finance, is the certificate that Industrial Development Agencies (IDAs), their agents, and project operators use to purchase motor fuel or diesel motor fuel without paying state and local sales tax, use tax, or the petroleum business tax. It’s a narrow-purpose document, but for the businesses and agencies involved in IDA-sponsored projects, it can mean real savings on fuel costs tied to construction, operation, or maintenance activities covered by their agreement.

IDAs in New York are public benefit corporations created to encourage economic development, job creation, and capital investment within a county or municipality. When an IDA sponsors a project, it often designates an agent or project operator to carry out purchasing on its behalf. Because IDAs themselves are generally exempt from New York sales and use tax, that exemption can extend to purchases made by their designated agents when the purchase is directly connected to an approved project. Form FT-123 is how that exemption is documented at the point of sale for fuel purchases specifically.

Who Should Use Form FT-123

This form is meant for entities formally appointed as an agent of an IDA, or for project operators acting under an IDA agreement, when they need to buy fuel that will be used exclusively for the exempt project. It is not a general-purpose exemption certificate for any business connected to an IDA — the purchaser must be able to show a direct link between the fuel purchase and the specific project the IDA has authorized. Fuel suppliers accepting this certificate are relying on the buyer’s certification that the purchase qualifies, so accuracy and proper completion matter.

When the Certificate Applies

Form FT-123 is used at the time of purchase, not after the fact. The purchaser presents the completed certificate to the fuel vendor instead of paying sales tax, use tax, and petroleum business tax on qualifying purchases of motor fuel or diesel motor fuel. It can be used for a single purchase or, in some cases, as a blanket certificate covering multiple purchases from the same vendor over time, as long as the underlying project and agent relationship remain unchanged.

What You Need to Complete the Form

The form requires identifying information for both the IDA and the agent or project operator, including the project name, the IDA’s designation, and details about the fuel being purchased. Because this is an AcroForm-enabled PDF, it can be filled in digitally on a computer before printing, which helps avoid the illegibility issues that come with handwritten certificates. Once completed and signed, the certificate should be given directly to the fuel seller rather than filed with the Tax Department.

As with other New York exemption paperwork, such as the Form ST-119.2 exempt organization certificate, both the purchaser and the seller should keep copies for their records. Vendors are expected to retain the certificate to support the tax-exempt sale in case of a future audit, and IDAs or their agents should keep documentation tying the fuel purchase back to the specific approved project.

Recordkeeping and Compliance

Misuse of an exemption certificate — using it for fuel that isn’t tied to an approved IDA project, for example — can create tax liability for the purchaser rather than the seller. Agents and project operators should be precise about which purchases qualify and keep supporting records, project agreements, and correspondence with the IDA on file. This is similar in spirit to how other New York tax filings, like the TP-584-NYC real estate transfer tax return, require supporting documentation to back up any exemption or reduced tax claim.

For anyone regularly purchasing fuel on behalf of an IDA project, having Form FT-123 ready and properly filled out avoids delays at the point of purchase and keeps the paper trail clean if the Tax Department ever asks questions about the exemption.