Form ST-65: IDA Report of Recaptured Sales and Use Tax Benefits Explained

Form ST-65 is a New York State Department of Taxation and Finance document used by Industrial Development Agencies (IDAs) and their agents or project operators to report sales and use tax benefits that have been recaptured. When a project operator receives sales tax exemptions tied to an IDA project but later fails to meet the terms of that agreement — or disposes of exempt property in a way that violates the agreement’s conditions — the state requires that those tax benefits be paid back. Form ST-65 is the mechanism for documenting and reporting that recapture.

This form is officially titled “Report of Recaptured Sales and Use Tax Benefits” and carries the revision date 1/18. It’s a fillable PDF, meaning you can complete it digitally on your computer before printing or submitting it, rather than filling it out by hand.

Who Needs to File Form ST-65

This form applies specifically to businesses and organizations operating under an IDA agreement in New York State. If your company received sales and use tax exemptions on purchases related to an IDA-sponsored project — construction materials, equipment, or other qualifying items — and something changed that makes those exemptions no longer valid, you’re responsible for reporting and recapturing that benefit.

Common triggers for recapture include selling or transferring exempt property before the agreement’s required holding period ends, using the property for a purpose that no longer qualifies for the exemption, or failing to meet job creation or investment commitments outlined in the IDA agreement. In these situations, the operator or agent must calculate the value of the tax benefit that needs to be returned and report it using this form.

It’s worth noting that Form ST-65 works alongside other IDA-related compliance documents. For instance, agents and operators are also required to file Form ST-62, the IDA Annual Compliance Report, which covers broader annual reporting obligations related to state sales tax recapture. While ST-62 is a yearly compliance check-in, ST-65 is specifically triggered when an actual recapture event occurs.

When Is This Form Used

Form ST-65 isn’t filed on a fixed annual schedule the way many tax forms are. Instead, it’s submitted when a recapture event happens — meaning the timing depends entirely on when the disqualifying action or change in circumstances takes place. If your organization determines that previously exempt purchases no longer qualify for the IDA benefit, you’ll need to complete this report promptly to stay in compliance with New York State tax law.

Because recapture calculations can involve reviewing purchase records, exemption certificates, and the specific terms of your IDA agreement, it’s a good idea to keep thorough documentation throughout the life of the project. This makes completing Form ST-65 much more straightforward if a recapture situation arises.

How to Get and Complete Form ST-65

The form is available directly from the New York State Department of Taxation and Finance as a fillable PDF. Since it includes AcroForm fields, you can type your information directly into the document using standard PDF software, which helps reduce errors compared to handwriting.

When filling it out, you’ll need details about the IDA project, the identity of the agent or operator, the specific property or purchases involved, and the calculated amount of tax benefit being recaptured. If your organization also handles exempt purchases under IDA projects on an ongoing basis, it may help to review related documentation like Form ST-123, the IDA Agent or Project Operator Exempt Purchase Certificate, since understanding how exemptions were originally claimed makes it easier to identify what needs to be recaptured later.

Once completed, the form should be submitted according to the instructions provided by the Department of Taxation and Finance, typically alongside any required payment for the recaptured tax amount. Keeping a copy for your organization’s records is recommended, especially given the compliance history that IDAs are expected to maintain over the life of a project.