Sales Tax Exemption
Section 122 of the Federal Credit Union Act exempts federal credit unions from sales tax. Section 479 of the New York State Banking Law does not exempt state-chartered credit unions from NYS sales tax. Thus, the information contained in this information sheet does not apply to state-chartered credit unions.
Section 1116(a)(2) of the NYS Tax Law provides exemptions from sales and use taxes to the federal government and its instrumentalities. Pursuant to IRS Code Section 501(c)(1), federal credit unions are instrumentalities of the federal government and thus, are not required to pay NYS sales and use taxes.
To apply for a sales tax exempt number, send the following to the NYS Department of Taxation and Finance:
- A completed Application for an Exempt Organization Certificate (ST-119.2). Click here for the form and instructions or you may call the NYS Department of Taxation and Finance at 1-800-462-8100.
- A copy of your credit union charter from NCUA.
NOTE: If, in completing the application form, you answer "yes" to any of the questions numbered 3-7, you will be required to attach an explanation of your activities. Credit unions would most likely need to attach an explanation in connection with question #5, regarding lobbying functions. If your credit union has ever advocated or opposed pending or proposed legislation, such as by participating in a credit union "grass-roots" activity or by writing to a legislator in support or opposition of a bill, you will need to attach an explanation of your actions. As stated in the instructions, answering "yes" does not necessarily disqualify your credit union from obtaining a tax-exempt certificate.
Upon receipt and acceptance of your application, the NYS Department of Taxation and Finance will assign your credit union a six-digit sales tax exempt number.