General Purpose: Exempt organizations, qualifying governmental agencies,
nonprofit charitable hospitals, nonprofit nursing homes, nonprofit rest homes,
and nonprofit residential care homes should use this certificate to establish
that their recurring purchases of meals or lodging are exempt from tax. (Any
reference to tax in this document includes sales and use taxes and room
occupancy tax, as applicable.) These organizations, governmental agencies,
hospitals and homes are referred to as exempt entities throughout this
certificate. CERT-123 is a blanket certificate that allows an exempt entity to
make repeat qualifying exempt purchases of meals or lodging, or both, for a
one-year period. See CERT-112, Exempt Purchases of Meals or Lodging by
Exempt Entities, for a single qualifying exempt purchase of meals or lodging.
Use this certificate only if these four conditions are met:
1. The retailer directly invoices and charges the exempt entity for the meals
or lodging; and
2. The exempt entity directly pays the retailer with a check drawn on its own
account or with a credit card issued in its own name; and
3. The exempt entity is not reimbursed, in whole or in part, by donation or
otherwise, for its payment for the meals or lodging by those consuming the
meals or lodging; and
4. The purchase of the meals or lodging occurs before the expiration date
specified on the blanket certificate.
Statutory Authority: Conn. Gen. Stat. §12-412(1)(A), (5), (8), and (94).
Credit Card Purchases: If a credit card is used to pay the retailer of meals
or lodging, the card must be issued in the name of the exempt entity. The
credit card must be used exclusively to make purchases for the use of the
exempt entity (not for the convenience of its officers, employees, or members).
The credit card charges must be paid by a check drawn on the exempt entity’s
own checking account.
Nonqualifying Purchases: This certificate may not be used (and tax must
be paid) on the purchase of meals or lodging not meeting all four of the
conditions above. Nonqualifying purchases include fund raisers where those
who attend are charged or are required to make any payment and seminars or
conferences where meals or lodging are included in the conference or seminar
registration fee, except as described below.
An exempt entity may purchase meals exempt from tax using CERT-113,
Purchases of Tangible Personal Property and Services by a Nonprofit Charitable
Hospital, Nonprofit Nursing Home, Nonprofit Rest Home, or Nonprofit
Residential Care Home, CERT-119, Certificate for Purchases of Tangible
Personal Property and Services by Qualifying Exempt Organizations, or
CERT-134, Sales and Use Tax Exemption for Purchases by Qualifying
Governmental Agencies, and does not have to get prior approval from the
Department of Revenue Services (DRS), when it will resell the meals at one of
five fund-raising or social events per year that is exempt from tax under Conn.
Gen. Stat. §12-412(94) including meals resold at conferences and seminars.
See Special Notice 98(11), Exemption From Sales and Use Taxes of Sales by
Nonprofit Organizations at Fundraising or Social Events.
Government Purchases Not Requiring Preapproval: The federal
government has implemented the “GSA SmartPay” program, which uses four
categories of credit cards: Fleet, Purchase, Travel, and Integrated cards. Federal
employees may purchase meals and lodging tax exempt by using certain GSA
SmartPay cards when the purchases are billed to and paid by the federal
government. U.S. government agencies making tax-exempt purchases of meals
and lodging using GSA SmartPay cards are not required to get preapproval for
these purchases from DRS and are not required to provide the retailer with
CERT-112. See Policy Statement 2000(1.1), Retailer’s Acceptance of U.S.
Government “GSA SmartPay” Credit Card for Exempt Purchases.
Instructions for the Purchaser: An officer of an exempt entity must
complete and sign this certificate and submit it to DRS for qualifying exempt
purchases of meals or lodging during a one-year period. If the purchaser is an
Blanket Certificate for Exempt Qualifying Purchases of
Meals or Lodging by an Exempt Entity
CERT-123
exempt organization, it must attach either a copy of its I.R.C. §501(c)(3) or
(13) determination letter issued by the U.S. Treasury Department or, if it was
issued an exemption permit by DRS, enter its exemption permit number on
CERT-123. If the purchaser is a qualifying governmental agency, no attachment
is required. If the purchaser is a nonprofit charitable hospital, nonprofit nursing
home, nonprofit rest home, or nonprofit residential care home, it must attach a
copy of a valid and active license issued by the Department of Public Health
under Chapter 368v of the Connecticut General Statutes and either a copy of its
I.R.C. §501(c)(3) or (4) determination letter issued by the U.S. Treasury
Department or, if it was issued an exemption permit by DRS, enter its exemption
permit number on CERT-123. If DRS concludes that qualifying exempt purchases
are being made, the certificate, with DRS official approval noted, will be returned
to the exempt entity. The exempt entity must then provide the approved
CERT-123 to the retailer of meals or lodging. Keep a copy of this certificate,
documents attached, and records that substantiate the information on this
certificate for at least six years from the date it is issued.
Events That Qualify for Refund Only: If the exempt entity will be paying
(and will not be reimbursed in whole or in part) for the meals or lodging of some
of the attendees, but will be reimbursed in whole or in part for the meals or
lodging of others, a preapproved exemption will not be issued. The exempt
entity must pay tax on all the meals or lodging at the time of the purchase.
However, DRS will refund the tax on those meals or lodging that were paid for
by the exempt entity for which it was not reimbursed in whole or in part. The
exempt entity must file, and DRS must approve, CERT-122, Refund of Tax
Paid on Purchases of Meals or Lodging by Exempt Entities. The exempt
entity is not eligible for refund of tax paid on those meals or lodging for which
it received full or partial reimbursement other than for meals sold under the
five one-day social or fund-raising events per calendar year exemption. See
Policy Statement 96(7), Purchases of Meals or Lodging by Exempt
Organizations or Qualifying Governmental Agencies, for more information.
Example 1: B, an exempt organization, sponsors a dinner to honor one of its
members. The restaurant charges B $50 per meal and B sells tickets for $50
per person. The honoree and members of the immediate family attend as
guests of the organization. B must pay sales tax on all meals purchased. It
may, however, complete and file CERT-122 to claim a refund of the taxes paid
only on meals consumed by the honoree and members of the immediate family.
Example 2: C, an exempt organization, sponsors a retirement dinner to honor
one of its employees. The restaurant charges C $60 per meal. C sells tickets
for $50 per person and pays the $10 difference to the restaurant from its own
funds. C must pay sales tax on the full price of all meals purchased. Because
the organization received partial reimbursement for all of the meals, C is not
eligible for a refund of any of the tax paid.
Instructions for Retailer of Meals or Lodging: Accept this certificate
only if you directly invoice and charge the exempt entity for the meals or
lodging. Accept the certificate only if you are directly paid by the exempt
entity with a check drawn on the exempt entity’s own checking account or
with a credit card issued in the exempt entity’s name (not in the name of one
of its members, employees, or officers). Cash payments will not satisfy this
condition, regardless of the cost of the meals or lodging.
Acceptance of this certificate, when properly completed and with DRS official
approval noted, relieves the retailer from the burden of proving that the sale
of meals or lodging is not subject to tax. This certificate is valid only if taken
in good faith from an exempt entity.
Keep a copy of this certificate, the attached documents, and bills or invoices to
the exempt entity, for at least six years from the date the meals or lodging were
purchased. The bills, invoices, or records covering the purchase made under
this certificate must be marked Exempt Under CERT-123 to indicate an
exempt purchase has occurred.
(Rev. 12/02)
State of Connecticut
Department of Revenue Services
Taxpayer Services Division
25 Sigourney Street
Hartford CT 06106-5032
