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The Cert 125 form is a crucial document for nonresidents looking to purchase a motor vehicle in Connecticut without incurring sales and use taxes. Designed specifically for individuals or entities that do not maintain a permanent dwelling in the state, this form serves to ensure that eligible purchasers can take advantage of tax exemptions when acquiring a vehicle from a licensed dealer. Validity hinges on accurate completion, as any misrepresentation could lead to significant tax liabilities, penalties, or interest charges. To utilize this exemption, nonresidents must ensure that their vehicle will not be registered in Connecticut, save for obtaining an in-transit plate. Both the purchaser and the retailer must adhere to specific guidelines detailed within the form, including maintaining proper records for compliance. With clear sections outlining both instructions and required declarations, the Cert 125 enables a streamlined process for eligible buyers while protecting the interests of the state against tax evasion. Understanding the nuances of this form is vital for any nonresident wishing to make a purchase in Connecticut, and full compliance ensures a smooth transaction free of unforeseen tax implications.
Cert 125 Example
Department of Revenue Services
State of Connecticut
25 Sigourney Street
Hartford CT
(Rev. 07/06)
Sales and Use Tax Exemption for a Motor Vehicle
Purchased by a Nonresident of Connecticut
Part I Instructions
Conn. Gen. Stat.
•When the purchaser of the motor vehicle is not a resident of this state and does not maintain a permanent place of abode in this state; and
•The motor vehicle is not presented, or is not required to be presented, for registration with the Department of Motor Vehicles (DMV) in this state.
General Purpose: A nonresident purchaser should use this certificate in connection with the purchase of a motor vehicle exempt from sales and use taxes from a licensed Connecticut motor vehicle dealer (retailer) when the vehicle will not be presented, or is not required to be presented, for any form of registration in Connecticut except to obtain an
This certificate is not valid unless it is wholly and correctly completed and acknowledged. Any misrepresentation will result in the imposition of use tax liability and statutory interest and penalties on the purchaser or sales tax liability and statutory interest and penalties on the retailer. The information in this certificate will be furnished to other states and is subject to verification by the State of Connecticut. If the purchaser is a corporation, an officer or authorized representative must sign the Purchaser’s Declaration.
Instructions for the Purchaser: Use this certificate only if you do not maintain a permanent place of abode in Connecticut and will not present, or are not required to present, the motor vehicle for any form of registration in Connecticut except to obtain an
Do not use this form if you maintain a permanent place of abode in Connecticut. A permanent place of abode is a dwelling place permanently maintained by an individual, whether or not owned by, rented, or leased to the individual and generally includes a dwelling place owned by or leased to his or her spouse. Generally, a barracks, motel room, or any construction that does not contain facilities ordinarily found in a dwelling, such as facilities for cooking, bathing, etc., are not deemed a permanent place of abode. Also, a place of abode is not deemed permanent if it is maintained only during a temporary stay for the accomplishment of a particular purpose.
Acorporation, partnership, limited liability company, or other business entity may qualify for this exemption only if:
•The entity maintains no Connecticut situs and owns no fixed assets located in this state;
•No partner, officer, or member of the entity or its affiliates, and no operator or user of the motor vehicle with an ownership interest in the entity or its affiliates, is a resident of Connecticut or is a nonresident that maintains a permanent place of abode in Connecticut; and
•The motor vehicle is not presented, or is not required to be presented, for registration with DMV.
Instructions for the Retailer: You must keep a copy of the certificate and a bill or invoice for at least six years from the date the item is purchased. The certificate is valid only if taken in good faith from a person who does not maintain a permanent place of abode in this state or a business entity that meets the requirements stated above and will not present, or is not required to present, this motor vehicle for any form of registration in Connecticut except to obtain an
For More Information: See Informational Publication 2004(27), Q & A on Purchases of Motor Vehicles by Nonresidents. Call Taxpayer Services at
Part II Retailer and Purchaser - Read instructions first, then complete Parts II, III, IV, and V.
Retailer Information
Name of retailer _____________________________________________________________________ |
CT Tax Registration No. _____________________ |
Street address _______________________________________________________________________ |
Date of sale ________________________________ |
City or town, State, ZIP Code __________________________________________________________ |
Telephone No. _____________________________ |
Purchaser Information
Name of Purchaser ________________________________________________ |
Daytime Telephone No. _________________________________________ |
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If an individual: |
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If corporation, partnership, limited liability company, or other business entity: |
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Home address |
___________________________________________________ |
Business address |
_______________________________________________ |
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___________________________________________________ |
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_______________________________________________ |
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Name and address ________________________________________________ |
Name and address ______________________________________________ |
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of employer |
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of partners, |
______________________________________________ |
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officers, |
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members, and |
______________________________________________ |
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________________________________________________ |
operator(s) of |
______________________________________________ |
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motor vehicle |
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Driver’s License Number |
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State |
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Expiration Date |
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Driver’s License Number |
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State |
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Expiration Date |
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(Attach copy of each
Part III Motor Vehicle Identification Data
Year _________________ Model __________________ Make of vehicle _____________________________________ Color ______________
Vehicle identification number ___________________________________ State of registration and number __________________________________
Computation of Price |
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Gross sales price* ____________________________ |
Year ________________ Make ___________________ Model __________________ |
State of registration and plate number _________________________________________ |
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Net sales price ______________________________ |
Vehicle identification number ________________________________________________ |
* Do not deduct manufacturer’s rebates from the gross sales price.
Part IV Purchaser’s Declaration
Please initial:
_______ I, the purchaser, or person authorized to sign on behalf of the purchaser named in Part II, acknowledge that the retailer has explained to me the
meaning of a permanent place of abode as defined in Part I (or the requirements for business entities as described in Part I) and I declare that I do not maintain such a permanent place of abode in Connecticut.
I, the purchaser, or person authorized to sign on behalf of the purchaser named in Part II, declare that I purchased the motor vehicle described in Part III from the retailer named in Part II. The purchaser is not a Connecticut resident and does not maintain a permanent place of abode in Connecticut, or the business entity meets the requirements described in Part I. The purchaser is a resident of (or the business entity is located in) the State of __________________ . This motor
vehicle will not be presented, or is not required to be presented, for registration with the Connecticut DMV. I declare under the penalty of false statement that I have examined this certificate and to the best of my knowledge and belief it is true, complete, and correct. I understand the penalty for wilfully delivering a false return or document to the Department of Revenue Services (DRS) is a fine of not more than $5,000, or imprisonment for not more than five years, or both.
Signature of purchaser
or authorized person ________________________________________________ Date ________________________________________________________
If corporation, partnership, limited liability company, or other business entity:
Print name of purchaser
or authorized person ________________________________________________ Title _____________________________________ Date ___________
If jointly purchased,
signature of other purchaser __________________________________________ Print name of other purchaser ___________________________________
Part V |
Retailer’s Declaration |
Please initial: |
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I, an authorized agent of the retailer named in Part II, declare that I have explained to the purchaser that owning, leasing or otherwise maintaining |
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a permanent place of abode in Connecticut, even if it is not permanently occupied by the purchaser, subjects this purchase to Connecticut sales tax |
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and prohibits the use of this certificate. If the purchaser is a business entity, I have explained the exemption requirements for business entities set forth |
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in Part I, or if pertinent, I have explained the requirement for business entities to use this certificate as described in Part I. |
I, an authorized agent of the retailer named in Part II, declare under the penalty of false statement that I have examined this certificate and to the best of my knowledge and belief it is true, complete, and correct. I understand the penalty for wilfully delivering a false return or document to DRS is a fine of not more than $5,000, or imprisonment for not more than five years, or both.
Print name of retailer’s authorized agent _________________________________________________________ Date _______________________________
Signature of retailer’s authorized agent ___________________________________________________________ Title _______________________________
File Breakdown
| Fact Name | Description |
|---|---|
| Exemption Eligibility | The CERT-125 form allows for a sales and use tax exemption on motor vehicles purchased by nonresidents of Connecticut. To qualify, the purchaser must not maintain a permanent place of abode in Connecticut. |
| Registration Requirement | The motor vehicle purchased under this exemption cannot be presented for registration with Connecticut's Department of Motor Vehicles, except for obtaining an in-transit plate. |
| Legal Authority | This form is governed by Conn. Gen. Stat. §12-412(60), which outlines the criteria for tax exemption on motor vehicle purchases for nonresidents. |
| Completion Requirement | The form must be fully and accurately completed and acknowledged. Incomplete or incorrect submissions can lead to tax liability and potential penalties for both the purchaser and the retailer. |
| Document Retention | Retailers are required to keep a copy of the CERT-125 and a related invoice for at least six years from the purchase date. This ensures compliance and facilitates any necessary verifications. |
| False Statement Penalty | There are serious consequences for providing false information on the CERT-125. Individuals may face fines up to $5,000 or imprisonment for up to five years if convicted of delivering false documents to the Department of Revenue Services. |
Guide to Using Cert 125
Completing the CERT-125 form is a vital step for nonresidents purchasing a motor vehicle in Connecticut. This process ensures that the sale is recognized as exempt from sales and use taxes in the state. Accurate information will be necessary, so it’s essential to follow these steps closely for a smooth experience.
- Begin with the retailer’s information. Fill in the Name of retailer, CT Tax Registration No., Street address, Date of sale, City or town, State, ZIP Code, and Telephone No..
- Next, complete the purchaser information. Provide the Name of Purchaser and Daytime Telephone No..
- If you are an individual, fill out your Home address. If you are a corporation or business entity, provide the Business address.
- Record the name and address of your employer, or for business entities, list the names and addresses of all partners, officers, members, and operators of the motor vehicle.
- Input the driver’s license information for each driver involved. Include the Driver’s License Number, State, and Expiration Date. Attach copies of out-of-state driver’s licenses as needed.
- Proceed to the motor vehicle identification section. Enter the Year, Model, Make of vehicle, Color, Vehicle identification number, and State of registration and number.
- Detail the computation of price. Write down the Gross sales price, Trade-in Data (including Year, Make, Model, and Trade-in allowance), and the Net sales price.
- In Part IV, locate the Purchaser’s Declaration. Initial the acknowledgement statement, confirming your understanding of what constitutes a permanent place of abode.
- Sign the declaration under the appropriate section, detailing your residence or business location. Ensure the Date is also filled in.
- If applicable, provide the information for any jointly purchased vehicle by having the other purchaser sign and print their name.
- In Part V, the retailer’s authorized agent must sign the Retailer’s Declaration, ensuring that they have explained the exemption requirements to you.
Once the form is completely filled out, carefully review each section for accuracy. It is crucial to ensure that all information is correct to avoid any complications or penalties. Keep a copy of the completed form for your records before submission.
Get Answers on Cert 125
What is the purpose of the Cert 125 form?
The Cert 125 form is used to claim an exemption from sales and use taxes for a motor vehicle purchased in Connecticut by a nonresident. If you do not live in Connecticut and will not register the vehicle in the state, you can use this form to purchase the vehicle tax-free from a licensed dealer. This exemption applies only if you meet specific criteria outlined in the form.
Who qualifies as a nonresident for the Cert 125 form?
A nonresident is someone who does not maintain a permanent place of abode in Connecticut. This means you should not have a dwelling in the state, whether owned, rented, or leased. Temporary accommodations like hotels or motels do not count as a permanent residence. For businesses, an entity can qualify only if it has no fixed assets in Connecticut and its owners are also not residents of the state.
What happens if the information provided on the Cert 125 form is incorrect?
If you provide false information or misrepresent your residency status, you may be liable for back taxes on the purchase. Additionally, this could include penalties and interest. It’s important to fill out the form accurately to avoid these financial consequences.
What are the retailer's responsibilities when using the Cert 125 form?
Retailers must complete the form in good faith. They should ensure it is filled out correctly and keep a copy along with the sales invoice for at least six years. The retailer should also verify that the purchaser does not maintain a permanent place of abode in Connecticut. If there’s any doubt, the retailer must seek clarification before accepting the form.
Common mistakes
Completing the Cert 125 form correctly is crucial for nonresidents who aim to purchase a motor vehicle in Connecticut without incurring sales and use tax. However, many individuals make mistakes that can jeopardize their exemption status. Here are ten common errors to avoid.
One common mistake occurs when individuals misinterpret their residency status. Many mistakenly believe they qualify as nonresidents even when they maintain a permanent place of abode in Connecticut. It's essential to understand that if you own, rent, or lease a dwelling in the state, you may not be eligible for the tax exemption.
Another frequent error is failing to provide complete and accurate information. Incomplete forms can lead to delays or outright rejections. Ensure that all fields, including names, addresses, and driver’s license information, are filled out without any omissions.
Mislabeling your vehicle identification data is also a significant issue. The vehicle's make, model, color, and identification number need to be entered precisely. Any discrepancy may raise questions and could result in additional tax liabilities.
Some individuals neglect to attach the required copies of their out-of-state driver’s licenses. This oversight is crucial because the retailer needs this documentation to validate your nonresident status. Failing to provide this can lead to complications with the sale.
People often forget to acknowledge the Purchaser’s Declaration portion of the form. This section must be signed and dated to affirm that the purchaser understands the definitions and implications of maintaining a permanent place of abode. An unsigned declaration renders the form invalid.
Another common oversight is misunderstanding the implications of trade-in vehicles. Individuals sometimes confuse how to report trade-in allowances. Always make sure to deduct only valid amounts and avoid deductions for manufacturer rebates, as these are not eligible.
Nonresidents sometimes mistakenly use the Cert 125 to purchase vehicles registered for use in Connecticut. This is a severe error. The form should only be used when the vehicle will not be registered in the state, except for an in-transit plate.
Filing a joint purchase can lead to confusion too. If two parties are purchasing the vehicle together, it's crucial that both individuals sign the form and provide their respective details. Failing to do this can create legal complications down the line.
Retailers also have responsibilities in this process. Many retailers do not keep a copy of the completed Cert 125 form and associated documentation for the required six years. This mistake could lead to issues during audits or disputes with the Department of Revenue Services.
Finally, another pitfall is not reading the instructions thoroughly before filling out the form. Each section is critical, and overlooking even a small detail can complicate the exemption process. Understanding the instructions in their entirety can help ensure that all requirements are met.
Staying vigilant and informed can dramatically increase the likelihood of a smooth motor vehicle purchase process and secure your exemption status under the Cert 125 form.
Documents used along the form
When dealing with the CERT-125 form, which is specifically designed for sales and use tax exemption on motor vehicle purchases by nonresidents in Connecticut, several other forms and documents often come into play. These are vital in ensuring compliance with state regulations and confirming the exemption status of the transaction. Below is a list of related forms and documents that are commonly used alongside the CERT-125.
- Form W-9: This IRS form is used to provide the correct taxpayer identification number to the entity requesting it. If a business entity is purchasing the vehicle, it may need to submit a W-9 to confirm its tax identification for record-keeping purposes.
- Bill of Sale: This document serves as proof of purchase for the vehicle. It typically includes important details such as the purchase price, date of sale, and information about both the purchaser and the retailer. It is essential for the retailer’s records and may need to be submitted alongside the CERT-125.
- Department of Motor Vehicles (DMV) Form: Depending on the transaction, the DMV may require specific forms related to vehicle registration or title transfer. This ensures that all legal requirements are met before the vehicle can be registered in another state.
- Proof of Residency: Nonresidents may need to provide documentation confirming their primary residence outside of Connecticut. This could include utility bills, tax returns, or leases from an out-of-state address to validate non-residency.
- Trade-in Documentation: If the purchaser is trading in a vehicle as part of the transaction, they need to provide documentation for the trade-in. This paperwork helps to calculate the net sales price and verify the trade-in allowance claimed.
- Sales Contract: This document outlines the specific terms of the sale between the buyer and the seller. It is crucial for determining the obligations of each party and may serve as an additional layer of proof for the sales transaction.
- Motor Vehicle Affidavit: This affidavit can be required by certain states to confirm details about the vehicle’s usage and ownership history. It may clarify that the vehicle will not be used in Connecticut, thus solidifying the non-residency claim.
- Out-of-State Driver’s License: A copy of the driver’s license from the nonresident purchaser’s home state must be provided. This helps confirm their identity and assists in fulfilling the requirements of the CERT-125 form.
- Tax Exemption Certificate (if applicable): In some situations, purchasers might also need to submit a state-specific tax exemption certificate proving their eligibility for tax exemptions beyond vehicle purchases.
- Affidavit of Non-Residency: Some nonresidents may be required to sign an affidavit verifying that they do not maintain a permanent place of abode in Connecticut. This document strengthens their claim for the tax exemption.
Each of these forms and documents plays a significant role in ensuring that nonresidents correctly comply with Connecticut’s tax laws while purchasing vehicles. By assembling the appropriate documentation, purchasers and retailers can navigate the complexities of state regulations more effectively.
Similar forms
Form ST-5: This is a Sales Tax Exemption Certificate used in Connecticut for various tax-exempt purchases, including goods needed by organizations or charities. Like the CERT-125, it certifies a tax-free transaction, but it covers a wider range of items beyond motor vehicles.
Form ST-3: Similar to the ST-5, this form is employed for sales tax exempt purchases made by certain non-profit organizations. It also serves as proof that the purchaser does not need to pay sales tax, but it does not specifically pertain to motor vehicle purchases like the CERT-125.
IRS Form W-9: While primarily associated with taxpayer identification and reporting, it validates the status of a corporation or entity for tax purposes. Both this and CERT-125 require accurate information from the purchaser to ensure compliance with tax laws.
Form 990: Nonprofit organizations use this form to report their financial information to the IRS. It’s akin to CERT-125 in that both confirm the legitimacy of exempt status for tax purposes, albeit in different contexts.
Form 8862: This form is used to claim the Earned Income Tax Credit after it had previously been denied. Like CERT-125, it requires a declaration confirming eligibility for a tax benefit, though they apply to different tax situations.
Form 1040 Schedule C: Business entities utilize this form to report income or loss from a business. Both forms require detailed disclosures and representations concerning the status of the purchaser or business entity, but for differing purposes.
Form IT-2105: This New York State Estimated Income Tax Payment form is similar in that it specifies estimates for tax liabilities. Both forms involve a declaration of non-residency status for tax benefits or exemptions.
Form 1099-MISC: Used to report various types of income other than wages, this form shares the requirement for detailed disclosures similar to the CERT-125. Both require accountability in reporting to avoid penalties.
Form SS-4: This application for Employer Identification Number also requires information about the business entity. It verifies the status and eligibility of an entity in relation to tax obligations, similar to the CERT-125.
Dos and Don'ts
When filling out the Cert 125 form, it's important to follow certain guidelines to ensure compliance and avoid potential issues. Here’s what you should and shouldn’t do:
- Do ensure that you do not maintain a permanent place of abode in Connecticut.
- Do provide accurate and complete information throughout the form.
- Do have an authorized person sign the Purchaser’s Declaration if you represent a corporation or business entity.
- Do keep a copy of the finished form and related documents for at least six years.
- Don't use this form if you have a permanent place of abode in Connecticut.
- Don't omit any required documentation, such as copies of out-of-state driver’s licenses.
Misconceptions
Here are four misconceptions about the CERT-125 form along with clarifications:
- The CERT-125 form can be used by anyone purchasing a motor vehicle. This form is specifically for nonresidents who do not maintain a permanent place of abode in Connecticut. Anyone who has a permanent residence in the state cannot use this exemption.
- All motor vehicles qualify for the exemption. The exemption applies only if the motor vehicle is not presented for registration in Connecticut, except for obtaining an in-transit plate. If the vehicle is registered in Connecticut, the exemption does not apply.
- Corporations can use the CERT-125 regardless of their business activities. Corporations must meet specific criteria to qualify for the exemption, including not maintaining any fixed assets in Connecticut and ensuring that no part of their operations involves any Connecticut residents or those who maintain a permanent abode there.
- Misinformation on the form is inconsequential. Providing incorrect information can lead to significant penalties. Misrepresentation may result in use tax liability, interest, and penalties for both the purchaser and the retailer.
Key takeaways
When considering the use of the Cert 125 form for a motor vehicle purchase in Connecticut, it's essential to understand its requirements and implications thoroughly. Below are some key takeaways that will aid in the completion and utilization of the form effectively.
- Intended Audience: The Cert 125 form is specifically designed for nonresidents of Connecticut who wish to buy a motor vehicle without paying the state's sales and use taxes.
- Eligibility Criteria: To qualify, the purchaser must not have a permanent residence in Connecticut and must not be required to register the vehicle in the state.
- Permanence Defined: A permanent place of abode is typically a dwelling maintained by an individual. Places such as barracks or motel rooms do not qualify.
- Corporate Purchasers: Businesses can use the Cert 125 form if they neither maintain a presence in Connecticut nor have residents associated with the entity in the state.
- Proper Completion: The form is valid only if completed accurately and completely. Any misinformation can lead to tax liabilities for both the purchaser and the retailer.
- Good Faith Requirement: Retailers must ensure they take the certificate in good faith, meaning they should not have knowledge of facts suggesting the purchaser is a Connecticut resident.
- Documentation Retention: Retailers must keep a copy of the Cert 125 and the sale invoice for at least six years to comply with state regulations.
- Acknowledge Responsibilities: The purchaser must acknowledge understanding the rules regarding permanent residency before signing the declaration on the form.
- Exempt Purchase Indication: Any sale made using the Cert 125 should be marked as "Exempt under CERT-125" on invoices and records to document the tax exemption.
- Verification Processes: The information provided may be subject to verification by the State of Connecticut, and any false declarations can result in significant penalties.
Understanding these key aspects of the Cert 125 form is vital for both nonresident purchasers and retailers in Connecticut to ensure compliance with state tax regulations.