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HOUSE OF REPRESENTATIVES - FLOOR VERSION
STATE OF OKLAHOMA
2nd Session of the 58th Legislature (2022 )
COMMITTEE SUBSTITUTE
FOR
HOUSE BILL NO. 3349 By: McCall
COMMITTEE SUBSTITUTE
An Act relating to revenue and taxation; amending 68
O.S. 2021, Section 1352, which relates to
definitions; defining terms; amending 68 O.S. 2021,
Section 1354, which relates to sales tax; providing
for zero rate of state sales tax on food and food
ingredients; clarifying effect of zero rate of state
sales tax on food and food ingredients; authorizing
Oklahoma Tax Commission to promulgate rules;
providing an effective date; and declaring an
emergency.
BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
SECTION 1. AMENDATORY 68 O.S. 2021, Sect ion 1352, is
amended to read as follows:
Section 1352. As used in the Oklahoma Sales Tax Code:
1. "Alcoholic beverages" shall mean beverages that are suitable
for human consumption and contain one -half of one percent (0.5%) or
more of alcohol by volume;
2. "Bundled transaction" means the retail sale of two or more
products, except real property and services to real property, where
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the products are otherwise distinct and identifiable, and the
products are sold for one nonitemized price. A "bundled
transaction" does not include the sale of any products in which the
sales price varies, or is negotiable, based on the selection by the
purchaser of the products included in the transaction. As used in
this paragraph:
a. "distinct and identifiable products " does not include:
(1) packaging such as containers, boxes, sacks, bags,
and bottles, or other materials such as wrapping,
labels, tags, and instruction guides, that
accompany the retail sale of the products and are
incidental or immaterial to the retail sale
thereof, including but not limited to, grocery
sacks, shoeboxes, dry cle aning garment bags and
express delivery envelopes and boxes,
(2) a product provided free of charge with the
required purchase of another product. A product
is provided free of charge if the sales price of
the product purchased does not vary depending on
the inclusion of the product provided free of
charge, or
(3) items included in the definition of gross
receipts or sales price, pursuant to this
section,
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b. "one nonitemized price " does not include a price that
is separately identified by product on binding sales
or other supporting sales-related documentation made
available to the customer in paper or electronic form
including, but not limited to an invoice, bill of
sale, receipt, contr act, service agreement, lease
agreement, periodic notice of rates and se rvices, rate
card, or price list,
A transaction that otherwise meets the definition of a bundled
transaction shall not be considered a bundled transaction if it is:
(1) the retail sale of tangible personal property and
a service where the tangible personal property is
essential to the use of the service, and is
provided exclusively in connection with the
service, and the true object of the transaction
is the service,
(2) the retail sale of services where one service is
provided that is essential to the use or receipt
of a second service and the first service is
provided exclusively in connection with the
second service and the true object of the
transaction is the second service,
(3) a transaction that includes taxable products and
nontaxable products and th e purchase price or
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sales price of the taxable products is de
minimis. For purposes of this subdivision, "de
minimis" means the seller's purchase price or
sales price of taxable produ cts is ten percent
(10%) or less of the total purchase price or
sales price of the bundled products. Sellers
shall use either the purchase price or the sales
price of the products to determine if the taxable
products are de minimis. Sellers may not use a
combination of the purchase price and sales price
of the products to de termine if the taxable
products are de minimis. Sellers shall use the
full term of a service contract to determine if
the taxable products are de minimis, or
(4) the retail sale of ex empt tangible personal
property and taxable tangible personal property
where:
(a) the transaction includes food and food
ingredients, drugs, durable medical
equipment, mobility enhancing equipment,
over-the-counter drugs, prosthetic devices
or medical supplies, and
(b) the seller's purchase price or sales price
of the taxable tangible personal property is
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fifty percent (50%) or less of the total
purchase price or sales price of the bundled
tangible personal property. Sellers may not
use a combination of th e purchase price and
sales price of the tangible personal
property when making the fifty percent (50%)
determination for a transaction;
2. 3. "Business" means any activity engaged in or caused to be
engaged in by any person with the object of gain, benefi t, or
advantage, either direct or indirect;
3. 4. "Candy" shall mean a preparation of sugar, honey or other
natural or artificial sweeteners in combination with chocolate,
fruits, nuts or other ingredients or flavorings in the form of bars,
drops or pieces. Candy shall not include any preparation containing
flour or requiring refrigeration;
5. "Commission" or "Tax Commission" means the Oklahoma Tax
Commission;
4. 6. "Computer" means an electronic device that accepts
information in digital or similar for m and manipulates it for a
result based on a sequence of instructions;
5. 7. "Computer software" means a set of coded instructions
designed to cause a "computer" or automatic data processing
equipment to perform a task;
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6. 8. "Consumer" or "user" means a person to whom a taxable
sale of tangible personal property is made or to whom a taxable
service is furnished. "Consumer" or "user" includes all contractors
to whom a taxable sale of materials, supplies, equipment, or other
tangible personal property is made or to whom a taxable service is
furnished to be used or consumed in the performance of any contract;
7. 9. "Contractor" means any person who performs any
improvement upon real property and who, as a necessary and
incidental part of performing such im provement, incorporates
tangible personal property belonging to or purch ased by the person
into the real property being improved;
8. 10. "Dietary supplements" shall mean any product, other than
tobacco, intended to supplement the diet that:
a. contains one or more of the following dietary
ingredients:
(1) a vitamin,
(2) a mineral,
(3) an herb or other botanical,
(4) an amino acid,
(5) a dietary substance to supplement the diet by
increasing the total dietary intake, or
(6) a concentrate, metabolite, consti tuent, extract,
or combination of any ingredient described in
divisions (1) through (5) of this subparagraph,
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b. is intended for ingestion in tablet, capsule, powder,
softgel, gelcap, or liquid form, or, if not intended
for ingestion in such form, is not r epresented as
conventional food and is not represented for use as a
sole item of a meal or of the diet, and
c. is required to be labeled as a dietary supplement,
identifiable by the label and as required pursuant to
Section 101.36 of Title 21 of the Code o f Federal
Regulations;
11. "Drug" means a compound, substance or prepar ation, and any
component of a compound, substance or preparation:
a. recognized in the official United States
Pharmacopoeia, official Homeopathic Pharmacopoeia of
the United States, or official National Formulary, and
supplement to any of them,
b. intended for use in the diagnosis, cure, mitigation,
treatment, or prevention of disease, or
c. intended to affect the structure or any function of
the body;
9. 12. "Electronic" means relating to technology having
electrical, digital, magnetic, wireless, optical, electromagnetic,
or similar capabilities;
10. 13. "Established place of business " means the location at
which any person regularly engages in, conducts, or operates a
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business in a continuous manner for any length of time, that is open
to the public during the hours customary to such business, in which
a stock of merchandise for resale is maintained, and which is not
exempted by law from attachment, execution, or other species of
forced sale barring any satisfaction of any delinquent tax liability
accrued under the Oklahoma Sales Tax Code;
11. 14. "Fair authority" means:
a. any county, municipality, school district, public
trust or any other political subdivision of this
state, or
b. any not-for-profit corporation acting pursuant to an
agency, operating or management agreement which has
been approved or authorized by the governing body of
any of the entities specified in subparagraph a of
this paragraph which conduct, operate or produc e a
fair commonly understood to be a county, district or
state fair;
12. 15. "Food and food ingredients" shall mean substances,
whether in liquid, concentrated, solid, frozen, dried or dehydrated
form, that are sold for ingestion or chewing by humans and are
consumed for their taste or nutritional value. Food and food
ingredients shall not include:
a. alcoholic beverages,
b. bottled water,
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c. candy,
d. dietary supplements,
e. marijuana, usable marijuana or marijuana -infused
products,
f. prepared food,
g. soft drinks, or
h. tobacco;
16. a. "Gross receipts", "gross proceeds" or "sales price"
means the total amount of consideration, including
cash, credit, property and services, for which
personal property or services are sold, leased or
rented, valued in mo ney, whether received in money or
otherwise, without any deduction for t he following:
(1) the seller's cost of the property sold,
(2) the cost of materials used, labor or service
cost,
(3) interest, losses, all costs of transportation to
the seller, all taxes imposed on the seller, and
any other expense of the seller,
(4) charges by the seller for any services necessary
to complete the sale, other than delivery and
installation charges,
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(5) delivery charges and installation charges, unless
separately stated on the invoice, billing or
similar document given to the purchaser, and
(6) credit for any trade-in.
b. Such term shall not include:
(1) discounts, including cash, term, or coupons that
are not reimbursed by a third party that are
allowed by a seller and taken by a purchaser on a
sale,
(2) interest, financing, and carrying ch arges from
credit extended on the sale of personal property
or services, if the amount is separately stated
on the invoice, bill of sale or similar document
given to the purchaser, and
(3) any taxes legally imposed directly on the
consumer that are separat ely stated on the
invoice, bill of sale or similar document given
to the purchaser.
c. Such term shall include consideration received by the
seller from third parties if:
(1) the seller actually receives consideration from a
party other than the purchaser and the
consideration is directly related to a price
reduction or discount on the sale,
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(2) the seller has an obligation to pass the price
reduction or discount through to the purchase r,
(3) the amount of the consideration attributable to
the sale is fixed and determinable by the seller
at the time of the sale of the item to the
purchaser, and
(4) one of the following criteria is met:
(a) the purchaser presents a coupon, certificate
or other documentation to the seller to
claim a price reduction or discount where
the coupon, certificate or documentation is
authorized, distributed or granted by a
third party with the understanding that the
third party will reimburse any seller to
whom the coupon, certificate or
documentation is presented,
(b) the purchaser identifies himself or herself
to the seller as a member of a group or
organization entitled to a price reduction
or discount; provided, a "preferred
customer" card that is available to a ny
patron does not constitute membership in
such a group, or
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(c) the price reduction or discount is
identified as a third -party price reduction
or discount on the invoice received by the
purchaser or on a coupon, certificate or
other documentation presente d by the
purchaser;
13.
17. a. "Maintaining a place of business in th is state" means
and shall be presumed to include:
(1) (a) utilizing or maintaining in this state,
directly or by subsidiary, an office,
distribution house, sales house, warehouse,
or other physical place of business, whether
owned or operated by the vendor or any other
person, other than a common carrier acting
in its capacity as such, or
(b) having agents operating in this state,
whether the place of business or agent
is within this state temporarily or
permanently or whether the person or
agent is authorized to do business
within this state, and
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(2) the presence of any person, other than a common
carrier acting in its capacity as such, that has
substantial nexus in this state and that:
(a) sells a similar line of products as the
vendor and does so under th e same or a
similar business name,
(b) uses trademarks, service marks or trade
names in this state that are the same
or substantially similar to those used
by the vendor,
(c) delivers, installs, assembles or
performs maintenance services for the
vendor,
(d) facilitates the vendor's delivery of
property to customers in the state by
allowing the vendor's customers to pick
up property sold by the vendor at an
office, distribution facility,
warehouse, storage place or similar
place of business maintained by the
person in this state, or
(e) conducts any other activities in this state
that are significantly associated with the
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vendor's ability to establish and maintain a
market in this state f or the vendor's sale.
b. The presumptions in divisions (1) and (2) of
subparagraph a of this paragraph may be rebutted by
demonstrating that the person 's activities in this
state are not significantly associated with the
vendor's ability to establish and m aintain a market in
this state for the vendor's sales.
c. Any ruling, agreement or contract, whether written or
oral, express or implied, between a person and
executive branch of this state, or any other state
agency or department, stating, agreeing or rul ing that
the person is not "maintaining a place of business in
this state" or is not required to collect sales and
use tax in this state despite the presence of a
warehouse, distribution center or fulfillment center
in this state that is owned or operated by the vendor
or an affiliated person of the vendor shall be null
and void unless it is specifically approved by a
majority vote of each house of the Oklahoma
Legislature;
14. 18. "Manufacturing" means and includes the activity of
converting or conditioni ng tangible personal property by changing
the form, composition, or qual ity of character of some existing
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material or materials, including natural resources, by procedures
commonly regarded by the average person as manufacturing,
compounding, processing or assembling, into a material or materials
with a different form or use. "Manufacturing" does not include
extractive industrial activities such as mining, quarrying, logging,
and drilling for oil, gas and water, nor oil and gas field
processes, such as nat ural pressure reduction, mechanical
separation, heating, cooling, dehydr ation and compression;
15. 19. "Manufacturing operation " means the designing,
manufacturing, compounding, processing, assembling, warehousing, or
preparing of articles for sale as tan gible personal property. A
manufacturing operation begins at the point where the materials
enter the manufacturing site and ends at the point where a finished
product leaves the manufacturing site. "Manufacturing operation "
does not include administratio n, sales, distribution,
transportation, site construction, or site maint enance. Extractive
activities and field processes shall not be deemed to be a part of a
manufacturing operation even when performed by a person otherwise
engaged in manufacturing;
16. 20. "Manufacturing site" means a location where a
manufacturing operat ion is conducted, including a location
consisting of one or more buildings or structures in an area owned,
leased, or controlled by a manufacturer;
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17. 21. "Over-the-counter drug" means a drug that contains a
label that identifies the product as a drug as required by 21
C.F.R., Section 201.66. The over-the-counter-drug label includes:
a. a "Drug Facts" panel, or
b. a statement of the "active ingredient(s) " with a list
of those ingredients contained in the compound,
substance or preparation;
18. 22. "Person" means any individual, company, partnership,
joint venture, joint agreement, association, mutual or otherwise,
limited liability company, corporation, estate, trust, business
trust, receiver or trustee appointed by any state or federal court
or otherwise, syndicate, this state, any county, city, municipality,
school district, any other political subdivision of the state, or
any group or combination acting as a unit, in the plural or singular
number;
19. 23. "Prepared food" shall mean:
a. food sold in a heated state or that is heated by the
seller,
b. two or more food ingredients mixed or combined by the
seller for sale as a single item, or
c. food sold with eating utensils provided b y the seller,
including plates, knives, forks, spoons, glasses,
cups, napkins, or straws;
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24. "Prescription" means an order, formula or recipe issued in
any form of oral, written, electronic, or other means of
transmission by a duly licensed "practitioner" as defined in Section
1357.6 of this title;
20. 25. "Prewritten computer software" means "computer
software", including prewritten upgrades, which is not designed and
developed by the author or other creator to the specifications of a
specific purchaser. The combining of two or more prewritten
computer software programs or prewritten portions thereof does not
cause the combination to be other than prewritten computer software.
Prewritten software includes software designed and developed by the
author or other creator to the specifications of a specific
purchaser when it is sold to a person other than the purchaser.
Where a person modifies or enhances computer software of which the
person is not the author or creator, the person shall be deemed to
be the author or creator only of such person's modifications or
enhancements. Prewritten software or a prewritten portion thereof
that is modified or enhanced to any degree, where such modification
or enhancement is designed and developed to the specifications of a
specific purchaser, remains prewritten software; provided, however ,
that where there is a reasonable, separately stated charge or an
invoice or other statement of the price given to the purchaser for
such modification or enhancement, such modificatio n or enhancement
shall not constitute prewritten computer software;
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21. 26. "Repairman" means any person who performs any repair
service upon tangible personal property of the consumer, whether or
not the repairman, as a necessary and incidental part of p erforming
the service, incorporates tangible personal property belonging to or
purchased by the repairman into the tangible personal property being
repaired;
22. 27. "Sale" means the transfer of either title or possession
of tangible personal property for a valuable consideration
regardless of the manner, method, instrumental ity, or device by
which the transfer is accomplished in this state, or other
transactions as provided by this paragraph, including but not
limited to:
a. the exchange, barter, lease, o r rental of tangible
personal property resulting in the transfer of the
title to or possession of the property,
b. the disposition for consumption or use in any business
or by any person of all goods, wares, merchandise, or
property which has been purchase d for resale,
manufacturing, or further processing,
c. the sale, gift, exchange, or other disposition of
admission, dues, or fees to clubs, places of
amusement, or recreational or athletic events or for
the privilege of having access to or the use of
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amusement, recreational, athletic or entertainment
facilities,
d. the furnishing or rendering of services taxable under
the Oklahoma Sales Tax Code, and
e. any use of motor fuel or diesel fuel by a supplier, as
defined in Section 500.3 of this title, upon which
sales tax has not previously been paid, for purposes
other than to propel motor vehicles over the public
highways of this state. Motor fuel or diesel fuel
purchased outside the state and used for purposes
other than to propel motor vehicles over the publ ic
highways of this state shall not constitute a sale
within the meaning of this paragraph;
23. 28. "Sale for resale" means:
a. a sale of tangible personal property to any purchaser
who is purchasing tangible personal property for the
purpose of reselling it within the geographical limits
of the United States of America or it s territories or
possessions, in the normal course of business either
in the form or condition in which it is purchased or
as an attachment to or integral part of other tangible
personal property,
b. a sale of tangible personal property to a purchaser
for the sole purpose of the renting or leasing, within
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the geographical limits of the United States of
America or its territories or possessions, of the
tangible personal property to anoth er person by the
purchaser, but not if incidental to the renting or
leasing of real estate,
c. a sale of tangible goods and products within this
state if, simultaneously with the sale, the vendor
issues an export bill of lading, or other
documentation that the point of delivery of such goods
for use and consumption is in a for eign country and
not within the territorial confines of the United
States. If the vendor is not in the business of
shipping the tangible goods and products that are
purchased from the vendor, the buyer or purchaser of
the tangible goods and products is re sponsible for
providing an export bill of lading or other
documentation to the vendor from whom the tangible
goods and products were purchased showing that the
point of delivery of suc h goods for use and
consumption is a foreign country and not within the
territorial confines of the United States, or
d. a sales of any carrier access services, right of
access services, telecommunications services to be
resold, or telecommunications used in the subsequent
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provision of, use as a component part of, or
integrated into, end-to-end telecommunications
service;
24. 29. "Soft drinks" shall mean any nonalcoholic beverages
that contain natural or artificial sweeteners. Soft drinks shall
not include beverages that contain:
a. milk or milk products,
b. soy, rice, oat, or s imilar milk substitutes, or
c. greater than fifty percent (50%) of vegetable or fruit
juice by volume;
30. "Tangible personal property " means personal property that
can be seen, weighed, measured, felt, or touched or that is in any
other manner perceptibl e to the senses. "Tangible personal
property" includes electricity, water, gas, steam and prewritten
computer software. This definition shall be applicable only for
purposes of the Oklahoma Sales Tax Code;
25. 31. "Taxpayer" means any person liable to p ay a tax imposed
by the Oklahoma Sales Tax Code;
26. 32. "Tax period" or "taxable period" means the calendar
period or the taxpayer 's fiscal period for which a taxpayer has
obtained a permit from the Tax Commission to use a fiscal period in
lieu of a calendar period;
27. 33. "Tax remitter" means any person required to collect,
report, or remit the tax imposed by the Oklahoma Sales Tax Code. A
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tax remitter who fails, for any reason , to collect, report, or remit
the tax shall be considered a taxpayer for p urposes of assessment,
collection, and enforcement of the tax imposed by the Oklahoma Sales
Tax Code;
34. "Tobacco" shall mean cigarettes, cigars, chewing or pipe
tobacco, or any other item that contains tobacco; and
28. 35. "Vendor" means:
a. any person making sales of tangible personal property
or services in this state, the gross receipts or gross
proceeds from which are taxed by the Oklahoma Sales
Tax Code,
b. any person maintaining a place of business in this
state and making sales of tangible person al property
or services, whether at the place of business or
elsewhere, to persons within this state, the gross
receipts or gross proceeds from which are taxed by the
Oklahoma Sales Tax Code,
c. any person who solicits business by employees,
independent contractors, agents, or other
representatives in this state, and thereby makes sales
to persons within this state of tangible personal
property or services, the gross receipts or gros s
proceeds from which are taxed by the Oklahoma Sales
Tax Code, or
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d. any person, pursuant to an agreement with the person
with an ownership interest in or title to tangible
personal property, who has been entrusted with the
possession of any such property and has the power to
designate who is to obtain title, to physically
transfer possession of, or otherwise make sales of the
property.
SECTION 2. AMENDATORY 68 O.S. 2021, Section 1354, is
amended to read as follows:
Section 1354. A. There Except as provided in subsection B of
this section, there is hereby levied upon all sales, not otherwise
exempted in the Oklahoma Sales Tax Code, an excise tax of four and
one-half percent (4.5%) of the gro ss receipts or gross proceeds of
each sale of the following:
1. Tangible personal property, except newspapers and
periodicals;
2. Natural or artificial gas, electricity, ice, steam, or any
other utility or public service, except water, sewage and refuse.
Provided, the rate of four and one-half percent (4.5%) shall not
apply to sales subject to the provisions of paragraph 6 8 of Section
1357 of this title;
3. Transportation for hire to persons by common carriers,
including railroads both steam and electric , motor transportation
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companies, pullman car companies, airlines, and other means of
transportation for hire, excluding:
a. transportation services provided by a tourism service
broker which are incidental to the rendition of
tourism brokerage services by such broker to a
customer regardless of whether or not such
transportation services are actually owned and
operated by the tourism service broker. For purposes
of this subsection, "tourism service broker " means any
person, firm, association or corporatio n or any
employee of such person, firm, association or
corporation which, for a fee, commission or other
valuable consideration, arranges or offers to arrange
trips, tours or other vacation or recreational travel
plans for a customer, and
b. transportation services provided by a funeral
establishment to family members and other persons for
purposes of conducting a funeral in this state;
4. Intrastate, interstate and international telecommunications
services sourced to this state in accordance with Section 1354.30 of
this title and ancillary services. Provided:
a. the term "telecommunications services" shall mean the
electronic transmission, conveyance, or routing of
voice, data, audio, video, or any other information or
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signals to a point, or between or am ong points. The
term "telecommunications services" includes such
transmission, conveyance, or routing in which computer
processing applications are used to act on the form,
code or protocol of the content for purposes of
transmission, conveyance or routin g without regard to
whether such service is referred to as voice-over
Internet protocol services or is classified by the
Federal Communications Commission as enhanced or value
added. "Telecommunications services " do not include:
(1) data processing and in formation services that
allow data to be generated, acquired, stored,
processed, or retrieved and delivered by an
electronic transmission to a purchaser where such
purchaser's primary purpose for the underlying
transaction is the processed data or informat ion,
(2) installation or maintenance of wiring or
equipment on a customer's premises,
(3) tangible personal property,
(4) advertising, including but not limited to
directory advertising,
(5) billing and collection services provided to third
parties,
(6) Internet access services,
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(7) radio and television audio and video programming
services, regardless of the medium, including the
furnishing of transmission, conveyance and
routing of such services by the programming
service provider. Radio and television au dio and
video programming services shall include, but not
be limited to, cable service as defined in 47
U.S.C. 522(6) and audio and video programming
services delivered by commercial mobile radio
service providers, as defined in 47 C.F.R. 20.3,
(8) ancillary services, or
(9) digital products delivered electronically,
including but not limited to, software, music,
video, reading materials or ring tones,
b. the term "interstate" means a "telecommunications
service" that originates in one United States state,
or a United States territory or possession, and
terminates in a different United States state or a
United States territory or possession,
c. the term "intrastate" means a telecommunications
service that originates in one United States state or
a United States territory or possession, and
terminates in the same United States state or a United
States territory or possession,
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d. the term "ancillary services" means services that are
associated with or incidental to the provision of
telecommunications services, including but not limited
to "detailed telecommunications billing", "directory
assistance", "vertical service", and "voice mail
services",
e. in the case of a bundled transaction that includes
telecommunication service, ancillary service, Internet
access or audio or video programming service:
(1) if the price is attributable to products that are
taxable and products that are nontaxable, the
portion of the price attributable to the
nontaxable products may be subject to tax unless
the provider can identify by reasonable and
verifiable standards such portion for its books
and records kept in the regular course of
business for other purposes, including, but not
limited to, nontax purposes, and
(2) the provisions of this paragraph shall apply
unless otherwise pro vided by federal law, and
f. a sale of prepaid calling service or prepaid wireless
calling service shall be taxable at the time of sale
to the customer;
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5. Telecommunications nonrecurring charges, which means an
amount billed for the installation, connect ion, change or initiation
of telecommunications services received by a customer;
6. Printing or printed matter of all types, kinds, or character
and, except for services of printing, copying or photocopying
performed by a privately owned scientific and ed ucational library
sustained by monthly or annual dues paid by members sharing the use
of such services with students interested in the study of geology,
petroleum engineering or related subjects, any service of printing
or overprinting, including the copyi ng of information by mimeograph,
multigraph, or by otherwise duplicating written or printed matter in
any manner, or the production of microfiche containing information
from magnetic tapes or other media furnished by customers;
7. Service of furnishing ro oms by hotel, apartment hotel,
public rooming house, motel, public lodging house, or tourist camp;
8. Service of furnishing storage or parking privileges by auto
hotels or parking lots;
9. Computer hardware, software, coding sheets, cards, magnetic
tapes or other media on which prewritten programs have been coded,
punched, or otherwise recorded, including the gross receipts from
the licensing of software programs;
10. Foods, confections, and all drinks sold or dispensed by
hotels, restaurants, or other d ispensers, and sold for immediate
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consumption upon the premises or delivered or carried away from the
premises for consumption elsewhere;
11. Advertising of all kinds, types, and characters, including
any and all devices used for advertising purposes exce pt those
specifically exempt pursuant to the provisions of Section 1357 of
this title;
12. Dues or fees to clubs including free or complimentary dues
or fees which have a value equivalent to the charge that would have
otherwise been made, including any fe es paid for the use of
facilities or services rendered at a health spa or club or any
similar facility or business;
13. Tickets for admission to or voluntary contributions made to
places of amusement, sports, entertainment, exhibition, display, or
other recreational events or activities, including free or
complimentary admissions which have a value equivalent to the charge
that would have otherwise been made; provided, that the state tax
generated from the sale of tickets for admission by an aquarium
exempt from taxation pursuant to the provisions of the Internal
Revenue Code, 26 U.S.C., Section 501(c)(3), or owned or operated by
a public trust or political subdivision of this state, shall be
collected and disbursed to the nonprofit organization, public tru st
or political subdivision responsible for the aquarium's operations
for use by that entity for promoting visitation primarily to out -of-
state residents;
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14. Charges made for the privilege of entering or engaging in
any kind of activity, such as tennis, racquetball, or handball, when
spectators are charged no admission fee;
15. Charges made for the privilege of using items for
amusement, sports, entertainment, or recreational activity, such as
trampolines or golf carts;
16. The rental of equipment for a musement, sports,
entertainment, or other recreational activities, such as bowling
shoes, skates, golf carts, or other sports or athletic equipment;
17. The gross receipts from sales from any vending machine
without any deduction for rental to locate the vending machine on
the premises of a person who is not the owner or any other
deductions therefrom;
18. The gross receipts or gross proceeds from the rental or
lease of tangible personal property, including rental or lease of
personal property when the re ntal or lease agreement requires the
vendor to launder, clean, repair, or otherwise service the rented or
leased property on a regular basis, without any deduction for the
cost of the service rendered. If the rental or lease charge is
based on the retail value of the property at the time of making the
rental or lease agreement and the expected life of the property, and
the rental or lease charge is separately stated from the service
cost in the statement, bill, or invoice delivered to the consumer,
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the cost of services rendered shall be deducted from the gross
receipts or gross proceeds;
19. Flowers, plants, shrubs, trees, and other floral items,
whether or not produced by the vendor, sold by persons engaged in
florist or nursery business in this state, in cluding all orders
taken by an Oklahoma business for delivery in another state. All
orders taken outside this state for delivery within this state shall
not be subject to the taxes levied in this section;
20. Tangible personal property sold to persons, p eddlers,
solicitors, or other salesmen, for resale when there is likelihood
that this state will lose tax revenue due to the difficulty of
enforcing the provisions of the Oklahoma Sales Tax Code because of:
a. the operation of the business,
b. the nature of the business,
c. the turnover of independent contractors,
d. the lack of place of business in which to display a
permit or keep records,
e. lack of adequate records,
f. the fact that the persons are minors or transients,
g. the fact that the persons are engaged in service
businesses, or
h. any other reasonable reason;
21. Any taxable services and tangible personal property
including materials, supplies, and equipment sold to contractors for
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the purpose of developing and improving real estate even though said
real estate is intended for resale as real property, hereby declared
to be sales to consumers or users, however, taxable materials,
supplies and equipment sold to contractors as provided by this
subsection which are purchased as a result of and subseq uent to the
date of a contract entered into either prior to the effective date
of any law increasing the rate of sales tax imposed by this article,
or entered into prior to the effective date of an ordinance or other
measure increasing the sales tax levy o f a political subdivision
shall be subject to the rate of sales tax applicable, as of the date
such contract was entered into, to sales of such materials, supplies
and equipment if such purchases are required in order to complete
the contract. Such rate s hall be applicable to purchases made
pursuant to the contract or any change order under the contract
until the contract or any change order has been completed, accepted
and the contractor has been discharged from any further obligation
under the contract o r change order or until two (2) years from the
date on which the contract was entered into whichever occurs first.
The increased sales tax rate shall be applicable to all such
purchases at the time of sale and the contractor shall file a claim
for refund before the expiration of three (3) years after the date
of contract completion or five (5) years after the contract was
entered into, whichever occurs earlier. However, the Oklahoma Tax
Commission shall prescribe rules and regulations and shall provide
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procedures for the refund to a contractor of sales taxes collected
on purchases eligible for the lower sales tax rate authorized by
this subsection;
22. Any taxable services and tangible personal property sold to
persons who are primarily engaged in selling their services, such as
repairmen, hereby declared to be sales to consumers or users; and
23. Canoes and paddleboats as defined in Section 4002 of Title
63 of the Oklahoma Statutes.
B. 1. For the period beginning July 1, 2022, and ending June
30, 2024, an excise tax of zero percent (0%) i s hereby imposed upon
all retail sales of food and food ingredients, sold for human
consumption off the premises where sold .
2. The levy of tax at zero percent ( 0%) prescribed by paragraph
1 of this subsection shall not supersede or otherwise affect any
local sales taxes levied on sales of food and food ingredients by
cities, counties, or other local taxing jurisdictions .
3. The Oklahoma Tax Commission shall promulgate any necessary
rules to implement the provisions of this subsection in accordance
with the Streamlined Sales and Use Tax Agreement.
C. All solicitations or advertisements in print or electronic
media by Group Three vendors, for the sale of tangible property to
be delivered within this state, shall contain a notice that the sale
is subject to Oklahoma sales tax, unless the sale is exempt from
such taxation.
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SECTION 3. This act shall become effective July 1, 2022.
SECTION 4. It being immediately necessary for the preservation
of the public peace, health or safe ty, an emergency is hereby
declared to exist, by reason whereof this act shall take effect and
be in full force from and after its passage and approval.
COMMITTEE REPORT BY: COMMITTEE ON RULES, dated 03/03/2022 - DO PASS,
As Amended.