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STATE OF OKLAHOMA
2nd Session of the 58th Legislature (2022 )
HOUSE BILL 3637 By: Dempsey
AS INTRODUCED
An Act relating to revenue and taxation; amending 68
O.S. 2021, Section 1358 , which relates to sales tax
exemptions for agriculture; expanding definition;
defining term; and providing an effective date .
BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
SECTION 1. AMENDATORY 68 O.S. 2021, Section 1358, is
amended to read as follows:
Section 1358. Exemptions – Agriculture.
A. There are hereby specifically exempted from the tax levied
by Section 1350 et seq. of this title:
1. Sales of agricultural products produced in this state by the
producer thereof directly to the consumer or user when such arti cles
are sold at or from a farm and not from some other place of
business, as follows:
a. farm, orchard or garden products, and
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b. dairy products sold by a dairy producer or farmer who
owns all the cows from which the dairy products
offered for sale are pr oduced;
provided, the provisions of this paragraph shall not be construed as
exempting sales by florists, nursery operators or chicken
hatcheries, or sales of dairy products by any other business except
as set out herein;
2. Livestock, including cattle, h orses, mules or other domestic
or draft animals, sold by the producer by pri vate treaty or at a
special livestock sale;
3. Sale of baby chicks, turkey poults and starter pullets used
in the commercial production of chickens, turkeys and eggs, provided
that the purchaser certifies, in writing, on the copy of the invoice
or sales ticket to be retained by the vendor that the pullets will
be used primarily for egg production;
4. Sale of salt, grains, tankage, oyster shells, mineral
supplements, limestone and other generally recognized animal feeds
for the following purposes and subje ct to the following limitations:
a. feed which is fed to poultry and livestock, including
breeding stock and wool -bearing stock, for the purpose
of producing eggs, poultry, milk or meat for human
consumption,
b. feed purchased in Oklahoma for the purpose o f being
fed to and which is fed by the purchaser to horses,
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mules or other domestic or draft animals used directly
in the producing and marketing of agricultural
products, and
c. any stock tonics, water purifying products, stock
sprays, disinfectants or ot her such agricultural
supplies.
"Poultry" shall not be construed to include any fowl other than
domestic fowl kept and raised for the market or production of eggs.
“Livestock” shall not be construed to include any pet animals such
as dogs, cats, birds or such other fur-bearing animals. This
exemption shall only be granted and extended where the purchaser of
feed that is to be used and in fact is used for a purpose that would
bring about an exemption hereunder executes an invoice or sales
ticket in duplicate on a form to be prescribed by the Oklahoma Tax
Commission. The purchaser may demand and receive a copy of the
invoice or sales ticket and the vendor shall retain a copy;
5. Sales of items to be and in fact used in the production of
agricultural products. Sale of the following items shall be subject
to the following limitations:
a. sales of agricultural fertilizer to any person
regularly engaged, for profit, in the business of
farming or ranching,
b. sales of agricultural fertilizer to any person engag ed
in the business of applying such materials on a
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contract or custom basis to land owned or leased and
operated by persons regularly engaged, for profit, in
the business of farmin g or ranching. In addition to
providing the vendor proof of eligibility as provided
in Section 1358.1 of this title, the purchaser shall
provide the name or names of such owner or lessee and
operator and the location of the lands on which said
materials are to be applied to each such land,
c. sales of agricultural fertilizer, pha rmaceuticals and
biologicals to persons engaged in the business of
applying such materials on a contract or custom basis
shall not be considered to be sales to contractors
under this article, and said sales shall not be
considered to be taxable sales withi n the meaning of
the Oklahoma Sales Tax Code. As used in this section,
"agricultural fertilizer", "pharmaceuticals" and
"biologicals" mean any substance sold and used for
soil enrichment or soil corrective purposes or for
promoting the growth and producti vity of plants or
animals,
d. sales of agricultural seed or plants to any person
regularly engaged, for profit, in the business of
farming or ranching. This section shall not be
construed as exempting from sales tax, seed which is
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packaged and sold for us e in noncommercial flower and
vegetable gardens, and
e. sales of agricultural chemical pesticides to any
person regularly engaged, for profit, in the business
of farming or ranchin g. For the purposes of this
subparagraph, "agricultural chemical pesticides " shall
include any substance or mixture of substances
intended for preventing, destroying, repelling or
mitigating any insect, snail, slug, rodent, bird,
nematode, fungus, weed or any other form of
terrestrial or aquatic plant or animal life or virus,
bacteria or other microorganism, except viruses,
bacteria or other microorganisms on or in living man,
or any substance or mixture of substances intended for
use as a plant regulator, defoliant or desiccant.
The exemption provided in this paragraph shall only be granted
and extended to the purchaser where the items are to be used and in
fact are used in the production of agricultural products;
6. Sale of farm machinery, repair parts t hereto or fuel, oil,
lubricants and other substances used for operation and maintenance
of the farm machinery to be used directly on a farm or ranch in the
production, cultivation, planting, sowing, harvesting, processing,
spraying, preservation or irrigat ion of any livestock, poultry,
agricultural or dairy products produced from such lands. The
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exemption specified in this paragraph shall apply to such farm
machinery, repair parts or fuel, oil, lubricants and other
substances used by persons engaged in the business of custom
production, cultivation, planting, sowing, harvesting, p rocessing,
spraying, preservation, or irrigation of any livestock, poultry,
agricultural, or dairy products for farmers or ranchers. The
exemption provided for herein shall not ap ply to motor vehicles;
7. Sales of supplies, machinery and equipment to per sons
regularly engaged in the business of raising evergreen trees for
retail sale in which such trees are cut down on the premises by the
consumer purchasing such tree. This exemp tion shall only be granted
and extended when the items in fact are used in t he raising of such
evergreen trees; and
8. Sales of materials, supplies and equipment to an
agricultural permit holder or to any person with whom the permit
holder has contracted to construct facilities which are or which
will be used directly in the prod uction of any livestock, including,
but not limited to, facilities used in the production and storage of
feed for livestock owned by the permit holder. Any person making
purchases on behalf of the agricultural permit holder shall certify,
in writing, on the copy of the invoice or sales ticket to be
retained by the vendor that the purchases are made for and on behalf
of such permit holder and set out the name and permit number of su ch
holder. Any person who wrongfully or erroneously certifies that
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purchases are for an agricultural permit holder or who otherwise
violates this subsection shall be guilty of a misdemeanor and upon
conviction thereof shall be punishable by a fine of an a mount equal
to double the amount of sales tax involved or imprisonment in th e
county jail for not more than sixty (60) days or by both such fine
and imprisonment.
B. As used in this section and Section 1358.1 of this title:
1. "Agricultural products " shall include horses and timber; and
2. "Farming" or "farm" shall include the production of timber,
seedling production, and forestry management; and
3. "Ranching" or "ranch" shall include the business, or
facilities for the business, of raising horses.
Provided, sales of items at race meetings as defined in Section
200.1 of Title 3A of the Oklahoma Statutes shall not be exempt
pursuant to the provisions of this section and Section 1358.1 of
this title.
SECTION 2. This act shall become effec tive November 1, 2022.
58-2-9729 AQH 12/29/21