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STATE OF OKLAHOMA
2nd Session of the 58th Legislature (2022)
COMMITTEE SUBSTITUTE
FOR
HOUSE BILL NO. 3637 By: Dempsey
COMMITTEE SUBSTITUTE
[ revenue and taxation - sales tax exemptions for
agriculture - effective date ]
BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
SECTION 1. AMENDATORY 68 O.S. 2021, Sect ion 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 suc h articles
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 produced;
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 exc ept
as set out herein;
2. Livestock, including cat tle, horses, mules or other domestic
or draft animals, sold by the producer by private 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, provid ed
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, ta nkage, oyster shells, mineral
supplements, limeston e and other generally recognized animal feeds
for the following purposes and subject t o 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, m ilk or meat for human
consumption,
b. feed purchased in Oklahoma for the purpose of be ing
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 other such agricultural
supplies.
"Poultry" shall not be construed to include any fowl other than
domestic fowl kept and rais ed 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 o n 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 busine ss of
farming or ranching,
b. sales of agricultural fertilizer to any person engaged
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 farming or ranching. In addition to
providing the vendor proof of eligibility as prov ided
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, pharmac euticals 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 within th e 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 productivity of plants or
animals,
d. sales of agricultural seed or plants to any person
regularly engaged, for profit, in the busi ness of
farming or ranching. This section shall no t be
construed as exempting from sales tax, seed which is
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packaged and sold for use 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 ranching. 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 mix ture 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 agricult ural products;
6. Sale of farm machinery, repair p arts thereto or fuel, oil,
lubricants and other substances used for operation and main tenance
of the farm machinery to be used directly on a farm or ranch in the
production, cultivation, planting, sowing, harvesting, processing,
spraying, preservation or i rrigation 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, lubri cants and other
substances used by persons engaged in the business of custom
production, cultivation, planting, sowing, harvesting, proce ssing,
spraying, preservation, or irrigation of any livestock, poultry,
agricultural, or dairy products for farmers or ranchers. The
exemption provided for herein shall not apply to motor vehicles;
7. Sales of supplies, machinery and equipment to persons
regularly engaged in the business of raising evergreen trees for
retail sale in which such trees are cut down on the p remises by the
consumer purchasing such tree. This exemption shall only be granted
and extended when the items in fact are used in the r aising 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 producti on 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 c opy 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 such
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 o f an amount equal
to double the amount of sales tax involved or imprisonment in the
county jail for not more than sixty (60) days or by both such fine
and imprisonment.
B. As used in this section and Sect ion 1358.1 of this title:
1. "Agricultural product s" shall include horses and timber; and
2. "Farming" or "farm" shall include the production of timber,
seedling production, and forestry management;
3. "Livestock" shall include the breeding of game animals which
are animals bred to be hunted for sport o r food; and
4. "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 effective November 1, 2022.
58-2-10944 AQH 03/02/22