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ENGROSSED SENATE
BILL NO. 1301 By: Rader of the Senate
and
Pfeiffer of the House
An Act relating to sales tax; amending 68 O.S. 2021,
Sections 227 and 1364.1 , which relate to refund of
erroneous payments and permit to directly remit
taxes; prohibiting refund of certain erroneous tax
payment; requiring certain individual s to apply for
direct pay permit; authorizing claim for refund of
taxes paid under certain circumstance; conforming
language; updating statutory language; and providing
an effective date.
BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
SECTION 1. AMENDATORY 68 O.S. 2021, Section 227, is
amended to read as follows:
Section 227. A. Except as provided in subsection B of Section
1361.2 and subsection D of Section 1364.1 of this title, any
taxpayer who has paid to the State of Oklahoma this state, through
error of fact, or computation, or misinterpretati on of law, any tax
collected by the Oklahoma Tax Commission may, as hereinafter
provided, be refunded the amount of such the tax so erroneously
paid, without interest.
B. 1. Except as otherwise provided by paragraph 2 of this
subsection, any taxpayer who has so paid any such tax may, within
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three (3) years from the date of payment thereof file with the Tax
Commission a verified claim for refund of such the tax so
erroneously paid. The Tax Commission may accept an amended
withholding tax or other report or return as a verified claim for
refund if the amended report or return establishes a liability less
than the original report or return previously filed.
2. Upon August 26, 2016, with respect to the sales tax imposed
by Section 1354 of this title and with respect to the use tax
imposed by Section 1402 of this title, any taxp ayer who has so paid
such the sales or use tax may, within two (2) years from the date of
payment thereof file with the Tax Commission a verified claim for
refund of such the tax so erroneously paid. The Tax Commission may
accept an amended sales or use tax repor t or return as a verified
claim for refund if the amended report or return establishes a
liability less than the original report or return previously filed.
C. The claim so filed with the Tax Commission, except for an
amended report or return, shall speci fy the name of the taxpayer,
the time when and period for which the tax was paid, the nature and
kind of tax so paid, the amount of the tax which the taxpayer
claimed was erroneously paid, the grounds upon which a refund is
sought, and such other informati on or data relative to such payment
as may be necessary to an adjustment thereof by the Tax Commission.
It shall be the duty of the Commission to determine what amount of
refund, if any, is due as soon as practicable after such claim has
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been filed and advise the taxpayer about the correctness of his
claim and the claim for refund shall be approved or denied by
written notice to the taxpayer.
D. If the claim for refund is denied, the taxpa yer may file a
demand for hearing with the Commission. The demand for hearing must
be filed on or before the sixtieth day after the date the notice of
denial was mailed. If the taxpayer fails to file a demand for
hearing, the claim for refund shall be ba rred.
E. Upon the taxpayer's timely filing of a demand for hearing ,
the Commission shall set a date for hearing upon the claim for
refund which date shall not be later than sixty (60) days from the
date the demand for hearing was mailed. The taxpayer sha ll be
notified of the time and place of the hearing. The hearing m ay be
held after the sixty-day period provided by this subsection upon
agreement of the taxpayer.
F. The provisions of this section shall not apply:
1. To refunds of income tax erroneousl y paid, refunds of which
tax shall be payable out of the income tax adjustment fund as
provided by law;
2. To estate tax because the payment of such tax is covered by
an order of the Tax Commission and the estate and interested parties
are given notice that the Commission's position and computation of
the tax will become f inal unless they protest and resist the payment
thereof as provided by statute; nor
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3. In any case where the tax was paid after an assessment
thereof was made by the Tax Commission which assessment became final
under the law.
SECTION 2. AMENDATORY 68 O.S. 2021, Section 1364.1, is
amended to read as follows:
Section 1364.1. A. Every person who qualifies pursuant to
subsection B of this section and desires to shall apply to the Tax
Commission for a direct pay permit and directly remit the taxes due
under Section 1350 et seq. of this title or Section 1401 et seq. of
this title to the Oklahoma Tax Com mission rather than remit such
taxes to the vendor may apply to the Tax Commission for a direct
payment permit. The permit shall be va lid for three (3) years.
Each such person shall file with the Tax Commission an application
for a direct payment permit, setting forth such information as the
Tax Commission may require , including but not limited to:
1. An agreement that is signed by the owner of the business or
representative of the business entity and as a natural person, and,
in the case of a corporatio n, as a legally constituted officer
thereof, that provides that th e applicant agrees to:
a. accrue and remit all taxes imposed by Secti on 1350 et
seq. of this title or Section 1401 et seq. of this
title on the sale or use of all taxable personal
property or services sold to or leased or rented by
the applicant. Provided , no tax shall be due from the
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holder of a direct payment permit on t angible personal
property intended solely for use in other states, but
which is stored in Oklahoma pending shipment to su ch
other states or which is temporarily retained in
Oklahoma for the purpose of fabrication, repair,
testing, alteration, maintenance, or other service,
b. pay such taxes as required by Section 1365 of this
title. Provided, in lieu of monthly reports, per sons
qualifying pursuant to paragraph 2 of subsection B of
this section owing an average per month of Five
Hundred Dollars ($500.00) or less may file quarterly
reports and remit taxes due thereunder to the Tax
Commission on or before the twentieth day of t he month
following the calendar quarter. If not paid on or
before the twentieth day of such month, the tax shall
be delinquent, and
c. waive the discount permitted by Section 1367.1 of this
title on the payment of all taxes remitted directly to
the Tax Commission; and
2. A description of the accounting method by which the
applicant proposes to differentiate between taxable and exempt
transactions.
Upon verification that the applicant is eligible to receive a
direct payment permit, the Tax Commission shall iss ue a direct
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payment permit for the place of business set forth in the
application for the permit. The Tax Commission shall be the sole
judge of the applicant's qualifications and may refuse to issue a
direct payment permit to an applicant. An applicant w ho has been
denied the issuance of a permit may submit an amen ded application or
may submit a new application after a reasonable pe riod of time after
the denial of the original application.
B. The following persons shall qualify for a direct payment
permit as provided in subsection A of this section:
1. Every person who makes purchases of Eight Hundred Thousand
Dollars ($800,000.00) or more annually in taxable items for use in
Oklahoma enterprises; or
2. Every person who makes purchases of drugs for the treatment
of human beings, medical appliances, medical devices and other
medical equipment including but not limited to corrective
eyeglasses, contact lenses, hearing aids, prosthetic devices,
durable medical equipment, and mobility -enhancing equipment for
administration or distribution by a practitioner, as defined in
subsection B of Section 1357.6 of this title, who is authorized by
law to administer or distribute such items and the cost of such
items will be reimbursed under the Medicare or Medicaid prog ram.
C. For exempt purchases made by persons that have been i ssued a
permit under paragraph 2 of subsection B of this section, the Tax
Commission shall accept the following information, maintained
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separate from confidential patient records, as an acceptab le
accounting method by which the applicant documents the purc hase of
items exempt under Section 1357.6 of this title:
1. Patient case number or account number;
2. Type of insurance; and
3. Item description or product number.
D. A claim for refund of sales taxes erroneously paid may only
be made to the Tax Commission if a vendor refuses to honor the proof
of eligibility issued by the Commission for the exemption authorized
pursuant to subsection B of this section, and the person eligible
for the exemption submits to the Commission a signed notification of
the vendor's denial of exemption on a form prescribed by the
Commission.
SECTION 3. This act shall become effective November 1, 2022.
Passed the Senate the 22nd day of February, 2022.
Presiding Officer of the Senate
Passed the House of Representatives the ____ day of __________,
2022.
Presiding Officer of the House
of Representatives