OK
Oklahoma Senate Bill SB1484

Oklahoma 2022 Regular Session

Oklahoma Senate Bill SB1484 Compare Versions

Only one version of the bill is available at this time.
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5353 STATE OF OKLAHOMA
5454
5555 2nd Session of the 58th Legislature (2022)
5656
5757 SENATE BILL 1484 By: Murdock
5858
5959
6060
6161
6262
6363 AS INTRODUCED
6464
6565 An Act relating to sales tax exemption; amending 68
6666 O.S. 2021, Sections 1358 and 1358.1, which relate to
6767 the agricultural sales tax exe mption and permit;
6868 defining term; providing exception; requiring the
6969 Oklahoma Tax Commission to provide certain renewal
7070 form; providing eligibility for permit renew al upon
7171 submission of form; making it a felony to submit
7272 false or fraudulent information; updating statutory
7373 language; and providing an effe ctive date.
7474
7575
7676
7777
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7979 BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
8080 SECTION 1. AMENDATORY 68 O.S. 2021, Section 1358, is
8181 amended to read as follows:
8282 Section 1358. Exemptions – Agriculture.
8383 A. There are hereby specifically exempted from the tax levied
8484 by Section 1350 et seq. of this title:
8585 1. Sales of agricultural products produced in this state by the
8686 producer thereof directly to the consumer or user when such articles
8787 are sold at or from a farm and not from some other place of
8888 business, as follows:
8989 a. farm, orchard, or garden products, and
9090
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141141 b. dairy products sold by a dairy producer or farmer who
142142 owns all the cows from which the dairy products
143143 offered for sale are produce d;
144144 provided, the provisions of this paragraph shall not be construed as
145145 exempting sales by florists, nursery operators or chicken
146146 hatcheries, or sales of dairy products by any other business except
147147 as set out herein;
148148 2. Livestock, including cattle, horses , mules or other domestic
149149 or draft animals, sold by the producer by private treaty or at a
150150 special livestock sale;
151151 3. Sale of baby chicks, turkey poults and starter pullets used
152152 in the commercial production of chickens, turkeys and eggs ,;
153153 provided, that the purchaser certifies, in writing, on the copy of
154154 the invoice or sales ticket to be retained by the vendor that the
155155 pullets will be used primarily for egg production;
156156 4. Sale of salt, grains, tanka ge, oyster shells, mineral
157157 supplements, limestone , and other generally recognized animal feeds
158158 for the following purposes and subject to the following limitations:
159159 a. feed which is fed to poultry and livestock , including
160160 breeding stock and wool -bearing stock, for the purpose
161161 of producing eggs, poultry, milk or m eat for human
162162 consumption,
163163 b. feed purchased in Oklahoma this state for the purpose
164164 of being fed to and which is fed by the purchaser to
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216216 horses, mules or other domestic or draft animals used
217217 directly in the producing and marketing of
218218 agricultural products, and
219219 c. any stock tonics, water purifying products, stock
220220 sprays, disinfectants , or other such agricultural
221221 supplies.
222222 “Poultry” shall not be construed to include any fowl other than
223223 domestic fowl kept and r aised for the market or production of eggs.
224224 “Livestock” shall not be construed to include any pet animals such
225225 as dogs, cats, birds or such other fur -bearing animals. This
226226 exemption shall only be granted and extended where the purchaser of
227227 feed that is to be used and in fact is used for a purpose that w ould
228228 bring about an exemption hereunder executes an invoice or sales
229229 ticket in duplicate on a form to be prescribed by the Oklahoma Tax
230230 Commission. The purchaser may demand and receive a copy of the
231231 invoice or sales ticket and the vendor shall retain a co py;
232232 5. Sales of items to be and in fact used in the production of
233233 agricultural products. Sale of the following items shall be subject
234234 to the following limitations:
235235 a. sales of agricultural fertilizer to a ny person
236236 regularly engaged, for profit, in the bu siness of
237237 farming or ranching,
238238 b. sales of agricultural fertilizer to any person engaged
239239 in the business of applying such materials on a
240240
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291291 contract or custom basis to land owned or leased and
292292 operated by persons regularly engaged, for profit, in
293293 the business of farming or ranching. In addition to
294294 providing the vendor proof of eligibility as provided
295295 in Section 1358.1 of this title, the purchaser shall
296296 provide the name or names of such owner or lessee and
297297 operator and the location of the lands on which said
298298 the materials are to be applied to each such land,
299299 c. sales of agricultural fertilizer, pharmaceuticals and
300300 biologicals to persons engaged in the business of
301301 applying such materials on a contract or custom b asis
302302 shall not be considered to be sales to contra ctors
303303 under this article, and said the sales shall not be
304304 considered to be taxable sales within the meaning of
305305 the Oklahoma Sales Tax Code. As used in this section,
306306 “agricultural fertilizer ”, “pharmaceuticals” and
307307 “biologicals” mean any substance sold and used for
308308 soil enrichment or soil corrective purposes or for
309309 promoting the growth and productivity of plants or
310310 animals,
311311 d. sales of agricultural seed or plants to any person
312312 regularly engaged, for profit, in the business of
313313 farming or ranching. This sect ion shall not be
314314 construed as exempting from sales tax, seed which is
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366366 packaged and sold for use in noncommercial flower and
367367 vegetable gardens, and
368368 e. sales of agricultural chemical pesticides to any
369369 person regularly engaged, for profit, in the business
370370 of farming or ranching. For the purposes of this
371371 subparagraph, “agricultural chemical pesticides ” shall
372372 include any substance or mixture of substances
373373 intended for preventing, destroying, repelling or
374374 mitigating any insect, snail, slug, rodent, bird,
375375 nematode, fungus, weed or any other form of
376376 terrestrial or aquatic plant or animal life or virus,
377377 bacteria or other microorganism, except viruses,
378378 bacteria or other microorganisms on or in living man,
379379 or any substance or mixture of substances intended for
380380 use as a plant regulator, defoliant or desiccant.
381381 The exemption provided in this paragraph shall only be granted
382382 and extended to the purchaser where the items are to be used and in
383383 fact are used in the production of agricultural products;
384384 6. Sale of farm machine ry, repair parts thereto or fuel, oil,
385385 lubricants, and other substances used for operation and maintenance
386386 of the farm machinery to be used directly on a farm or ranch in the
387387 production, cultivation, planti ng, sowing, harvesting, processing,
388388 spraying, preservation or irrigation of any livestock, poultry,
389389 agricultural or dairy products produced from such lands. The
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441441 exemption specified in this paragraph shall apply to such farm
442442 machinery, repair parts or fuel , oil, lubricants, and other
443443 substances used by persons engaged in the business of custom
444444 production, cultivation, planting, sowing, harvesting, processing,
445445 spraying, preservation, or irrigation of any livestock, poultry,
446446 agricultural, or dairy products fo r farmers or ranchers. The
447447 exemption provided for herein shall not apply to motor vehicles;
448448 7. Sales of supplies, machinery , and equipment to persons
449449 regularly engaged in the business of raising evergreen trees for
450450 retail sale in which such trees are cut down on the premises by the
451451 consumer purchasing such tree. This exemption shall only be granted
452452 and extended when the items in fact are used in the raising of such
453453 evergreen trees; and
454454 8. Sales of materials, supplies , and equipment to an
455455 agricultural permit holder or to any person with whom the permit
456456 holder has contracted to construct facilities which are or which
457457 will be used directly in the production of any livestock , including,
458458 but not limited to, facilities used in the production and storage of
459459 feed for livestock owned by the permit holder. Any person making
460460 purchases on behalf of the agricultural permit holder shall certify,
461461 in writing, on the copy of the invoice or sales ticket to be
462462 retained by the vendor that the purchases are made for and on b ehalf
463463 of such permit holder and set out the name and permit number of such
464464 holder. Any person who wrongfully or erroneously certifies that
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516516 purchases are for an agricultural permit holder or who otherwise
517517 violates this subsection shall be guilty of a misde meanor and upon
518518 conviction thereof shall be punishable by a fine of an amount equal
519519 to double the amount of sales tax involved or imprisonment in the
520520 county jail for not more than sixty (60) days or by both such fine
521521 and imprisonment.
522522 B. As used in this s ection and Section 1358.1 of this title:
523523 1. “Agricultural products” shall include horses; and
524524 2. “For profit agricultural production ” means what is
525525 ordinarily considered a farming or ranching operation intended for
526526 profit. The term refers to the raising of food crops or livestock
527527 for sale and includes ranches, orchards, and dairies. Also included
528528 is any feedlot operation, whether the land upon which a feedlot
529529 operation is located is used to grow crops to fee d the livestock in
530530 the feedlot and regardless of whether the livestock fed are owned by
531531 persons conducting the feedlot ; and
532532 3. “Ranching” or “ranch” shall include the business, or
533533 facilities for the business, of raising horses.
534534 Provided, sales of i tems at race meetings as defined in Section
535535 200.1 of Title 3A of the Oklahoma Statutes shall not be exe mpt
536536 pursuant to the provisions of this section and Section 1358.1 of
537537 this title.
538538 SECTION 2. AMENDATORY 68 O.S. 2021, Section 13 58.1, is
539539 amended to read as follows:
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591591 Section 1358.1. A. In order to qualify for any exemption
592592 authorized by Section 1358 of this title, at the time of sale, the
593593 person to whom the sale is made shall be required to furnish the
594594 vendor proof of eligibility for the exemption as required by this
595595 section.
596596 B. All vendors shall honor the proof of eligibility for sales
597597 tax exemption as authorized by this section and sales to a person
598598 providing such proof shall be exempt from the tax levied by this
599599 article, Section 1350 et seq. of this title.
600600 C. The agricultural exemption permit, the size and design of
601601 which shall be prescribed by the Oklahoma Tax Commission, shall
602602 constitute proof of eligibility for sales tax exemptions authorized
603603 by Section 1358 of this title. The permit shall be obtained by
604604 listing personal property used in farming or ranching by the person
605605 with the county assessor each year as provided by law. If the
606606 assessor determines that the personal property is correctly listed
607607 and assessed for ad valorem taxation and the county treasurer
608608 certifies whether the person has delinquent accounts appearing on
609609 the personal property tax lien docket in the county treasurer ’s
610610 office, the assessor shall certify the assessment upon a form
611611 prescribed by the Oklahoma Tax Commission. One copy shall be
612612 retained by the assessor, one copy shall be forwarded to the
613613 Oklahoma Tax Commission and one copy shall be given to the person
614614 listing the personal property. Upon verification that the applicant
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666666 qualifies for the exemptions authorized by Section 1358 of this
667667 title and that the applicant has no delinquent accounts appearing on
668668 the personal property tax lien docket in the office of the county
669669 treasurer, a permit shall be issued as prescribed by this section.
670670 The permit shall be renewable every three (3) years in the mann er
671671 provided by this section, or as provided by subsection I of this
672672 section.
673673 D. A person who does not otherwise quali fy for a permit
674674 pursuant to subsection C of this section, except as provided in
675675 subsection E of this section, shall file with the Oklahoma Tax
676676 Commission an application for an agricultur al exemption permit
677677 constituting proof of eligibility for the sales ta x exemptions
678678 authorized by Section 1358 of this title, setting forth such
679679 information as the Tax Commission may require. The app lication
680680 shall be certified by the applicant that the app licant is engaged in
681681 custom farming operations or in the business of f arming or ranching.
682682 If the applicant is a corporation, the application shall be
683683 certified by a legally constituted officer there of.
684684 The Oklahoma Tax Commission shall accept any of the f ollowing as
685685 proof of eligibility for the exemptions authorized by thi s section
686686 or pursuant to Section 1358 of this title .:
687687 1. A copy of IRS Schedule F, a copy o f IRS form 1065 or a copy
688688 of IRS form 4835, or any equivalent form prescribed by the Internal
689689 Revenue Service, with respect to a federal income tax return;
690690
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741741 2. A one-page business description form provided by the
742742 Oklahoma Tax Commission;
743743 3. Farm Service Agency form 156EZ; or
744744 4. Other documents at the discretion of the Oklahoma Tax
745745 Commission that verify active agriculture production.
746746 E. Except as provided in t his subsection, for a person who is a
747747 resident of another state and who is engaged in custom far ming
748748 operations in this state, the pers on shall provide the vendor proof
749749 of residency, the name, address and telephone number of the person
750750 engaging the custom farmer and certification on the face of the
751751 invoice, under the penalty of perjury, that the prop erty purchased
752752 shall be used in agricul tural production as proof of eligibility for
753753 the sales tax exemption authorized by Section 1358 of this title.
754754 Any person who is a resident of another state and who is engaged in
755755 custom farming operations in this sta te and who owns property in
756756 this state, shall obtain proof of eligibility as provided in
757757 subsection C or D of this section.
758758 F. If an agricultural exemption pe rmit holder purchases
759759 tangible personal property from a vendor on a regular basis, the
760760 permit holder may furnish the vendor proof of eli gibility as
761761 provided for in subsections C and D of this s ection and the vendor
762762 may subsequently make sales of tangible p ersonal property to the
763763 permit holder without requiring proof of eligibility for each
764764 subsequent sale. Provided, the permit holder shal l notify the
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816816 vendor of all purchases which are not exempt from sales tax under
817817 the provisions of Section 1358 of this ti tle and remit the
818818 applicable amount of tax thereon. If the permit holder fails to
819819 notify the vendor of purchases not exempt from sales tax, then
820820 sufficient grounds shall exist for the Oklahoma Tax Commission to
821821 cancel the agricultural exemption permit of the permit holder who so
822822 failed to notify the vendor.
823823 G. If an out-of-state agricultural exempti on permit holder
824824 purchases tangible per sonal property from a vendor within this state
825825 who is not in the business of shipping the tangible personal
826826 property purchased, then the out-of-state agricultural exemption
827827 permit holder is responsible for providing a n export bill of lading
828828 or other documentation to the vendor from whom the tangible personal
829829 property was purchased showing that the point of delivery of such
830830 goods for use and consumption is outside this state.
831831 H. A purchaser who uses an agricultural exe mption permit or
832832 provides proof of elig ibility pursuant to subsection E of this
833833 section to purchase, e xempt from sales tax, items not authorized for
834834 exemption under Section 13 58 of this title shall be subject to a
835835 penalty in the amount of Five Hundred Doll ars ($500.00).
836836 I. The Tax Commission shall provide a form for the renewal of
837837 the agricultural exempti on permit provided by this section. The
838838 form shall include a check box next to a statement attesting that the
839839 permit holder has continued agricultural production activities.
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891891 Individuals that submit the ren ewal form with their signature and a
892892 marked checkbox shall be eligible for a renewed permit. Any person
893893 that willfully provides false or fraudulent information pursuant to
894894 the provisions of this subsecti on, upon conviction, shall be guilty
895895 of a felony punishable by the imposition of a fine of Two Thousand
896896 Dollars ($2,000.00) or imprisonment for not more than two (2) years.
897897 SECTION 3. This act shall become effective November 1, 2022.
898898
899899 58-2-2326 QD 1/20/2022 8:03:47 AM