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STATE OF OKLAHOMA
2nd Session of the 58th Legislature (2022)
SENATE BILL 1655 By: Pederson
AS INTRODUCED
An Act relating to agricultural sales tax exemption;
amending 68 O.S. 2021, Section 1358.1, which relates
to the exemption permit; providing exception;
requiring the Oklahoma Tax Co mmission to provide
certain renewal form; providing eligibility for
permit renewal upon submission of form ; and providing
an effective date.
BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
SECTION 1. AMENDATORY 68 O.S. 2021, Section 1358.1, is
amended to read as follows:
Section 1358.1. A. In order to qualify for any exemption
authorized by Section 1358 of this title, at the time of sale, the
person to whom the sal e is made shall be required to furnish the
vendor proof of eligibility for the exemption as required by this
section.
B. All vendors shall honor the proof of eligibility for sales
tax exemption as authorized by this section and sales to a person
providing such proof shall be exempt from the tax levied by this
article, Section 1350 et seq. of this title.
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C. The agricultural exemption permit, the size and design of
which shall be prescribed by the Oklahoma Tax Commission, shall
constitute proof of eligibili ty for sales tax exemptions authorized
by Section 1358 of this title. The permit shall be obtained by
listing personal property used in farming or ranching by the person
with the county assessor each year as provided by law. If the
assessor determines th at the personal property is correctly listed
and assessed for ad valorem taxation and the county treasurer
certifies whether the person has delinquent accounts appearing on
the personal property tax lien docket in the county treasurer ’s
office, the assessor shall certify the assessment upon a form
prescribed by the Oklahoma Tax Commission. One copy shall be
retained by the assessor, one copy shall be forwarded to the
Oklahoma Tax Commission and one copy shall be given to the person
listing the personal pro perty. Upon verification that the applicant
qualifies for the exemptions authorized by Section 1358 of this
title and that the applicant has no delinquent accounts appearing on
the personal property tax lien docket in the office of the county
treasurer, a permit shall be issued as prescribed by this section.
The permit shall be renewable every three (3) years in the mann er
provided by this section , or as provided by subsection I of this
section.
D. A person who does not otherwise quali fy for a permit
pursuant to subsection C of this section, except as provided in
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subsection E of this section, shall file with the Oklahoma Tax
Commission an application for an agricultur al exemption permit
constituting proof of eligibility for the sales ta x exemptions
authorized by Section 1358 of this title, setting forth such
information as the Tax Commission may require. The app lication
shall be certified by the applicant that the app licant is engaged in
custom farming operations or in the business of f arming or ranching.
If the applicant is a corporation, the application shall be
certified by a legally constituted officer there of.
The Oklahoma Tax Commission shall accept any of the f ollowing as
proof of eligibility for th e exemptions authorized by thi s section
or pursuant to Section 1358 of this title.
1. A copy of IRS Schedule F, a copy of IRS form 1065 or a copy
of IRS form 4835, or any equivalent form prescribed by the Internal
Revenue Service, with respect to a federa l income tax return;
2. A one-page business description form provided by the
Oklahoma Tax Commission;
3. Farm Service Agency form 156EZ; or
4. Other documents at the discretion of the Oklahoma Tax
Commission that verify active agriculture production.
E. Except as provided in t his subsection, for a person who is a
resident of another state and who is engaged in custom farming
operations in this state, the pers on shall provide the vendor proof
of residency, the name, address and telephone number of the pe rson
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engaging the custom farmer and certification on the face of the
invoice, under the penalty of perjury, that the property purchased
shall be used in agricul tural production as proof of eligibility for
the sales tax exemption authorized by Section 1358 of this title.
Any person who is a resident of another state and who is engaged in
custom farming operations in this state and who owns property in
this state, shall obtain proof of eligibility as provided in
subsection C or D of this section.
F. If an agricultural exemption pe rmit holder purchases
tangible personal property from a vendor on a regular basis, the
permit holder may furnish the vendor proof of eli gibility as
provided for in subsections C and D of this s ection and the vendor
may subsequently make sales of tangible p ersonal property to the
permit holder without requiring proof of eligibility for each
subsequent sale. Provided, the permit holder shal l notify the
vendor of all purchases which are not exempt from sales tax under
the provisions of Section 1358 of this ti tle and remit the
applicable amount of tax thereon. If the permit holder fails to
notify the vendor of purchases not exempt from sales tax, then
sufficient grounds shall exist for the Oklahoma Tax Commission to
cancel the agricultu ral exemption permit of the permit holder who so
failed to notify the vendor.
G. If an out-of-state agricultural exemption permit holder
purchases tangible per sonal property from a vendor within this state
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who is not in the business of shipping the tangib le personal
property purchased, then the out-of-state agricultural exemption
permit holder is responsible for providing an export bill of lading
or other documentation to the vendor from whom the tangible personal
property was purchased showing that the po int of delivery of such
goods for use and consumption is outside this state.
H. A purchaser who uses an agricultural exemption permit or
provides proof of elig ibility pursuant to subsection E of this
section to purchase, ex empt from sales tax, items not authorized for
exemption under Section 13 58 of this title shall be subject to a
penalty in the amount of Five Hundred Dollars ($500.00).
I. The Tax Commission shall provide a form for the renewal of
the agricultural exemptio n permit provided by this section. The
form shall include a check box next to a statement attesting that the
permit holder has continued agricultural production activities.
Individuals that submit the renewal form with th eir signature and a
marked checkbox shall be eligible for a renewe d permit.
SECTION 2. This act shall become effective November 1, 2022.
58-2-2397 QD 1/20/2022 4:34:11 PM