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ENGROSSED SENATE
BILL NO. 409 By: Bergstrom of the Senate
and
Fetgatter of the House
An Act relating to the Oklahoma Research and
Development Incentives Act; amending 68 O.S. 2011 ,
Sections 54003 and 54004, which relate to the
exemption of sales and use taxes for qualified
purchases; modifying time period during which
specified exemption may be claimed; modifying time
period during which qual ified purchase may be
eligible for refund; updating statutory references;
and providing an effect ive date.
BE IT ENACTED BY THE PEOPLE OF TH E STATE OF OKLAHOMA:
SECTION 1. AMENDATORY 68 O.S. 2011, Section 54003, is
amended to read as follows:
Section 54003. A. There are hereby specifically exempted from
the taxes levied by Section 1354 and Section 1402 of Title 68 of the
Oklahoma Statutes this title sales of qualified purchases made after
July 1, 1992, and before Jan uary 1, 2022, to a qualified purchaser
which is primarily engaged in computer services and data p rocessing
as defined under Industrial Group Numbers 7372, 7373, 7374 and 7375
of the SIC Manual, latest revision, or a quali fied purchaser which
is primarily engaged in research and development as de fined under
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Industrial Group Numbers 8731, 8732, 8733 and 8734 of the SIC
Manual, latest revision.
B. A qualified purchaser which is primarily engaged in computer
services and data processing as defined under Indust rial Group
Number 7374 of the SIC Manual , latest revision, shall be required to
have a minimum of One Hundred Thousand Dollars ($100,000.00) in
qualified purchases in order to be eligible to receive the exemption
provided for in this section.
C. In order to be eligible to receive the exemption provided
for in this section, a new or expanding business shall not include
the existing employee positions of any business enterprise that is
directly or beneficially owned by a co rporation, trust, joint
venture, proprietorship, or partnership doing busin ess in this state
as of January 1, 1992.
D. Eligibility to receive the exemption provided for in this
subsection pursuant to the requirement to derive fifty percent (50%)
of revenues from out-of-state buyers or cons umers and pursuant to
the requirement that the business be primarily engaged in computer
services and data processing or in research and development shall be
established, subject to review by the Oklahoma Tax Commission, by
annually filing an affidavit wit h the Oklahoma Tax Commission
stating that the business so qualifies and such other information a s
required by the Commission. For purposes of determining whether
annual gross revenues are derived from sales to out -of-state buyers
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or consumers, all sales to the federal government shall be
considered to be sales to an out -of-state buyer or consumer.
SECTION 2. AMENDATORY 68 O.S. 2011, Section 54004, is
amended to read as follows:
Section 54004. A. In order to administer the exemp tion for
sales to a qualified computer s ervices, data processing or r esearch
and development faci lity as provided by Section 7 of this act
Section 54003 of this title , there shall be made a sales tax refund
for state and local sales taxes paid by the accou nt created by this
section to such quali fied facility.
B. The Oklahoma Tax Commission shall tran sfer each month from
sales tax collected the amount which the Commission estimates to be
necessary to make the sales tax refund provided by this section to
an account designated as the Commission det ermines.
C. Any refund shall be paid from the account pr escribed by this
section at the time the claim for refund is approved by the Oklahoma
Tax Commission. The amount of the refund shall not exceed the total
state and local sales taxes paid together wi th accrued interest upon
such total. The amount of inter est paid to a qualified computer
services, data processing or research and development facility upon
the principal amount of any refund made to such qualified facility
for purposes of administering t he exemption provided by Section 7 of
this act Section 54003 of this title, shall be determined according
to the provisions of this subsection. For any month during which
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the Oklahoma Tax Commission transfers a sum to the account
prescribed by subsection B of this section, the Commission shall
determine an interest rate by determining the rate of interest paid
for a three-month Treasury Bill of the United States government as
of the first working day of the month in which the transfer is made.
The interest rate so determined shall accrue upon the amount
transferred to the account. In each subsequent month, the
Commission shall determine the interest rate paid for a three -month
Treasury Bill of the United States gove rnment as of the first
working day of the month and such interest rate shall accrue upon
any amount transferred during the month and upon the amounts
previously transferred to the account together with interest
previously accrued upon such amounts.
D. For purposes of this section, state and loc al sales taxes
paid by a contractor or subcontractor for qualified purchases as
defined in Section 6 of this act Section 54002 of this title ,
purchased by that contractor or subcontractor pursuant to a contract
with a qualified computer services, d ata processing or research and
development facility shall, upon p roper showing, be refunded to such
qualified facility.
E. The qualified computer services, data processing or research
and development facility shall file wit h the Oklahoma Tax Commission
the following documentation for any refund claimed:
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1. Invoices indicating the amount of state and local sales tax
billed;
2. Affidavit of each vendor that state and local sales tax
billed has not been audited, rebated, or r efunded to such qualified
facility but rather the sales tax charged has been collected by the
vendor and remitted to the Oklahoma Tax Commission; and
3. All additional documentation required to be submitted
pursuant to rules promulgated by the Oklahoma Ta x Commission.
F. In the event that state and local sales tax was paid by a
contractor or subcont ractor, the qualified computer services, data
processing or research and development facility shall file with the
Oklahoma Tax Commission all documentation req uired in subsection E
of this section but in lieu of the affidavit of each vendor the
qualified facility shall file, for any refund claimed, an affidavit
from the contractor or subcontractor stating that the sales tax
refund of the qualified facility is ba sed on state and local sales
tax paid by the contractor or subcontractor on qualified purchases
as defined in Section 6 of this act Section 54002 of this title ,
purchased and that t he amount of state and local sales tax claimed
was paid to the vendor and n o credit, refund, or rebate has been
claimed by the contractor or subcontractor.
G. Only sales of qualified purchases as defined in Section 6 of
this act Section 54002 of this title , made after July 1, 1992 , and
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before January 1, 2022 , shall be eligible for the refund established
by this section.
H. The qualified computer services, data processing o r research
and development facility shall file, within thirty -six (36) months
of the date of the first purchase which is exempt from taxatio n
pursuant to the provisions of Section 7 of this act Section 54003 of
this title, with the Oklahoma Tax Commission a certification issued
by the Employment Security Commission in order to qualify for the
refund authorized by this section.
I. Notwithstanding the provisions of any state tax law, the
amount refunded under this section shall be assessed if the number
of new full-time-equivalent employees drops below the number
prescribed in Section 6 of this act Section 54002 of this title, at
any time within thirty -six (36) months of the date certification i s
issued by the Oklahoma Employment Security Commission.
SECTION 3. This act shall become effective November 1, 2021.
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Passed the Senate the 2nd day of March, 2021.
Presiding Officer of the Senate
Passed the House of Representatives the ____ day of __________,
2021.
Presiding Officer of the House
of Representatives