An Act
ENROLLED SENATE
BILL NO. 422 By: Simpson, Pederson, Hamilton
and Stephens of the Senate
and
Kerbs, Burns, Pfeiffer,
Caldwell (Trey), Lowe
(Dick), West (Rick), Moore,
Dobrinski, Fetgatter, Mize,
Strom, Vancuren, Grego,
McCall, Baker, Culver,
Frix, McDugle, Bashore,
Boles, Hardin (David) ,
Hilbert and Stegall of the
House
An Act relating to agriculture tax exemption;
amending 68 O.S. 2011, Section 1358.1, which relates
to sales tax exemptions; modifying language;
establishing documentary proofs of active agriculture
production for purposes of sales tax application;
directing acceptance of certain documents as proof of
eligibility; providing an effective date; and
declaring an emergency.
SUBJECT: Sales tax exemption
BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
SECTION 1. AMENDATORY 68 O.S. 2011, Section 1358.1, is
amended to read as follows:
Section 1358.1. A. In order to qualify for any exemption
authorized by Section 135 8 of this title, at the time of sale, the
person to whom the sale is made shall be required to furnish the
ENR. S. B. NO. 422 Page 2
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.
C. The agricultural exemption permit, the size and design of
which shall be prescribed b y the Oklahoma Tax Commission, shall
constitute proof of eligibility 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 that 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 property. 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.
D. A person who does not otherwise quali fy for a permit
pursuant to subsection C of this section, except as provided in
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 application
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 thereof.
ENR. S. B. NO. 422 Page 3
The Oklahoma Tax Commission shall accept any of the f ollowing as
proof of eligibility for the 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 federal 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 person shall provide the vendor proof
of residency, the name, address and telephone number of the person
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 agricultural 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 eligibility 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 shall 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
ENR. S. B. NO. 422 Page 4
cancel the agricultural 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 personal property from a vendor within this state
who is not in the business of shipping the tangible 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 point of delivery of such
goods for use and consumption is outside the State of Oklahoma this
state.
H. A purchaser who uses an agricultural exemption permit or
provides proof of eligibility pursuant to subsection E of this
section to purchase, exempt from sales tax, items not authorized for
exemption under Section 1358 of this title shall be subject to a
penalty in the amount of Five Hundred Dollars ($500.00).
SECTION 2. This act shall become effective July 1, 2021.
SECTION 3. It being immediately necessary for the preservation
of the public peace, health or safety, an emergency is hereby
declared to exist, by reason whereof this act shall take effect and
be in full force from and after its passage and approval.
ENR. S. B. NO. 422 Page 5
Passed the Senate the 19th day of May, 2021.
Presiding Officer of the Senate
Passed the House of Representatives the 24th day of May, 2021.
Presiding Officer of the House
of Representatives
OFFICE OF THE GOVERNOR
Received by the Office of the Governor this _______ _____________
day of ___________________, 20_______, at _______ o'clock _______ M.
By: _______________________________ __
Approved by the Governor of the State of Oklahoma this _____ ____
day of _________________ __, 20_______, at _______ o'clock _______ M.
_________________________________
Governor of the State of Oklahoma
OFFICE OF THE SECRETARY OF STATE
Received by the Office of the Secretary of State this _______ ___
day of __________________, 20 _______, at _______ o'clock _______ M.
By: _____________________ ____________