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STATE OF OKLAHOMA
1st Session of the 58th Legislature (2021)
SENATE BILL 825 By: Standridge
AS INTRODUCED
An Act relating to revenue and taxation; amending 68
O.S. 2011, Section 2701 , which relates to the
authorization to tax for purposes of municipal
government; requiring a vote of the people to
redirect or reduce funds provided by taxes levied by
a vote of the people; updating statutory reference ;
and providing an effective dat e.
BE IT ENACTED BY THE PEOPLE OF THE STATE OF OK LAHOMA:
SECTION 1. AMENDATORY 68 O.S. 2011, Section 2701, is
amended to read as follows:
Section 2701. A. Any incorporated city or town in this state
is hereby authorized to ass ess, levy, and collect taxes for general
and special purposes of municipal govern ment as the Legislature may
levy and collect for purposes of state go vernment, subject to the
provisions of subsection F of this section, except ad valorem
property taxes. Provided:
1. Taxes shall be uniform upon the same cl ass subjects, and any
tax, charge, or fee levied upon or measured by income or receipts
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from the sale of products or services shall be uniform upon all
classes of taxpayers;
2. Motor vehicles may be taxed by the city or town only when
such vehicles are pr imarily used or located in suc h city or town for
a period of time lon ger than six (6) months of a t axable year;
3. The provisions of this section shall not be construed to
authorize imposition of any tax upon persons, firms, or corporations
exempted from other taxation under the provi sions of Sections 348.1,
624 and 321 of Title 36 of the Oklahoma Stat utes, by reason of
payment of taxes imposed under such sections;
4. Cooperatives and communications compa nies are hereby
authorized to pass on to their subs cribers in the incorporated ci ty
or town involved, the amount of any special municipal fee, charge or
tax hereafter assessed or levied on or collected from such
cooperatives or communications companies;
5. No earnings, payroll or income taxes may be levie d on
nonresidents of the citie s or towns levying such tax;
6. The governing body of any city or to wn shall be prohibited
from proposing taxing ordinances more often than three times in any
calendar year, or twice in any six-month period; and
7. Any revenues derived from a tax authori zed by this
subsection not dedicated to a limited purpose shall be de posited in
the municipal general fund.
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B. A sales tax authorized in subsection A of this section may
be levied for limited purposes specified in the ordinan ce levying
the tax. Such ordinance shall be submitted to the voters for
approval as provided in Se ction 2705 of this title. Any sales tax
levied or any change in the rate of a sales tax levied pursuant t o
the provisions of this section shall become effec tive on the first
day of the calendar quarter following approval by t he voters of the
city or town unless another effective date, which shall also be on
the first day of a calendar quarter, is specified in the ordinance
levying the sales tax or changing th e rate of sales tax. Such
ordinance shall describe with specificity the projects or
expenditures for which the limited -purpose tax levy would be made.
The municipal governing body shall create a limited -purpose fund and
deposit therein any revenue genera ted by any tax levied pursuant to
this subsection. Money in the fund shall be accumulated from yea r
to year. The fund shall be placed in an insured interest -bearing
account and the interest which accrues on the fund shall be retained
in the fund. The fu nd shall be nonfiscal and shal l not be
considered in computing any le vy when the municipality makes its
estimate to the excise board for needed appropriations. Money in
the limited-purpose tax fund shall be expended only as accumulated
and only for the purposes specifically described in the taxing
ordinance as approved by the voters.
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C. The Oklahoma Tax Commission shall give notice to all vendors
of a rate change at least sixty (60) days prior to the effe ctive
date of the rate change. Provided, for purch ases from printed
catalogs wherein the purchaser computed the tax bas ed upon local tax
rates published in the catalog, the rate change shall not be
effective until the first day of a calendar quarter after a minimum
of one hundred twenty (120) one hundred twenty-days’ notice to
vendors. Failure to give notice as required by this section shal l
delay the effective date of the rate change to the first day of the
next calendar quarter.
D. The change in the bo undary of a municipality shall be
effective, for sales and use tax purposes only, on the first day o f
a calendar quarter after a minimum of sixty (60) days’ notice to
vendors.
E. If the proceeds of any sales tax levied by a municipality
pursuant to subsection B of this section are being used by the
municipality for the purpose of retiring indebtedness i ncurred by
the municipality or by a pub lic trust of which the municip ality is a
beneficiary for the specific purpose for which the sales tax was
imposed, the sales tax shall not be repealed until such time a s the
indebtedness is retired. However, in no ev ent shall the life of the
tax be extended beyond the duration approve d by the voters of the
municipality. The provisions of this subsection shall apply to all
sales tax levies imposed by a municipality and being used by the
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municipality for the purposes s et forth in this subsection prior to
or after July 1, 1995.
F. The sale of an article of clothing or footwear designed to
be worn on or about the human bod y shall be exempt from the sales
tax imposed by any incorporated city or town, in accordance with an d
to the extent set forth in Section 3 of this act 1357.10 of this
title.
G. Any municipality that levies a tax pursuant to a vote of the
people for the purpose of funding public safety shall not redirect
the funds for another p urpose or reduce the funds devoted to public
safety from the levy without a vote of the people.
SECTION 2. This act shall become effective November 1, 2021.
58-1-7 MR 1/21/2021 3:38:26 PM