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HOUSE OF REPRESENTATIVES - FLOOR VERSION
STATE OF OKLAHOMA
1st Session of the 58th Legislature (2021)
ENGROSSED SENATE
BILL NO. 825 By: Standridge of the Senate
and
West (Kevin) of the House
An Act relating to revenue and taxation; amending 6 8
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 date.
BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
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 assess, levy, and collect taxes for general
and special purposes of municipal government as the Legislature may
levy and collect for purposes of state government, subject to the
provisions of subsection F of this section, except ad valo rem
property taxes. Provided:
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1. Taxes shall be uniform upon the same class subjects, and any
tax, charge, or fee levied upon or measured by income or receipts
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 primarily used or located in such city or town for
a period of time longer than six (6) months of a taxable 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 provisions of Sections 348.1,
624 and 321 of Title 36 of the Oklahoma Statutes, by reason of
payment of taxes imposed under such sections;
4. Cooperatives and communications companies are hereby
authorized to pass on to their subscribers in the incorporated city
or town involved, the amount of any special municipal fee, charge or
tax hereafter assessed or levied on or collected from such
cooperatives or commu nications companies;
5. No earnings, payroll or income taxes may be levied on
nonresidents of the cities or towns levying such tax;
6. The governing body of any city or town shall be prohibited
from proposing taxing ordinances more often than three times in any
calendar year, or twice in any six -month period; and
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7. Any revenues derived from a tax authorized by this
subsection not dedicated to a limited purpose shall be deposited in
the municipal general fund.
B. A sales tax authorized in subsection A o f this section may
be levied for limited purposes specified in the ordinance levying
the tax. Such ordinance shall be submitted to the voters for
approval as provided in Section 2705 of this title. Any sales tax
levied or any change in the rate of a sale s tax levied pursuant to
the provisions of this section shall become effective on the first
day of the calendar quarter following approval by the voters of the
city or town unless another effective date, which shall also be on
the first day of a calendar q uarter, is specified in the ordinance
levying the sales tax or changing the 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 generated by any tax levied pursuant to
this subsection. Money in the fund shall be accumulated from year
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 fund shall be nonfiscal and shall not be
considered in computing any levy 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
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and only for the purposes specifically described in the taxing
ordinance as approved by the voters.
C. The Oklahoma Tax Commission shall give notice to all vendors
of a rate change at least sixty (60) days prior to the effective
date of the rate change. Provided, for purchases from printed
catalogs wherein the purchaser computed the tax based 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 shall
delay the effective date of the rate change to the first day of the
next calendar quarter.
D. The change in the boundary of a municipality shall be
effective, for sales and use tax purposes only, on the first day of
a calendar quarter after a minimum of sixty (60) days ’ notice to
vendors.
E. If the proceeds of any sales tax levied by a municipa lity
pursuant to subsection B of this section are being used by the
municipality for the purpose of retiring indebtedness incurred by
the municipality or by a public trust of which the municipality is a
beneficiary for the specific purpose for which the sa les tax was
imposed, the sales tax shall not be repealed until such time as the
indebtedness is retired. However, in no event shall the life of the
tax be extended beyond the duration approved by the voters of the
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municipality. The provisions of this sub section shall apply to all
sales tax levies imposed by a municipality and being used by the
municipality for the purposes set 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 body shall be exempt from the sales
tax imposed by any incorporated city or town, in accordance with and
to the extent set forth in Section 3 of this act 1357.10 of this
title.
G. Any municipality that levies a dedicated tax pursuant t o a
vote of the people for the purpose of funding public safety or any
other governmental purpose shall not redirect all or a portion of
the dedicated tax revenue to another purpose without a vote of the
people authorizing such action.
SECTION 2. This act shall become effective November 1, 2021.
COMMITTEE REPORT BY: COMMITTEE ON RU LES, dated 04/06/2021 - DO PASS.