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ENGROSSED SENATE
BILL NO. 825 By: Standridge of the Senate
and
West (Kevin) of the House
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 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 ge neral
and special purposes of municipal government 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 class sub jects, 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;
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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 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 corporation s
exempted from other t axation under the provisions 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 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 communic ations companies;
5. No earnings, payroll or income ta xes may be levied on
nonresidents of the cities 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 der ived from a tax authorized by this
subsection not dedicated to a limited purpose shall be de posited in
the municipal general fund.
B. A sales tax authorized in subsection A of t his section may
be levied for limited purposes specifie d in the ordinance levy ing
the tax. Such ordinance shall be submitted to the voters for
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approval as provided in Se ction 2705 of this title. Any sales tax
levied or any change in the rate of a sales t ax levied pursuant to
the provisions of this section sh all become effective 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 quar ter, is specified in the ordinance
levying the sales ta x 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 sha ll 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 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 fund shal l be nonfiscal and shall 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.
C. The Oklahoma Tax Commission shall give notice to all vendors
of a rate change at least sixty (60) da ys prior to the effective
date of the rate change. Pro vided, for purchases fr om printed
catalogs wherein the purchaser computed the tax bas ed upon local tax
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rates published in the catalog, the rate change shall not be
effective until the first day of a ca lendar quarter after a minimum
of one hundred twenty (1 20) 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 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 municipalit y
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 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 as the
indebtedness is retired. However, in no event shall the life of the
tax be extended beyond the duration approve d by the voters of the
municipality. The provisions of this subsec tion shall apply to all
sales tax levies imposed by a municipality and being u sed 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
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tax imposed by any incorp orated 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 to 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.
Passed the Senate the 8th 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