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ENGROSSED HOUSE
BILL NO. 1353 By: Fetgatter of the House
and
Howard of the Senate
[ revenue and taxation - exemption for custom order
manufacturing - effective date ]
BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
SECTION 1. AMENDATORY 68 O.S. 2021, Section 1352, is
amended to read as follows:
Section 1352. As used in the Oklahoma Sales Tax Code:
1. "Bundled transaction" means the retail sale of two or more
products, except real property and services to real property, where
the products are otherwise distinct and identifiable, and the
products are sold for one nonitemized price. A "bundled
transaction" does not include the sale of any products in which the
sales price varies, or is negotiabl e, based on the selection by the
purchaser of the products included in the transaction. As used in
this paragraph:
a. "distinct and identifiable products " does not include:
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(1) packaging such as containers, boxes, sa cks, bags,
and bottles, or other materi als such as wrapping,
labels, tags, and instruction guides, that
accompany the retail s ale of the products and are
incidental or immaterial to the retail sale
thereof, including but not limited to, grocery
sacks, shoeboxes, dry cleaning garment bags and
express delivery envelopes and boxes,
(2) a product provided free of charge with the
required purchase of another product. A product
is provided free of charge if the sales price of
the product purchased does not vary depending on
the inclusion of the produ ct provided free of
charge, or
(3) items included in the definition of gross
receipts or sales price, pursuant to this
section,
b. "one nonitemized price " does not include a price that
is separately identified by prod uct on binding sales
or other supporting sales-related documentation made
available to the customer in paper or electronic for m
including, but not limited to an invoice, bill of
sale, receipt, contract, service agreement, lease
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agreement, periodic notice o f rates and services, rate
card, or price list,
A transaction that otherwise meets the definition of a bundled
transaction shall not be considered a bundled transaction if it is:
(1) the retail sale of tangible personal property and
a service where the tan gible personal property is
essential to the use of the service, and is
provided exclusively in connection with the
service, and the true object of the transaction
is the service,
(2) the retail sale of services where one service is
provided that is essenti al to the use or receipt
of a second service and the first service is
provided exclusively in connection with the
second service and the true object of the
transaction is the second service,
(3) a transaction that includes taxable products and
nontaxable products and the purchase price or
sales price of the taxable products is de
minimis. For purposes of this subdivision, "de
minimis" means the seller’s purchase price or
sales price of taxable prod ucts is ten percent
(10%) or less of the total purchase pri ce or
sales price of the bundled produc ts. Sellers
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shall use either the purchase price or the sales
price of the products to determine if the taxable
products are de minimis. Sellers may not use a
combination of the purchase price and sales price
of the products to determine if the taxable
products are de minimis. Sellers shall use the
full term of a service contract to determ ine if
the taxable products are de minimis, or
(4) the retail sale of e xempt tangible personal
property and taxable tangible perso nal property
where:
(a) the transaction includes food and food
ingredients, drugs, durable medical
equipment, mobility enhanci ng equipment,
over-the-counter drugs, prosthetic devices
or medical supplies, and
(b) the seller’s purchase price or sales price
of the taxable tangible personal propert y is
fifty percent (50%) or less of the total
purchase price or sales price of the bund led
tangible personal property. Sellers may not
use a combination of t he purchase price and
sales price of the tangible personal
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property when making the fifty percent (50%)
determination for a transaction;
2. "Business" means any activity engaged in or caused to be
engaged in by any person with the object of gain, benefit, or
advantage, either direct or indirect;
3. "Commission" or "Tax Commission" means the Oklahoma Tax
Commission;
4. "Computer" means an electronic device that accepts
information in digital or similar form and manipulates it for a
result based on a seque nce of instructions;
5. "Computer software" means a set of coded instructions
designed to cause a "computer" or automatic data processing
equipment to perform a task;
6. "Consumer" or "user" means a person to whom a taxable sale
of tangible personal prop erty is made or to whom a taxable service
is furnished. "Consumer" or "user" includes all contrac tors to whom
a taxable sale of materials, supplies, equipment, or other tangible
personal property is made or to whom a taxable service is furnished
to be used or consumed in the performance of any contract;
7. "Contractor" means any person who performs a ny improvement
upon real property and who, as a necessary and incidental part of
performing such improvement, incorporates tangible personal property
belonging to or purchased by the person into the real property bein g
improved;
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8. "Drug" means a compound, substance or preparation, and any
component of a compound, substance or preparation:
a. recognized in the official United States
Pharmacopoeia, official Hom eopathic Pharmacopoeia of
the United States, or official Na tional Formulary, and
supplement to any of them,
b. intended for use in the diagnosis, cure, mitigation,
treatment, or prevent ion of disease, or
c. intended to affect the structure or any function of
the body;
9. "Electronic" means relating to technology having electrical,
digital, magnetic, w ireless, optical, electromagnetic, or similar
capabilities;
10. "Established place of business" means the location at which
any person regularly engages in, conducts, or operates a business in
a continuous manner for any length of time, that is open to th e
public during the hours customary to such business, in which a stock
of merchandise for resale is maintained, and which is not exempted
by law from attachme nt, execution, or other species of forced sale
barring any satisfaction of any delinquent tax liab ility accrued
under the Oklahoma Sales Tax Code;
11. "Fair authority" means:
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a. any county, municipality, school district, public
trust or any other politica l subdivision of this
state, or
b. any not-for-profit corporation acting pursuant to an
agency, operating or management agreement which has
been approved or authorized by the governing body of
any of the entities specified in subparagraph a of
this paragraph which conduct, operate or produce a
fair commonly unders tood to be a county, district or
state fair;
12. a. "Gross receipts", "gross proceeds" or "sales price"
means the total amount of consideration, including
cash, credit, property and services, for w hich
personal property or services are sold, leased or
rented, valued in money, whether received i n money or
otherwise, without any deduction for the following:
(1) the seller’s cost of the property sold,
(2) the cost of materials used, labor or service
cost,
(3) interest, losses, all costs of transportation to
the seller, all taxes imposed on the sell er, and
any other expense of the seller,
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(4) charges by the seller for any services nec essary
to complete the sale, other than delivery and
installation charges,
(5) delivery charges and installation charges, unless
separately stated on the invoice, billin g or
similar document given to the purchaser, and
(6) credit for any trade -in.
b. Such term shall not include:
(1) discounts, including cash, term, or coupons that
are not reimbursed by a third party that are
allowed by a seller and taken by a purchaser on a
sale,
(2) interest, financing, and carrying charges from
credit extended on the sale of personal property
or services, if the amount is separately stated
on the invoice, bill of sale or similar document
given to the purchaser, and
(3) any taxes legally imposed directly on the
consumer that are separately stated on the
invoice, bill of sal e or similar document given
to the purchaser.
c. Such term shall includ e consideration received by the
seller from third parties i f:
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(1) the seller actually receives con sideration from a
party other than the purchaser and the
consideration is directly rela ted to a price
reduction or discount on the sale,
(2) the seller has an obligation to pass the price
reduction or discount through to the purchaser,
(3) the amount of the consideration attributable to
the sale is fixed and determinable by the seller
at the time of the sale of the item to the
purchaser, and
(4) one of the following criteria is met:
(a) the purchaser presents a coupon, certificate
or other documentation to the seller to
claim a price reduction or discount where
the coupon, certificate or docu mentation is
authorized, distributed or granted by a
third party with the understanding that the
third party will reimburse any se ller to
whom the coupon, certificate or
documentation is presented,
(b) the purchaser identifies himself or herself
to the seller as a member of a group or
organization entitled to a price reductio n
or discount; provided, a "preferred
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customer" card that is available to any
patron does not cons titute membership in
such a group, or
(c) the price reduction or discount is
identified as a third-party price reduction
or discount on the invoice received b y the
purchaser or on a coupon, certificate or
other documentation presented by the
purchaser;
13. a. "Maintaining a place of business in this state" means
and shall be presumed to inc lude:
(1) (a) utilizing or maintaining in this state,
directly or by subsidiary, an office,
distribution house, sales house, wareh ouse,
or other physical place of busine ss, whether
owned or operated by the vendor or any other
person, other than a common ca rrier acting
in its capacity as such, or
(b) having agents operating in this state,
whether the place of business or agent
is within this state temporarily or
permanently or whether the person or
agent is authorized to do business
within this state, and
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(2) the presence of any person, other than a common
carrier acting in its capacity as such, that has
substantial nexus in this state and that:
(a) sells a similar line of products as the
vendor and does so under the same or a
similar business name,
(b) uses trademarks, service marks or trade
names in this state that are the sam e
or substantially similar to those used
by the vendor,
(c) delivers, installs, assembles or
performs maintenance services for the
vendor,
(d) facilitates the vendor ’s delivery of
property to customers in the state by
allowing the vendor’s customers to pick
up property sold by the vendor at an
office, distribution facility,
warehouse, storage place or similar
place of business maintained by the
person in this state, or
(e) conducts any other activities in this state
that are significantly associated with th e
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vendor’s ability to establish and maintain a
market in this state for the vendor ’s sale.
b. The presumptions in divisions (1) and (2) of
subparagraph a of this paragraph may be rebutt ed by
demonstrating that the person ’s activities in this
state are not significantly associated with the
vendor’s ability to establish and maintain a market in
this state for the vendor’s sales.
c. Any ruling, agreement or contract, whether written or
oral, express or implied, between a person and
executive branch of this sta te, or any other state
agency or department, stating, agree ing or ruling that
the person is not "maintaining a place of business in
this state" or is not required to collect sales and
use tax in this state despite the presence of a
warehouse, distribution center or fulfillment center
in this state that is owned or operated by the vendor
or an affiliated person of the vendor shall be null
and void unless it is specifically approved by a
majority vote of each house of the Oklahoma
Legislature;
14. "Manufacturing" means and includes the activity of
converting or conditioning tangible personal property by changing
the form, composition, or quality of character of some existing
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material or materials, including natural resources, by procedures
commonly regarded by the average person as manufacturing,
compounding, process ing or assembling, into a material or m aterials
with a different form or use. Manufacturing shall also include the
manufacturing, compounding, processing, or fabrication of materials
into articles of tangible personal property according to the special
order of a customer (custom order manufac turing) by manufacturers
classified as operating in North American Industry Classification
System (NAICS) Sectors 32 and 33, but does not include such custom
order manufacturing by manufacturers classified in other NA ICS code
sectors. "Manufacturing" does not include extractive industrial
activities such as mining, quarrying, logging, and d rilling for oil,
gas and water, nor oil and gas field processes, such a s natural
pressure reduction, mechanical separation, heatin g, cooling,
dehydration and compression ;
15. "Manufacturing operation" means the designing,
manufacturing, compounding, proce ssing, assembling, warehousing, or
preparing of articles for sale as ta ngible personal property. A
manufacturing operation begins at the point where the materials
enter the manufacturing site and ends at the point where a finished
product leaves the manuf acturing site. "Manufacturing operation "
does not include administrati on, sales, distribution,
transportation, site construction, or site maintenance. Extractive
activities and field processes shall not be deemed to be a part of a
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manufacturing operation even when performed by a person otherwise
engaged in manufacturing;
16. "Manufacturing site" means a location where a manufactur ing
operation is conducted, including a location consisting of one or
more buildings or structures in an area owned, leased, o r controlled
by a manufacturer;
17. "Over-the-counter drug" means a drug that contains a label
that identifies the product as a d rug as required by 21 C.F.R.,
Section 201.66. The over-the-counter-drug label includes:
a. a "Drug Facts" panel, or
b. a statement of the "active ingredient(s) " with a list
of those ingredients co ntained in the compound,
substance or preparation;
18. "Person" means any individual, company, pa rtnership, joint
venture, joint agreement, association, mutual or otherwise, limited
liability company, corporation, estate, trust, business trust,
receiver or trustee appointed by any state or federal court or
otherwise, syndicate, this state, any county, city, municipality,
school district, any other political subdivision of the state, or
any group or combination acting as a unit, in the plural or singular
number;
19. "Prescription" means an order, formula or recipe issued in
any form of oral, written, e lectronic, or other means of
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transmission by a duly licensed "practitioner" as defined in Section
1357.6 of this title;
20. "Prewritten computer software " means "computer software",
including prewritten upgrades, whi ch is not designed and developed
by the author or other creator to the specifications of a specific
purchaser. The combining of two or more prewritten computer
software programs or prewritten port ions thereof does not cause the
combination to be other tha n prewritten computer software.
Prewritten software includes software designed and developed by the
author or other creator t o the specifications of a specific
purchaser when it is sold to a perso n other than the purchaser.
Where a person modifies or enh ances computer software of which the
person is not the author or creator, the person shall be deemed to
be the author or creat or only of such person ’s modifications or
enhancements. Prewritten sof tware or a prewritten portion thereof
that is modified or e nhanced to any degree, where such modif ication
or enhancement is designed and developed to the specifications of a
specific purchaser, remains prewritten software; provided, however,
that where there is a reasonable, separately stated charge or an
invoice or other statement of the price given t o the purchaser for
such modification or enhancement, such modification or enhancement
shall not constitute prewritten computer software;
21. "Repairman" means any person who performs any repair
service upon tangible personal property of the consumer, whe ther or
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not the repairman, as a necessary and incidental part of performing
the service, incorporates tangible personal property belonging to or
purchased by the repairman into the tangible personal property being
repaired;
22. "Sale" means the transfer o f either title or possession of
tangible personal property for a valuable consideration regardless
of the manner, method, instrumentality, or device by which the
transfer is accomplished in this state, or other transa ctions as
provided by this paragraph, i ncluding but not limited to:
a. the exchange, barter, lease, or rental of tangible
personal property resulting in the transfer of the
title to or possession o f the property,
b. the disposition for consumption or use i n any business
or by any person of all goods, wares, merchandise, or
property which has been purchased for resale,
manufacturing, or further processing,
c. the sale, gift, exchange, or other dispos ition of
admission, dues, or fees to clubs, places of
amusement, or recreational or athletic event s or for
the privilege of having access to or the use of
amusement, recreational, athle tic or entertainment
facilities,
d. the furnishing or rendering of serv ices taxable under
the Oklahoma Sales Tax Code, and
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e. any use of motor fuel or diesel fuel by a s upplier, as
defined in Section 500.3 of this title, upon which
sales tax has not previo usly been paid, for purposes
other than to propel motor vehicles over t he public
highways of this state. Motor fuel or diesel fue l
purchased outside the state and used for purposes
other than to propel motor vehicles over the public
highways of this state shall not constitute a sale
within the meaning of this paragraph;
23. "Sale for resale" means:
a. a sale of tangible personal pr operty to any purchaser
who is purchasing tangible personal property for the
purpose of reselling it within the geographical l imits
of the United States of America or its territories or
possessions, in the normal course of business either
in the form or condition in which it is purchased or
as an attachment to or integral part of other tangible
personal property,
b. a sale of tangible personal property to a purchaser
for the sole purpose of the rent ing or leasing, within
the geographical limits of the Unite d States of
America or its territories or possessions, of the
tangible personal property to another person by the
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purchaser, but not if incidental to the renting or
leasing of real estate,
c. a sale of tangible goods and products within this
state if, simultaneously with the sale, the vendor
issues an export bill of lading, or other
documentation that the point of delivery of suc h goods
for use and consumption is in a foreign country and
not within the territorial confines of the United
States. If the vend or is not in the business of
shipping the tangible goods and products that are
purchased from the vendor, the buyer or purchas er of
the tangible goods and products is responsible for
providing an export bill of lading or other
documentation to the vendor f rom whom the tangible
goods and products were purchased showing that the
point of delivery of such goods for use and
consumption is a foreign country and not within the
territorial confines of the United States, or
d. a sales of any carrier access services , right of
access services, telecommuni cations services to be
resold, or telecommunications used in the subsequent
provision of, use as a component part of, or
integrated into, end -to-end telecommunications
service;
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24. "Tangible personal property " means personal property that
can be seen, weighed, measured, felt, or touched or that is in any
other manner perceptible to the sens es. "Tangible personal
property" includes electricity, water, gas, ste am and prewritten
computer software. This definition shall be applicable only for
purposes of the Oklahoma Sales Tax Code;
25. "Taxpayer" means any person liable to pay a tax imposed by
the Oklahoma Sales Tax Code;
26. "Tax period" or "taxable period" means the calendar period
or the taxpayer’s fiscal period for which a taxpayer has obtained a
permit from the Tax Commission to use a fiscal period in lieu of a
calendar period;
27. "Tax remitter" means any person required to collect,
report, or remit the tax imposed by the Oklahoma Sales Tax Code. A
tax remitter who fails, for any reason, to collect, report, or remit
the tax shall be considered a taxpayer for purposes of assessment,
collection, and enforcement of the tax imposed by the Oklahoma Sales
Tax Code; and
28. "Vendor" means:
a. any person making sales o f tangible personal property
or services in this state, the gross receipts or gross
proceeds from which are taxed by the Oklah oma Sales
Tax Code,
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b. any person maintaining a place of business in th is
state and making sales of tangible personal property
or services, whether at the place of busin ess or
elsewhere, to persons within this state, the gross
receipts or gross proceeds fr om which are taxed by the
Oklahoma Sales Tax Code,
c. any person who solicits business by employees,
independent contractors, agen ts, or other
representatives in this st ate, and thereby makes sales
to persons within this state of tangible personal
property or services, the gross receipts or gross
proceeds from which are taxed by the Oklahoma Sales
Tax Code, or
d. any person, pursuant to an agreement with the person
with an ownership interest in or title to tangible
personal property, who has been entrusted with the
possession of any such property and has the power to
designate who is to obtain title, to physically
transfer possession of, or otherwise make sales of the
property.
SECTION 2. AMENDATORY 68 O.S. 2021, Section 1359, is
amended to read as follows:
Section 1359. Exemptions - Manufacturing.
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There are hereby specifically exempted from the tax levied by
Section 1350 et seq. of this title:
1. Sales of goods, wares, merchandise, tangible personal
property, machinery and equipm ent to a manufacturer for use in a
manufacturing operation. The sales for use in a manufacturing
operation shall be exempt for any manufacturer engaged in
manufacturing as defined in paragraph 14 of Section 1352 of this
title. Goods, wares, merchandise, property, machinery and equipment
used in a nonmanufacturing activity or process as set forth in
paragraph 14 of Section 1352 of th is title shall not be eligible for
the exemption provided for in this subsection by virtue of the
activity or process being p erformed in conjunction with or
integrated into a manufacturing operatio n.
For the purposes of this paragraph, sales made to any pe rson,
firm or entity that has entered into a contractual relationship for
the construction and improvement of manufacturing g oods, wares,
merchandise, property, machinery and equipment for use in a
manufacturing operation shall be considered sales made to a
manufacturer which is defined or cla ssified in the North American
Industry Classification System (NAICS) Manual under Indus try Group
No. 324110. Such purchase shall be evidenced by a copy of the sales
ticket or invoice to be retained by the vendor indic ating that the
purchases are made for and on behalf of such manufacturer and set
out the name of such manufacturer as well as include a copy of the
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Manufacturing Exemption Permit of the manufacture r. Any person who
wrongfully or erroneously certifies that purchases are being made on
behalf of such manufacturer or who otherwise violates this paragraph
shall be guilty of a misdem eanor and upon conviction thereof shall
be fined an amount equal to doub le the amount of sales tax involved
or incarcerated for not more than sixty (60) days or both;
2. Ethyl alcohol when sold and used for the purpose of blending
same with motor fuel on which motor fuel tax is levied by Section
500.4 of this title;
3. Sales of containers when sold to a person regularly engaged
in the business of reselling empty or fill ed containers or when
purchased for the purpose of packaging raw products of farm, gard en,
or orchard for resale to the consumer or processor. This exemption
shall not apply to the sale of any containers used more tha n once
and which are ordinarily known as returnable containers, except
returnable soft drink bottles and the cartons, crates, pallets, and
containers used to transport returnable soft drink bottles . Each
and every transfer of title or possession of such r eturnable
containers in this state to any person who is not regularly engaged
in the business of selling, reselling or otherw ise transferring
empty or filled containers shall be taxable under this Code.
Additionally, this exemption shall not apply to the sale of labels
or other materials deli vered along with items sold but which are not
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necessary or absolutely essential to the sale of the sold
merchandise;
4. Sales of or transfers of title to or p ossession of any
containers, after June 30, 1987, used or t o be used more than once
and which are ordinarily known as returnable containers and which do
or will contain beverages defin ed by paragraphs 4 and 14 of Section
506 of Title 37 of the Oklahoma Sta tutes, or water for human
consumption and the cartons, crat es, pallets, and containers used to
transport such returnable containers;
5. Sale of tangible personal property when sold by the
manufacturer to a person who transports it to a state other than
Oklahoma for immediate and exclusive use in a state other tha n
Oklahoma. Provided, no sales at a r etail outlet shall qualify for
the exemption under this paragraph;
6. Machinery, equip ment, fuels and chemicals or other materials
incorporated into and direc tly used or consumed in the process of
treatment to substan tially reduce the volume or harmful pr operties
of hazardous waste at treatment facilities specifically permitted
pursuant to the Oklahoma Hazardous Waste Management Act and operated
at the place of waste generation, or facilities approved by the
Department of Environmental Quality for the clea nup of a site of
contamination. The term "hazardous" waste may include low -level
radioactive waste for the purpose of this paragraph;
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7. Except as otherwise provided by subsection I of Section 3658
of this title pursuant to which the exemption authorized by this
paragraph may not be claimed, sales of tangible personal property to
a qualified manufacturer or distributor to be consumed or
incorporated in a new m anufacturing or distribution facility or to
expand an existing manufacturing or distribution faci lity. For
purposes of this paragraph, sales made to a contractor or
subcontractor that has previously entered into a contractual
relationship with a qualified manufacturer or distributor for
construction or expansion of a manufacturing or distribution
facility shall be considered sales made to a qualified manufacturer
or distributor. For t he purposes of this paragraph, "qualified
manufacturer or distributor " means:
a. any manufacturing enterprise whose total cost of
construction of a new or expanded facil ity exceeds the
sum of Five Million Dollars ($5,000,000.00) and in
which at least one h undred (100) new full -time-
equivalent employees, as certified by the Okl ahoma
Employment Security Commission, are added and
maintained for a period of at least thirty -six (36)
months as a direct result of the new or expanded
facility,
b. any manufacturing enterprise whose total cost of
construction of a new or expanded facilit y exceeds the
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sum of Ten Million Dollars ($10,000,000.00) a nd the
combined cost of construction m aterial, machinery,
equipment and other tangible personal property exempt
from sales tax under the provisions of this paragraph
exceeds the sum of Fifty Millio n Dollars
($50,000,000.00) and in which at least seventy -five
(75) new full-time-equivalent employees, as certified
by the Oklahoma Employment Security Commission, are
added and maintained for a period of at least thirty -
six (36) months as a direct result of the new or
expanded facility,
c. any manufacturing enter prise whose total cost of
construction of an expanded facility exceeds the sum
of Three Hundred Million Dollars ($300,000,000 .00) and
in which the manufacturer has and maintains an average
employment level of at least one thousand seven
hundred fifty (1,750) full-time-equivalent employees,
as certified by the Employment Security Commission, or
d. any enterprise primarily engaged in the general
wholesale distribution of groceries defined or
classified in the North American Industry
Classification System (NAI CS) Manual under Industry
Groups No. 4244 and 4245 and which has at least
seventy-five percent (75%) of its total sales to in -
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state customers or buyers and whose total cost of
construction of a new or expanded facility exceeds the
sum of Forty Million Doll ars ($40,000,000.00) with
such construction commencing on or after July 1, 2005,
and before December 31, 2005, and which at l east fifty
new full-time-equivalent employees, as certified by
the Oklahoma Employment Security Commission, are added
and maintained for a period of at least thirty -six
(36) months as a direct result of the new or expanded
facility.
For purposes of this pa ragraph, the total cost of construction
shall include building and const ruction material and engineering and
architectural fees or charges directly associated with the
construction of a new or expanded facility. The total cost of
construction shall not in clude attorney fees. For purposes of
subparagraph c of this paragraph, the total cost of construction
shall also include the cost of qualified depreciable property as
defined in Section 2357.4 of this title and labor services performed
in the construction of an expanded facility. For the purpose of
subparagraph d of this par agraph, the total cost of construction
shall also include t he cost of all parking, security and d ock
structures or facilities necessary to manage, process or secure
vehicles used to receive and/or distribute groceries through such a
facility. The employme nt requirement of this paragraph can be
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satisfied by the employment of a portion of the required number of
new full-time-equivalent employees at a manufacturing or
distribution facilit y that is related to or supported by the new or
expanded manufacturing o r distribution facility as long as both
facilities are owned by one person or business entity. F or purposes
of this section, "manufacturing facility" shall mean building and
land improvements used in manufacturing as defined in Section 1352
of this title and shall also mean building and land improvements
used for the purpose of packing, repackaging, labeling or assembling
for distribution to market, products at least seventy percent (7 0%)
of which are made in Oklahoma by the same company but at an off -
site, in-state manufacturing or distribution facility or facili ties.
It shall not include a retail o utlet unless the retail outlet is
operated in conjunction with and on the same site or premises as the
manufacturing facility. Up to ten percent (10%) of the square feet
of a manufacturing or distribution facility bui lding may be devoted
to office space used to provide clerical support for the
manufacturing operation. Such ten percent (10% ) may be in a
separate building as long as it is part of the same contig uous tract
of property on which the manufacturing or distri bution facility is
located. Only sales of tangible personal property made after June
1, 1988, shall be eligible for the exem ption provided by this
paragraph. The exemption authorized pursuant to subparagraph d of
this paragraph shall only become effectiv e when the governing body
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of the municipality in which the enterprise is located approves a
resolution expressing the municip ality’s support for the
construction for such new or expanded facility. Upon approval by
the municipality, the municipality shall forward a copy of such
resolution to the Oklahoma Tax Commission;
8. Sales of tangible personal property purchased and used by a
licensed radio or television station in broadcasting. This
exemption shall not apply unless such machinery and equipment is
used directly in the manufacturing proc ess, is necessary for the
proper production of a broadcast signal or is such that the f ailure
of the machinery or equipment to operate would cause broadcasting to
cease. This exemption begins with the equipment used i n producing
live programming or the el ectronic equipment directly behind the
satellite receiving dish or antenna, and ends wi th the transmission
of the broadcast signal from the broadcast antenna s ystem. For
purposes of this paragraph, "proper production" shall include, but
not be limited to, machinery or equipment required by Federal
Communications Commission rules and regulat ions;
9. Sales of tangible personal property purchased or used by a
licensed cable television operator in cablecasting. This exem ption
shall not apply unless such mach inery and equipment is used directly
in the manufacturing process, is necessary for the proper production
of a cablecast signal or is such that the failure of the machinery
or equipment to operate would cause cablecast ing to cease. This
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exemption begins with the equipment used in producing local
programming or the electronic equipment behin d the satellite
receiving dish, microwave tower or antenna, and ends wit h the
transmission of the signal from the cablecast head -end system. For
purposes of this paragr aph, "proper production" shall include, but
not be limited to, machinery or equipment r equired by Federal
Communications Commission rules and regulations;
10. Sales of packaging materials for use in packing, shipping
or delivering tangible personal proper ty for sale when sold to a
producer of agricultural products. This exemption shall not apply
to the sale of any packaging material which is ordinarily known a s a
returnable container;
11. Sales of any pattern used in the process of manufacturing
iron, steel or other metal castings. The exemption provided by this
paragraph shall be applica ble irrespective of ownership of the
pattern provided that such pattern is used in the commercial
production of metal castings;
12. Deposits or other charges made and w hich are subsequently
refunded for returnable cartons, crates, pallets, and containers
used to transport cement and cement products;
13. Beginning January 1, 1998, machinery, electricity, fuels,
explosives and materia ls, excluding chemicals, used in the m ining of
coal in this state;
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14. Deposits, rent or other charges made for returnable
cartons, crates, pallets, and containers used to transport mushrooms
or mushroom products from a farm for resal e to the consumer or
processor;
15. Sales of tangible pers onal property and services used or
consumed in all phases of the extraction and manufac turing of
crushed stone and sand, including but not limited to site
preparation, dredging, overburden removal, explosive placement and
detonation, onsite material haulin g and/or transfer, material
washing, screening and/or crushing, product weighing and si te
reclamation; and
16. Sale, use or consumption of paper stock and oth er raw
materials which are manufactured into commercial pri nted material in
this state primarily for use and delivery outside this state. For
the purposes of this section, "commercial printed material" shall
include magazines, catalogs, retail inserts and direct mail.
SECTION 3. This act shall be come effective November 1, 2023.
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Passed the House of Representatives the 14th day of March, 2023.
Presiding Officer of the House
of Representatives
Passed the Senate the ___ day of __________, 2023.
Presiding Officer of the Senate