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HOUSE OF REPRESENTATIVES - FLOOR VERSION
STATE OF OKLAHOMA
1st Session of the 59th Legislature (2023)
COMMITTEE SUBSTITUTE
FOR ENGROSSED
SENATE BILL NO. 406 By: Rader of the Senate
and
Boatman and Blancett of the
House
COMMITTEE SUBSTITUTE
[ sales tax - exemptions - effective date ]
BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
SECTION 1. AMENDATORY 68 O.S. 2021, Section 1 356, as
last amended by Section 1, Chapter 394, O.S.L. 2022 (68 O.S. Supp.
2022, Section 1356), is amended to read as follows:
Section 1356. Exemptions - Governmental and nonp rofit entities.
There are hereby specif ically exempted from the tax levied by
Section 1350 et seq. of this title:
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1. Sale of tangible personal property or services to the United
States government or to the State of Oklahoma this state, any
political subdivision of this state, or any agency of a political
subdivision of this state; provided, all sales to contractors in
connection with the performance of any contract with the United
States government, State of Oklahoma this state, or any of its
political subdivisions shall not be exempted from th e tax levied by
Section 1350 et seq. of this title, except as hereinafter provided;
2. Sales of property to agents appointed by or under contract
with agencies or instrumental ities of the United States government
if ownership and possession of such proper ty transfers immediately
to the United States government;
3. Sales of property to agents appointed by or under contract
with a political subdivision of this state if the sale of such
property is associated with the development of a qualified federal
facility, as provided in the Oklahoma Federal Facilities Development
Act, and if ownership and possession of such property transfers
immediately to the political subdivision or the state;
4. Sales made directly by county , district, or state fair
authorities of this state, upon the premises of the fair authority,
for the sole benefit of the fair authority or sales of admission
tickets to such fairs or fair events at any location in t he state
authorized by county, district , or state fair authorities; provided,
the exemption provided by this paragraph for admission tickets to
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fair events shall apply only to any portion of the admission price
that is retained by or distributed to the fai r authority. As used
in this paragraph, "fair event" shall be limited to an eve nt held on
the premises of the fair authority in conjunction with and during
the time period of a county, district, or state fair;
5. Sale of food in cafeterias or lunchrooms of elementary
schools, high schools, coll eges, or universities which are operate d
primarily for teachers and pupils and are not operated primarily for
the public or for profit;
6. Dues paid to fraternal, religious, civic, charitable, or
educational societies or organizations by regular members t hereof,
provided, such societies or org anizations operate under what is
commonly termed the lodge plan or system, and provided such
societies or organizations do not operate for a profit which inures
to the benefit of any individual member or members there of to the
exclusion of other members an d dues paid monthly or annually to
privately owned scientific and educational libraries by members
sharing the use of services rendered by such libraries with students
interested in the study of geology, petroleum eng ineering, or
related subjects;
7. Sale of tangible personal property or services to or by
churches, except sales made in the course of business for profit or
savings, competing with other persons engaged in the sam e, or a
similar business or sale of tangi ble personal property or services
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by an organization exempt from federal income tax pursuant to
Section 501(c)(3) of the Internal Revenue Code of 1986, as amended,
made on behalf of or at the request of a church or churches if the
sale of such property is conducted not more than once each calen dar
year for a period not to exceed three (3) days by the organization
and proceeds from the sale of such property are used by the church
or churches or by the organization for charitable purposes;
8. The amount of proceeds received from the sale of admis sion
tickets which is separately stated on the ticket of admission for
the repayment of money borrowed by any accredited state-supported
college or university or any public tru st of which a county in this
state is the beneficiary, for the purpose of constr ucting or
enlarging any facility to be used for the staging of an athletic
event, a theatrical production, or any other form of entertainment,
edification, or cultural cultivat ion to which entry is gained with a
paid admission ticket. Such facilities incl ude, but are not limited
to, athletic fields, athletic stadiums, field houses, amphitheaters,
and theaters. To be eligible for this sales tax exemption, the
amount separately stated on the admission ticket shall be a
surcharge which is imposed, collected , and used for the sole purpose
of servicing or aiding in the servicing of debt incurred by the
college or university to effect the capital improvements
hereinbefore described;
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9. Sales of tangible personal property or services to the
council organizations or similar state supervisory organizations of
the Boy Scouts of America, Girl Scouts of the U.S.A., and Camp Fire
USA;
10. Sale of tangible personal propert y or services to any
county, municipality, rural water district, public school district,
city-county library system, the institutions of The Oklahoma State
System of Higher Education, the Grand River Dam Authority, the
Northeast Oklahoma Public Facilities Authority, the Oklahoma
Municipal Power Authority, City of Tul sa-Rogers County Port
Authority, Muskogee City-County Port Authority, the Oklahoma
Department of Veterans Affairs, the Broken Bow Economic Development
Authority, Ardmore Development Authority, D urant Industrial
Authority, Oklahoma Ordnance Works Authority, Central Oklahoma
Master Conservancy District, Arbuckle Master Conservancy District,
Fort Cobb Master Conservancy District, Foss Reservoir Master
Conservancy District, Mountain Park Master Conse rvancy District,
Waurika Lake Master Conservancy District and the Office of
Management and Enterpr ise Services only when carrying out a public
construction contract on behalf of the Oklahoma Department of
Veterans Affairs, and effective July 1, 2022, the Uni versity
Hospitals Trust, or to any person with whom any of the above-named
subdivisions or agenc ies of this state has duly entered into a
public contract pursuant to law, necessary for carrying out such
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public contract or to any subcontractor to such a pub lic contract.
Any person making purchases on behalf of such su bdivision or agency
of this state shall certify, in writing, on the copy of the invoice
or sales ticket to be retained by the vendor that the purchases are
made for and on behalf of such subdiv ision or agency of this state
and set out the name of such publ ic subdivision or agency . Any
person who wrongfully or erroneously certifies that purchases are
for any of the above-named subdivisions or agencies of this state or
who otherwise violates this section shall be guilty of a misdemeanor
and upon conviction t hereof shall be fined an amount e qual to double
the amount of sales tax involved or incarcerated for not more than
sixty (60) days or both;
11. Sales of tangible personal property or services to private
institutions of higher education and private element ary and
secondary institutions of education accredited by the State
Department of Education or registered by the State Board of
Education for purposes of participating in federal programs or
accredited as defined by the Oklahoma State Regents for Higher
Education which are exempt from tax ation pursuant to the provisions
of the Internal Revenue Code, 26 U.S.C., Section 501(c)(3) including
materials, supplies, and equipment used in the construction and
improvement of buildings and other structures owned by th e
institutions and operated for e ducational purposes.
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Any person, firm, agency, or entity making purchases on behalf
of any institution, agency, or subdivision in this state, shall
certify in writing, on the copy of the invoice or sales ticket the
nature of the purchases, and violation of this paragraph shall be a
misdemeanor as set forth in paragraph 10 of this section;
12. Tuition and educational fees paid to private institutions
of higher education and private elementary and secondary
institutions of education accredited by the State D epartment of
Education or registered by the State Board of Education for purposes
of participating in federal programs or accredited as defined by the
Oklahoma State Regents for Higher Education which are exempt from
taxation pursuant to the provisions of the Internal Revenue Code, 26
U.S.C., Section 501(c)(3);
13. a. Sales of tangible personal property made by:
(1) a public school,
(2) a private school offering ins truction for grade
levels kindergarten through twelfth grade ,
(3) a public school district,
(4) a public or private school board,
(5) a public or private school student group or
organization,
(6) a parent-teacher association or organization
other than as specified in subparagraph b of this
paragraph, or
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(7) public or private school personnel for p urposes
of raising funds for the benefit of a public or
private school, public school district, public or
private school board, or public or private school
student group or organization, or
b. Sales of tangible personal pro perty made by or to
nonprofit parent-teacher associations or organizations
exempt from taxation pursuant to the provisions of the
Internal Revenue Code, 26 U.S.C., Section 501(c)(3),
nonprofit local public or private school foundations
which solicit money or property in the name of any
public or private school or public school district.
The exemption provided by this paragraph for sales made by a
public or private school shall be limited to those pu blic or private
schools accredited by the State Department of Education or
registered by the State Board of Education for purposes of
participating in federal programs. Sale of tangible personal
property in this paragraph shall include sale of admission t ickets
and concessions at athletic events;
14. Sales of tangible personal property by:
a. local 4-H clubs,
b. county, regional, or state 4-H councils,
c. county, regional, or state 4-H committees,
d. 4-H leader associations,
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e. county, regional, or state 4-H foundations, and
f. authorized 4-H camps and training c enters.
The exemption provided by this paragraph shall be limited to
sales for the purpose of raising funds for the benefit of such
organizations. Sale of tangible personal property exempted by this
paragraph shall include sale of admission tickets;
15. The first Seventy-five Thousand Dollars ($75,000.00) each
year from sale of tickets and concessions at athletic eve nts by each
organization exempt from taxation pursuant to the provisions of the
Internal Revenue Code, 26 U.S.C., Section 501(c)(4);
16. Sales of tangible personal property or services to any
person with whom the Oklahoma Tourism and Recreation Department has
entered into a public contract and which is necessary for carrying
out such contract to assist the Department in the development and
production of advertising, promotion , publicity, and public
relations programs;
17. Sales of tangible personal proper ty or services to fire
departments organized pursuant to Section 592 of Title 18 of th e
Oklahoma Statutes which items are to be used for the purposes of the
fire department. Any person making purchases on behalf of any such
fire department shall certify, in writing, on the copy of the
invoice or sales ticket to be retained by the vendor th at the
purchases are made for and on behalf of such fir e department and set
out the name of such fire department. Any person who wrongfully or
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erroneously certifies that the purchases are for any such fire
department or who otherwise violates the provisio ns of this section
shall be deemed guilty of a misdemea nor and upon conviction thereof,
shall be fined an amount equal to double the amount of sales tax
involved or incarcerated for not more than sixty (60) days, or both;
18. Complimentary or free tickets for admission to places of
amusement, sports, entertai nment, exhibition, display, or other
recreational events or activities which are issued through a box
office or other entity which is operated by a state institution of
higher education with institution al employees or by a municipality
with municipal emplo yees;
19. The first Fifteen Thou sand Dollars ($15,000.00) each year
from sales of tangible personal property by fi re departments
organized pursuant to Titles 11, 18, or 19 of the Oklahoma Statutes
for the purposes of raising funds for the benefit of the f ire
department. Fire departments selling tangible personal property for
the purposes of raising funds shall be lim ited to no more than six
(6) days each year to raise such funds in order to receive the
exemption granted by this paragraph;
20. Sales of tangible personal property or servi ces to any Boys
& Girls Clubs of America affiliate in this state which is not
affiliated with the Salvation Army and which is exempt from taxation
pursuant to the provis ions of the Internal Revenue Code, 26 U.S.C.,
Section 501(c)(3);
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21. Sales of tangible personal property or services to any
organization, which takes court-adjudicated juveniles for purposes
of rehabilitation, and which is exempt from taxation pursuant to the
provisions of the Internal Revenue Code, 26 U.S.C ., Section
501(c)(3), provided th at at least fifty percent (50%) of the
juveniles served by such organization are c ourt adjudicated and the
organization receives state funds in an amount less than ten p ercent
(10%) of the annual budget of the organization;
22. Sales of tangible personal property or services to:
a. any health center as defined in Section 254b of Title
42 of the United States Code,
b. any clinic receiving disbursements of state monies
from the Indigent Health Care Revolving Fund pursuant
to the provisions of Section 66 of T itle 56 of the
Oklahoma Statutes,
c. any community-based health center which meets all of
the following criteria:
(1) provides primary care services at no cost to the
recipient, and
(2) is exempt from taxation pursuant to t he
provisions of Section 501(c)(3 ) of the Internal
Revenue Code, 26 U.S.C., Section 501(c)(3), and
d. any community mental health center as defined in
Section 3-302 of Title 43A of the Oklahoma Statutes ;
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23. Dues or fees including free or complimentary du es or fees
which have a value equ ivalent to the charge that could have
otherwise been made, to YMCAs, YWCAs, or municipally-owned
recreation centers for the use of facilities and programs;
24. The first Fifteen Thousand Dollars ($15,000.00) each year
from sales of tangible personal prope rty or services to or by a
cultural organization established to sponsor and promot e
educational, charitable, and cultural events for disadvantaged
children, and which orga nization is exempt from taxation pursuant to
the provisions of the Internal Revenue C ode, 26 U.S.C., Section
501(c)(3);
25. Sales of tangible personal property or ser vices to museums
or other entities which have been accredited by the American
Association Alliance of Museums. Any person making purchases o n
behalf of any such museum or other entity shall certify, in writing,
on the copy of the invoice or sales ticket to be reta ined by the
vendor that the purchases are made for and on behalf of such museum
or other entity and set out the name of such museum or other entity.
Any person who wrongfully or erroneously certifies that the
purchases are for any such museum or other ent ity or who otherwise
violates the provisions of this paragraph shall be deemed guilty of
a misdemeanor and, upon conviction thereof, shall be fined an amount
equal to double the amount of sales tax involved or incarcerated for
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not more than sixty (60) days , or by both such fine and
incarceration;
26. Sales of tickets for admission by any museum accredited by
the American Association Alliance of Museums. In order to be
eligible for the exemption provided by this paragraph, an amount
equivalent to the amount of the tax which would otherwise be
required to be collected pursuant to the provis ions of Section 1350
et seq. of this title shal l be separately stated o n the admission
ticket and shall be collected and used for the sole purpose of
servicing or aiding in th e servicing of debt incurred by the museum
to effect the construction, enlarging , or renovation of any facility
to be used for entertainment, edification , or cultural cultivation
to which entry is gained with a paid admission ticket;
27. Sales of tangible personal property or services occurring
on or after June 1, 1995, to children 's homes which are supported or
sponsored by one or more churches, members of which serve as
trustees of the home;
28. Sales of tangible personal property or services to the
organization known as the Disabled American Veterans, Department of
Oklahoma, Inc., and subordinate chapters thereof;
29. Sales of tangible personal proper ty or services to youth
camps which are supported or sponsored by one or more churches,
members of which serve as trustees of the organization;
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30. a. Until July 1, 2022, transfer of tangible personal
property made pursuant to Sect ion 3226 of Title 63 of
the Oklahoma Statutes by the University Hospitals
Trust, and
b. Effective July 1, 2022, transfer of tang ible personal
property or services to or by:
(1) the University Hospitals Trust created pursuant
to Section 3224 of Title 63 of the Oklahoma
Statutes, or
(2) nonprofit entities which are exempt from taxation
pursuant to the provisions of the Internal
Revenue Code of the United States, 26 U.S.C.,
Section 501(c)(3), which have entered into a
joint operating agreement with the Unive rsity
Hospitals Trust;
31. Sales of tangible personal property or services to a
municipality, county, or school district pursua nt to a lease or
lease-purchase agreement executed between the vendor and a
municipality, county, or school district. A copy of the lease or
lease-purchase agreement shall be retained by the vendor;
32. Sales of tangible personal property or services to any
spaceport user, as defined in the Oklahoma Space Industry
Development Act;
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33. The sale, use, storage, consumption , or distribution in
this state, whether by the importer, exporter, or another person, of
any satellite or any associated launch vehicle including components
of, and parts and motors for, any such satellite or launch v ehicle,
imported or caused to be imported into this state for the purpos e of
export by means of launching into space. This exemption provided by
this paragraph shall not be a ffected by:
a. the destruction in whole or in part of the satellite
or launch vehicle,
b. the failure of a launch to occur or be successful, or
c. the absence of any transfer or title to, or possession
of, the satellite or launch vehicle after launch;
34. The sale, lease, use, storage, consumption, or distribution
in this state of any space facility, space propulsion system or
space vehicle, satellite, or station of any kind possessing space
flight capacity including components thereof;
35. The sale, lease, use, storage, consumption, or distribution
in this state of tangible personal property, placed on or used
aboard any space facility, space propulsion system or space vehicle,
satellite, or station possessing space flight capacity, which is
launched into space, irrespective of whether such tangible property
is returned to this state for subsequent use, storage, or
consumption in any manner;
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36. The sale, lease, use, storage, consumption, or distribution
in this state of tangible personal property meeting the definition
of "section 38 property" as defined in Sections 48(a)(1)(A) and
(B)(i) of the Internal Revenue Code of 1986, tha t is an integral
part of and used primarily in support of space flight; however,
section 38 property used in support of space fl ight shall not
include general office equipment, any boat, mobile home, motor
vehicle, or other vehicle of a class or type requi red to be
registered, licensed, titled, or documented in this state or by the
United States government, or any other property no t specifically
suited to supporting space activity. The term "in support of space
flight", for purposes of this paragraph, mean s the altering,
monitoring, controlling, regulating, adjusting, servicing, or
repairing of any space facility, space propulsion systems or space
vehicle, satellite, or station possessing space flight capacity
including the components thereof;
37. The purchase or lease of machinery and equipment for use at
a fixed location in this state, which is used exclusively in the
manufacturing, processing, compounding, or producing of any space
facility, space propulsion system or space vehicle, satellite, or
station of any kind possessing sp ace flight capacity. Provided, the
exemption provided for in this paragraph shall not be allowed unle ss
the purchaser or lessee signs an affidavit stating that the item or
items to be exempted are for the exclusive use designated herein.
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Any person furnishing a false affidavit to the vendor for the
purpose of evading payment of any tax imposed by Section 1354 of
this title shall be subject to the penalties provided by law . As
used in this paragraph, "machinery and equipment" means "section 38
property" as defined in Sections 48(a)(1)(A) and (B)(i) of the
Internal Revenue Code of 1986, which is used as an integral part of
the manufacturing, processing, compounding, or producing of items of
tangible personal property. Such term includes parts and
accessories only to the extent that the exemption thereof is
consistent with the provisions of this paragraph;
38. The amount of a surcharge or any other amount which is
separately stated on an admission ticket which is imposed,
collected, and used for the sole pur pose of constructing,
remodeling, or enlarging facilities of a public trust having a
municipality or county as its sole beneficiary;
39. Sales of tangible personal property or servi ces which are
directly used in or for the benefit of a state park in this state,
which are made to an organization which is exempt from taxation
pursuant to the provisions of the Internal Revenue Code, 26 U.S.C.,
Section 501(c)(3) and which is organized pr imarily for the purpose
of supporting one or more state parks located in t his state;
40. The sale, lease, or use of parking privileges by an
institution of The Oklahoma State System of Higher Education;
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41. Sales of tangible personal property or services for use on
campus or school construction projects for the benefit of
institutions of The Oklahoma State System of Higher Education,
private institutions of higher education a ccredited by the Oklahoma
State Regents for Higher Education, or any public school or school
district when such projects are financed by or through the use of
nonprofit entities which are exempt from taxation pursuant to the
provisions of the Internal Reve nue Code, 26 U.S.C., Section
501(c)(3);
42. Sales of tangible personal property or services by an
organization which is exempt from taxation pursuant to t he
provisions of the Internal Revenue Code, 26 U.S.C., Section
501(c)(3), in the course of conducting a national championship
sports event, but only if all or a portion of the paymen t in
exchange therefor would qualify as the receipt of a qualified
sponsorship payment described in Internal Revenue Code, 26 U.S.C.,
Section 513(i). Sales exempted pursuant to this paragraph shall be
exempt from all Oklahoma sales, use, excise , and gross receipts
taxes;
43. Sales of tangible personal property or services to o r by an
organization which:
a. is exempt from taxation pursuant to the provisions of
the Internal Revenue Code, 26 U.S.C., Section
501(c)(3),
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b. is affiliated with a comprehensive un iversity within
The Oklahoma State System of Higher Education, and
c. has been organized primarily for the purpose of
providing education and teacher training and
conducting events relating to robotics;
44. The first Fifteen Thousand Dollars ($15,000.00) each year
from sales of tangible personal property to or by youth athletic
teams which are part of an athletic organization exempt from
taxation pursuant to the provisions of the Internal Revenue Code, 26
U.S.C., Section 501(c)(4), for the purposes of rais ing funds for the
benefit of the team;
45. Sales of tickets for admission to a collegiate athletic
event that is held in a facility owned or operated by a municipality
or a public trust of which the municipality is the sole beneficiary
and that actually determines or is part of a tourname nt or
tournament process for determining a conference tournament
championship, a conference championship, or a national championship;
46. Sales of tangible personal property or services to or by an
organization which is e xempt from taxation pursuant to th e
provisions of the Internal Revenue Cod e, 26 U.S.C., Section
501(c)(3) and is operating the Oklahoma City National Memorial and
Museum, an affiliate of the National Park System;
47. Sales of tangible personal property or services to
organizations which a re exempt from federal taxation pursuant to the
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provisions of Section 501(c)(3) of the Internal Revenue Code, 26
U.S.C., Section 501(c)(3), t he memberships of which are limited to
honorably discharged veterans, and which f urnish financial support
to area veterans' organizations to be used for th e purpose of
constructing a memorial or museum;
48. Sales of tangible personal property or services on or after
January 1, 2003, to an organization which is exempt from taxation
pursuant to the provisions of the Int ernal Revenue Code, 26 U.S.C.,
Section 501(c)(3) that is expending monies received from a private
foundation grant in conjunction with expend itures of local sales tax
revenue to construct a local public library;
49. Sales of tangible personal property or services to a state
that borders this st ate or any political subdivision of that state,
but only to the extent that the other state or politi cal subdivision
exempts or does not impose a tax on similar sales of items to thi s
state or a political subdivision of this state;
50. Effective July 1, 2005, sales of tangible personal property
or services to the Career Technology Student Organizations u nder the
direction and supervision of the Oklahoma Department of Career and
Technology Education;
51. Sales of tangible personal property to a public trus t
having either a single city, town or county or multiple cities,
towns or counties, or combination thereof as beneficiary or
beneficiaries or a nonprofit organization which is exemp t from
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taxation pursuant to the pro visions of the Internal Revenue Code, 2 6
U.S.C., Section 501(c)(3) for the purpose of constructing
improvements to or expanding a hospital o r nursing home owned and
operated by any such public trust or nonprofit entity pr ior to July
1, 2008, in counties wi th a population of less than one hundre d
thousand (100,000) persons, according to the most recent Federal
Decennial Census. As used in this paragraph, "constructing
improvements to or expanding" shall not mean any expens e for routine
maintenance or genera l repairs and shall require a project c ost of
at least One Hundred Thousand Dollars ($100,000.00). For purposes
of this paragraph, sales ma de to a contractor or subcontractor that
enters into a contractual relationship w ith a public trust or
nonprofit entity as described by this paragraph shal l be considered
sales made to the public trust or nonprofit entity. The exemption
authorized by this paragraph shall be administered in the form of a
refund from the sales tax reven ues apportioned pursuant to Section
1353 of this title and the vendor shal l be required to collect the
sales tax otherwise applicable to the transaction. The purchaser
may apply for a refund of the sales tax paid in the manner
prescribed by this paragraph . Within thirty (30) days after th e end
of each fiscal year, any purchase r that is entitled to make
application for a refund based upon the exempt treatment authorized
by this paragraph may file an application for refund of the sales
taxes paid during suc h preceding fiscal year. The Tax Commission
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shall prescribe a form for pu rposes of making the application for
refund. The Tax Commission shall determine whether or not the t otal
amount of sales tax exemptions claimed by all purchasers is equal to
or less than Six Hundred Fifty Thousand Do llars ($650,000.00). If
such claims are less than or equal to that amount, the Tax
Commission shall make refunds to the purchasers in the f ull amount
of the documented and verified sales tax amounts. If such claims by
all purchasers are in excess of Six Hundred Fifty Thousand Dollars
($650,000.00), the Tax Commission shall determine the amount of each
purchaser's claim, the total amount of a ll claims by all purchasers,
and the percentage each purchaser's claim amount bears to the total.
The resulting percentage determined for each purchaser s hall be
multiplied by Six Hundred Fifty Thousand Dollars ($650,000.00) to
determine the amount of ref undable sales tax to be paid to each
purchaser. The pro rata refund amount shall be the only method to
recover sales taxes paid during the preceding fisca l year and no
balance of any sales taxes paid on a pro rata basis shall be the
subject of any subsequ ent refund claim pursuant to this paragraph;
52. Effective July 1, 2006, sales o f tangible personal property
or services to any organization which assists , trains, educates, and
provides housing for physically and mentally handicapped persons and
which is exempt from taxation pursuant to the provisions of the
Internal Revenue Code, 26 U.S.C., Section 501(c)(3) and that
receives at least eighty-five percent (85%) of its annual budget
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from state or federal funds. In order to receive the benefit of the
exemption authorized by this paragraph, the taxpayer shall be
required to make payment of the applicable sales tax at the time of
sale to the vendor in the mann er otherwise required by law.
Notwithstanding any other provision of the Oklahoma Uniform Tax
Procedure Code to the contrary, the taxpayer shall be authorized to
file a claim for refund of sales taxes paid that quali fy for the
exemption authorized by this paragraph for a period of one (1) year
after the date of the sale transaction. The taxpayer shall b e
required to provide documentation as may be prescribed by the
Oklahoma Tax Commission in support of the refund cla im. The total
amount of sales tax qual ifying for exempt treatment pursuant to this
paragraph shall not exceed One Hundred Seventy -five Thousand Dollars
($175,000.00) each fiscal year. Claims for refund shall be
processed in the order in which such claims are received by the
Oklahoma Tax Commission. If a claim otherwise timely filed exceeds
the total amount of refunds payable for a fiscal ye ar, such claim
shall be barred;
53. The first Two Thousand Dollars ($2,000.00) e ach year of
sales of tangible perso nal property or services to, by, or for the
benefit of a qualified neighborhood watch organization that is
endorsed or supported by or worki ng directly with a law enforcement
agency with jurisdiction in the area in which the neighborhood watch
organization is located. As used in this paragraph , "qualified
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neighborhood watch organization" means an organization that is a
not-for-profit corporation under the laws of the State of Oklahoma
this state that was created to help p revent criminal activity in an
area through community involvement and inte raction with local law
enforcement and which is one of the first two thousand organizations
which makes application to the Oklahoma Tax Commission for the
exemption after March 29, 2 006;
54. Sales of tangible personal property to a nonprofit
organization, exempt from taxation pursuant to the provisions of the
Internal Revenue Code, 26 U.S.C., Section 501 (c)(3), organized
primarily for the purpose of providing services to homeless per sons
during the day and located in a metropoli tan area with a population
in excess of five hundred thousand (500,000) persons according to
the latest Federal Decennial Census . The exemption authorized by
this paragraph shall be applicable to sales of tang ible personal
property to a qualified entity o ccurring on or after January 1,
2005;
55. Sales of tangible personal property or services to or by an
organization which is exem pt from taxation pursuant to the
provisions of the Internal Revenue Code, 26 U.S. C., Section
501(c)(3) for events the principal purpose of which is to prov ide
funding for the preservation of wetlands and habitat for wild ducks;
56. Sales of tangible perso nal property or services to or by an
organization which is exempt from taxation p ursuant to the
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provisions of the Internal Reve nue Code, 26 U.S.C., Section
501(c)(3) for events the principal purpose of which is to provide
funding for the preservation and c onservation of wild turkeys;
57. Sales of tangible personal property or services to an
organization which:
a. is exempt from taxation pursuant to the prov isions of
the Internal Revenue Code, 26 U.S.C., Section
501(c)(3), and
b. is part of a network of com munity-based, autonomous
member organizations that meets the following
criteria:
(1) serves people with workplace disadvantages and
disabilities by providi ng job training and
employment services, as well as job placement
opportunities and post -employment support,
(2) has locations in the United States and at least
twenty other countrie s,
(3) collects donated clothing and household goods to
sell in retail stores and provides contract labor
services to business and government, and
(4) provides documentation t o the Oklahoma Tax
Commission that over seventy-five percent (75%)
of its revenues are channeled into employment,
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job training and placement programs, and other
critical community services;
58. Sales of tickets made on or after September 21, 2005, and
complimentary or free tickets for admission issued on or after
September 21, 2005, w hich have a value equivalent to the charge that
would have otherwise been made, for admission to a professional
athletic event in which a team in the National Basketball
Association is a participant, which is held in a facility owned or
operated by a municipality, a county, or a public trust of which a
municipality or a county i s the sole beneficiary, and sales of
tickets made on or after July 1, 2007, and complimentary or free
tickets for admission issued on or after July 1, 2007, which have a
value equivalent to the charge that would have otherwise be en made,
for admission to a professional athletic event in which a team in
the National Hockey League is a participant, which is held in a
facility owned or operated by a municipality, a county, or a public
trust of which a municipality or a county is the sole beneficiary;
59. Sales of tickets for admission and complimentary or free
tickets for admission which have a value equival ent to the charge
that would have otherwise been made to a professional sporting event
involving ice hockey, baseball, basketbal l, football or arena
football, or soccer. As used in this paragraph, "professional
sporting event" means an organized athletic competition between
teams that are members of an organized league or association with
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centralized management, other than a natio nal league or national
association, that imposes requirements for participation in the
league upon the teams, the individual ath letes, or both, and which
uses a salary structure to compensate the athletes;
60. Sales of tickets for admission to an annual e vent sponsored
by an educational and charitable organization of women which is
exempt from taxation pursuant to the provisions o f the Internal
Revenue Code, 26 U.S.C., Section 501(c)(3) and has as its mission
promoting volunteerism, developing the potentia l of women, and
improving the community through the effective action and leadership
of trained volunteers;
61. Sales of tangible personal property or services to an
organization, which is exempt from taxation pursuant to the
provisions of the Internal Rev enue Code, 26 U.S.C., Sectio n
501(c)(3), and which is itself a member of an organization which is
exempt from taxation pursuant to the provisions of the Internal
Revenue Code, 26 U.S.C., Section 501(c)(3), if the membership
organization is primarily engage d in advancing the purposes of its
member organizations through fundraising, public awareness, or other
efforts for the benefit of its member organizations, and if the
member organization is primarily engaged either in providing
educational services and pr ograms concerning health-related diseases
and conditions to individuals suffering from such health-related
diseases and conditio ns or their caregivers and family members or
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support to such individuals, or in h ealth-related research as to
such diseases and conditions, or both. In order to qualify for the
exemption authorized by this paragraph, the member nonprofit
organization shall be required to provide proof to the Oklahoma Tax
Commission of its membership s tatus in the membership organization;
62. Sales of tangible personal prope rty or services to or by an
organization which is part of a national volunteer women's service
organization dedicated to promoting patriotism, preserving American
history, and securing better education for children and which has at
least 168,000 members in 3,000 chapters across the United States;
63. Sales of tangible personal property or services to or by a
YWCA or YMCA organization which is part of a national nonprofit
community service organization working to meet the health and social
service needs of its members across the United States;
64. Sales of tangible personal property or services to or by a
veteran's organization which is exempt from taxation pursuant to the
provisions of the Internal Revenue Code, 26 U.S.C., Secti on
501(c)(19) and which is k nown as the Veterans of Foreign Wars of the
United States, Oklahoma Chapters;
65. Sales of boxes of food by a church or by an organization,
which is exempt from taxation pursuant t o the provisions of the
Internal Revenue Code, 26 U.S.C., Section 501(c)(3) . To qualify
under the provisions of this paragraph, the organization must be
organized for the pri mary purpose of feeding needy individuals or to
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encourage volunteer service by re quiring such service in order to
purchase food. These boxes shall only con tain edible staple food
items;
66. Sales of tangible personal property or services to any
person with whom a church has duly entered into a construction
contract, necessary for car rying out such contract or to any
subcontractor to such a construction contract;
67. Sales of tangible personal property or services used
exclusively for charitable or educat ional purposes, to or by an
organization which:
a. is exempt from taxation pursu ant to the provisions of
the Internal Revenue Co de, 26 U.S.C., Section
501(c)(3),
b. has filed a Not-for-Profit Certificate of
Incorporation in this state, and
c. is organized for the purpose of:
(1) providing training and education to
developmentally disabled individuals,
(2) educating the community ab out the rights,
abilities, and strengths of developmentally
disabled individuals, and
(3) promoting unity among developmentally disabled
individuals in their community and geographic
area;
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68. Sales of tangible personal property or services to any
organization which is a shelter for abused, neglected, or abandoned
children and which is exempt from taxation pursuant to the
provisions of the Internal Revenue Code, 26 U.S.C., Section
501(c)(3); provided, until July 1, 2008, such exemption shall apply
only to eligible shelters for children from birth to age twelve (12)
and after July 1, 2008, such exemption shall apply to eligible
shelters for children from birth to age eighteen (18);
69. Sales of tangible personal property or services to a child
care center which is licensed pursuant to the Oklahoma Child Care
Facilities Licensing Act and which:
a. possesses a 3-star rating from the D epartment of Human
Services Reaching for the Stars Program or a national
accreditation, and
b. allows on-site universal prekinde rgarten education to
be provided to four-year-old children through a
contractual agreement with any public school or school
district.
For the purposes of this paragraph, sales made to any person,
firm, agency, or entity that has entered previously into a
contractual relationship with a child care center for construction
and improvement of buildings and other structures owned by the child
care center and operated for educational purposes shall be
considered sales made to a child care center. Any such person,
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firm, agency, or entity making purchases on behalf of a child care
center shall certify, in writing, on the copy of the invoic e or
sales ticket the nature of the purchase. Any such person, or person
acting on behalf of a firm, agency, or entity making purchases on
behalf of a child care center in violation of this paragraph shall
be guilty of a misdemeanor and upon conviction th ereof shall be
fined an amount equal to double the amount of sales tax involved or
incarcerated for not more than sixty (60) day s or both;
70. a. Sales of tangible personal property to a service
organization of mothers who have children who are serving or who
have served in the military, which service organization is exempt
from taxation pursuant to the provisions of the Internal R evenue
Code, 26 U.S.C., Section 501(c)(19) and which is known as the Blue
Star Mothers of America, Inc. The exemption provided by this
paragraph shall only apply to the purchase of tangible personal
property actually sent to United States military personn el overseas
who are serving in a combat zone and not to any other tangible
personal property purchased by the organization. Provided, this
exemption shall not apply to any sales tax levied by a city, town,
county, or any other jurisdiction in this state.
b. The exemption authorized by this paragraph shall be
administered in the form of a refund from the sales
tax revenues apportioned p ursuant to Section 1353 of
this title, and the vendor shall be requ ired to
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collect the sales tax otherwise applicable to th e
transaction. The purchaser may apply for a refund of
the state sales tax paid in the manner prescribed by
this paragraph. Within sixty (60) days after the end
of each calendar quarter, any purchas er that is
entitled to make application for a refund bas ed upon
the exempt treatment authorized by this paragraph may
file an application for refund of the state sales
taxes paid during suc h preceding calendar quarter.
The Tax Commission shall prescribe a form for purposes
of making the application for refund.
c. A purchaser who applies for a refund pursuant to this
paragraph shall certify that the items were actually
sent to military perso nnel overseas in a combat zone.
Any purchaser that applies for a refund for the
purchase of items that are not authorized for
exemption under this paragraph shall be subject to a
penalty in the amount of Five Hundred Dollars
($500.00);
71. Sales of food and snack items to or by an organization
which is exempt from tax ation pursuant to the provisions of the
Internal Revenue Code, 26 U.S.C., Section 501(c)(3), whose primary
and principal purpose is providing funding for scholarships in the
medical field;
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72. Sales of tangible personal property or services for use
solely on construction projects for organizations which are exem pt
from taxation pursuant to the provisions of the Internal Revenue
Code, 26 U.S.C., Section 501(c)(3) and whose purpose is providing
end-of-life care and access to hospice services to low-income
individuals who live in a facility owned by the organization . The
exemption provided by this paragraph applies to sales to the
organization as well as to sales to any person with whom the
organization has duly entered into a construction contract,
necessary for carrying out such contract or to any subcontractor to
such a construction contract. Any person making purchases on behalf
of such organization shall certify, in writing, on the copy of the
invoice or sales ticket to be retained by the vendor that th e
purchases are made for and on behalf of such organization and set
out the name of such organization. Any person who wrongfully or
erroneously certifies that purchases are for any of the abo ve-named
organizations or who otherwise violates this section sh all be guilty
of a misdemeanor and upon conviction thereof shall be fined an
amount equal to double the amount of sales tax involved or
incarcerated for not more than sixty (60) days or both;
73. Sales of tickets for admission to events held by
organizations exempt from taxation pursuant to the provisions of the
Internal Revenue Code, 26 U.S.C., Section 501(c)(3) that are
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organized for the purpose of supporting general hospitals licensed
by the State Department of Health;
74. Sales of tangible personal property or services:
a. to a foundation which is exempt from taxation pursuant
to the provisions of the Internal Revenue Code, 26
U.S.C., Section 501(c)(3) and which raises tax-
deductible contributions in support of a wide range of
firearms-related public interest activities of the
National Rifle Association of Ame rica and other
organizations that defend and foster Second Amendment
rights, and
b. to or by a grassroots fundraising program for sal es
related to events to raise funds for a foundation
meeting the qualifications of subparagraph a of this
paragraph;
75. Sales by an organization or entity which is exempt from
taxation pursuant to the provisions of the Internal Revenue Code, 26
U.S.C., Section 501(c)(3) which are related to a fundraising event
sponsored by the organization or entity when the event does not
exceed any five (5) consecutive days and when the sales are not in
the organization's or the entity's regular course of business.
Provided, the exemption provided in this paragraph shall be li mited
to tickets sold for admittance to the fundraising event an d items
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which were donated to the organization or entity for sale at the
event;
76. Effective November 1, 2017, sales of tangible pe rsonal
property or services to an organization which is ex empt from
taxation pursuant to the provisions of the Internal Rev enue Code, 26
U.S.C., Section 501(c)(3) and operates as a collaborative model
which connects community agencies in one location to se rve
individuals and families affected by violence and wher e victims have
access to services and advocacy at no cost to the victim;
77. Effective July 1, 2018, sales of tangible personal property
or services to or by an association which is exempt from tax ation
pursuant to the provisions of the Internal Revenue Code, 26 U.S.C.,
Section 501(c)(19) and which is known as the Nati onal Guard
Association of Oklahoma;
78. Effective July 1, 2018, sales of tangible personal property
or services to or by an associat ion which is exempt from taxation
pursuant to the provisions of the Internal Revenue Code, 26 U.S.C.,
Section 501(c)(4) and which is known as the Marine Corps League of
Oklahoma;
79. Sales of tangible personal property or services to the
American Legion, whether the purchase is made by the entity
chartered by the United States Congress or is an entity organized
under the laws of this or another state pursuant to the authority of
the national American Legion organization;
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80. Sales of tangible personal pro perty or services to or by an
organization which is:
a. exempt from taxation pursuant to the provisions of the
Internal Revenue Code, 26 U.S.C., Section 501(c)(3),
b. verified with a letter from the MIT Fab Foundation as
an official member of the Fab Lab N etwork in
compliance with the Fab Charter, and
c. able to provide documenta tion that its primary and
principal purpose is t o provide community access to
advanced 21st century manufacturing and digital
fabrication tools for science, technology,
engineering, art, and math (STEAM) learning skills,
developing inventions, creating and sustaining
businesses, and producing personaliz ed products;
81. Effective November 1, 2021, sales of tangible personal
property or services used solely for construction and remodel ing
projects to an organization which is exempt from taxation pursuant
to the provisions of the Internal Revenue Code, 26 U.S.C., Section
501(c)(3), and which meets the following requirements:
a. its primary purpose is to construct or remodel and
sell affordable housing and provide homeownership
education to residents of Oklahom a that have an income
that is below one hundred percent (100%) of the Family
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Median Income guidelines as defined by the U.S.
Department of Housing and Urban Development,
b. it conducts its activities in a manner that serves
public or charitable purposes, r ather than commercial
purposes,
c. it receives funding and revenue and charges fees in a
manner that does not incentivize it or its employees
to act other than in the best interests of its
clients, and
d. it compensates its employees in a manner that does not
incentivize employees to act other than in t he best
interests of its clients;
82. Effective November 1, 2021, sales of tangible personal
property or services to a nonprofit ent ity, organized pursuant to
Oklahoma law before January 1, 2022, exempt from federal income
taxation pursuant to Section 501 (c) of the Internal Revenue Code of
1986, as amended, the principal functions of which are to provide
assistance to natural persons f ollowing a disaster, with program
emphasis on repair or restoration to sing le-family residential
dwellings or the construct ion of a replacement single-family
residential dwelling. As used in this paragraph, "disaster" means
damage to property with or with out accompanying injury to persons
from heavy rain, high winds, tornadic wi nds, drought, wildfire,
snow, ice, geologic dist urbances, explosions, chemical accidents or
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spills, and other events causing damage to property on a large
scale. For purposes of this paragraph, an entity that expended at
least seventy-five percent (75%) o f its funds on the restoration to
single-family housing following a disaster including related general
and administrative expenses, shall be eligible for the exemption
authorized by this paragraph;
83. Effective November 1, 2021, through December 31, 2024 ,
sales of tangible personal property or service s to a museum that:
a. operates as a part of an organization which is exempt
from taxation pursuant to the provisions of the
Internal Revenue Code, 26 U.S.C., Section 501(c)(3),
b. is not accredited by the Am erican Alliance of Museums,
and
c. operates on an annual budget of less than One Million
Dollars ($1,000,000. 00);
84. Until July 1, 2022, sales of tangible personal property or
services for use in a clinical practice or medical facility operated
by an organization which is exempt from taxation pursuant to the
provisions of the Internal Revenue Code of the Unit ed States, 26
U.S.C., Section 501(c)(3), and which has entered into a joint
operating agreement with the University Hospitals Trust created
pursuant to Section 3224 of Title 63 of the Oklahoma Stat utes. The
exemption provided by this paragraph shall be li mited to the
purchase of tangible personal property and services for use in
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clinical practices or medical facilities acquired or leased by the
organization from the University Hospitals Authority, University
Hospitals Trust, or the University of Oklahoma o n or after June 1,
2021; and
85. Sales of tangible personal property or services t o a
nonprofit entity, organized pursuant to Oklahoma law before Ja nuary
1, 2019, exempt from federal income taxati on pursuant to Section
501(c) of the Internal Revenue Code of 1986, as amended, the
principal functions of which are to provide assistance to natural
persons following a disaster, with program emphasis on rep air or
restoration to single-family residential dwellings or the
construction of a replacement single -family residential dwelling.
For purposes of this paragraph, an entity operated exclusi vely for
charitable and educational purposes through the coordinat ion of
volunteers for the disaster recovery of h omes (as derived from Part
III, Statement of Program Servic es, of Internal Revenue Service Form
990) and offers its services free of charge to disaster survivors
statewide who are low income with no or limite d means of recovery on
their own for the restora tion to single-family housing following a
disaster including related general and administrative expenses,
shall be eligible for the exemption authorized by this paragraph.
The exemption provided by this para graph shall only be applicable to
sales made on or after the effective date of this act July 1, 2022.
As used in this paragraph, "disaster" means damage to property with
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or without accompanying injury to persons from heavy rain, high
winds, tornadic winds , drought, wildfire, snow, ice, geologic
disturbances, explosions, chemical accidents or spills, and other
events causing damage to property on a large scale;
86. Sales of tangible personal pr operty or services to an
organization which is exempt from taxation pursuant to the
provisions of the Internal Revenue Code, 26 U.S.C., Section
501(c)(3), the principal functions of w hich are to prevent child
abuse and neglect through education, treatment, and advocacy, and
operates a facility that offers comprehensive community-based
services for abused or negle cted children from birth through
eighteen (18) years of age . To be eligible for the exemption
provided by this paragraph , the organization shall provide the
following documentation to the Oklaho ma Tax Commission:
a. articles of incorporation,
b. organizational by-laws, and
c. a notarized letter from the president or chairman of
the organization stating the services prov ided by the
organization; and
87. Sales of tangible personal property or services to or by an
organization in this state which:
a. is exempt from taxation pursuant to the p rovisions of
the Internal Revenue Code, 26 U.S.C., Section
501(c)(3), and
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b. provides documentation to the Oklahoma Tax Commission
showing the organization 's principal purpose is to
provide school supplies or articles of clothing for
underserved students a ttending grades pre-K through 12
at public schools in this state.
The exemption provided by this paragraph shall include
materials, supplies, and equipment used in the construc tion or
improvement of buildings and other struc tures owned by the
organization and operated in pursuit of th e organization's primary
and principal purpose. The exemption shall apply to sales to the
organization and to sales to any person with whom the or ganization
has duly entered into a construction contract, necessary for
carrying out the contract or to any subcontracto r to the
construction contract.
SECTION 2. AMENDATORY 68 O.S. 2021, Section 1357, as
amended by Section 1, Cha pter 206, O.S.L. 2022 (68 O.S. Supp. 2022,
Section 1357), is amended to read as follo ws:
Section 1357. Exemptions – General.
There are hereby specifically exempted fr om the tax levied by
the Oklahoma Sales Tax Code:
1. Transportation of school pupils to and from elementary
schools or high schools in motor or other vehicles;
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2. Transportation of persons where the fare of each person does
not exceed One Dollar ($1.00), or local transportatio n of persons
within the corporate limits of a municipality except by taxicabs;
3. Sales for resale to persons engaged in the bu siness of
reselling the articles purchased, whether within or without the
state, provided that such sales to residents of this s tate are made
to persons to whom sales tax permits have been issued as provided in
the Oklahoma Sales Tax Code. This exemption shall not apply to the
sales of articles made to persons holding permits when such persons
purchase items for their use and whic h they are not regularly
engaged in the business of reselling; neither shall this exemption
apply to sales of tangible personal property to peddlers, solicitors
and other salespersons who do not have an established place of
business and a sales tax permit. The exemption provided by this
paragraph shall apply to sales of motor fuel or diesel fuel to a
Group Five vendor, but the use of such motor fuel or diesel fuel by
the Group Five vendor shall not be exempt from the tax levied by th e
Oklahoma Sales Tax Co de. The purchase of motor fuel or diesel fuel
is exempt from sales tax when the motor fuel is for shipment outside
this state and consumed by a common carrier by rail in the conduct
of its business. The sales tax shall apply to the purchase of motor
fuel or diesel fuel in Oklahoma by a common carrier by rail when
such motor fuel is purchased for fueling, within this state, of any
locomotive or other motorized flanged wheel equipment;
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4. Sales of advertising space in newspapers and periodicals;
5. Sales of programs relating to sporting and entertainment
events, and sales of advertising on billboards (including signage,
posters, panels, marquees, or on other similar surfaces, whether
indoors or outdoors) or in programs relating to spo rting and
entertainment events, and sales of any advertising, to be displayed
at or in connection with a sporting event, via the Internet,
electronic display devices or through public address or broadcast
systems. The exemption authorized by this paragrap h shall be
effective for all sales made on or after January 1, 2001;
6. Sales of any advertising, other than the advertising
described by paragraph 5 of this section, via the Internet,
electronic display devices or through the electronic media including
radio, public address o r broadcast systems, television (whether
through closed circuit broadcasting systems or otherwise), and cable
and satellite television, and the servicing of any advertising
devices;
7. Eggs, feed, supplies, machinery , and equipment purchased by
persons regularly engaged in the business of raising worms, fish,
any insect, or any other form of terrestrial or aquatic animal life
and used for the purpose of raising same for marketing. This
exemption shall only be granted and extended to the purchaser when
the items are to be used and in fact are used in the raising of
animal life as set out above. Each purchaser shall certify, in
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writing, on the invoice or sales ticket retained by the vendor that
the purchaser is regularly engaged in th e business of raising s uch
animal life and that the items purchased will be used only in such
business. The vendor shall certify to the Oklahoma Tax Co mmission
that the price of the items has been reduced to grant the full
benefit of the exemption. Viola tion hereof by the purc haser or
vendor shall be a misdemeanor;
8. Sale of natural or artificial gas and electricity, and
associated delivery or transmi ssion services, when sold exclusively
for residential use. Provided, this exemption shall not apply to
any sales tax levied by a city or town, or a county or any other
jurisdiction in this state;
9. In addition to the exemptions authorized by Section 135 7.6
of this title, sales of drugs sold pursuant to a prescription
written for the treatment of human bei ngs by a person license d to
prescribe the drugs, and sales of insulin and medical oxygen.
Provided, this exemption shall not apply to over-the-counter drugs;
10. Transfers of title or possession of empty, partially
filled, or filled returnable oil and ch emical drums to any per son
who is not regularly engaged in the business of selling, reselling
or otherwise transferring empty, partially filled or filled
returnable oil drums;
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11. Sales of one-way utensils, paper napkins, paper cups,
disposable hot contai ners, and other one-way carry out materials to
a vendor of meals or beverages;
12. Sales of food or food products for home consumption which
are purchased in whole or in part with coupons issued pursuant to
the federal food stamp program as authorized by Sections 2011
through 2029 of Title 7 of the United States Code, as to that
portion purchased with such coupons. The exemption provided for
such sales shall be inapplicable to such sales upon the effective
date of any federal law that removes the requirem ent of the
exemption as a condition for participation by the state in the
federal food stamp program;
13. Sales of food or food products, or any equ ipment or
supplies used in the preparation of the food or food products to or
by an organization which:
a. is exempt from taxation pursuant to the provisions of
Section 501(c)(3) of the Internal Revenue Code, 26
U.S.C., Section 501(c)(3), and which provid es and
delivers prepared meals for home consumption to
elderly or homebound persons as part of a program
commonly known as "Meals on Wheels" or "Mobile Meals",
or
b. is exempt from taxation pursuant to the provisions of
Section 501(c)(3) of the Internal R evenue Code, 26
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U.S.C., Section 501(c)(3), and which receives federal
funding pursuant to the Older Americans Act of 1965,
as amended, for the purpose of providing nutrition
programs for the care and benefit of elderly persons;
14. a. Sales of tangible pe rsonal property or services to or
by organizations which are exempt from taxation
pursuant to the provisions o f Section 501(c)(3) of the
Internal Revenue Code, 26 U.S.C., Section 501(c)(3),
and:
(1) are primarily involved in the collection and
distribution of food and other household products
to other organizations that facilitate the
distribution of such products to the needy and
such distributee organizations are exempt from
taxation pursuant to the provisions of Section
501(c)(3) of the Internal Revenue Code, 26
U.S.C., Section 501(c)(3), or
(2) facilitate the distribution of such products to
the needy.
b. Sales made in the course of business for profit or
savings, competing with other persons engaged in the
same or similar business shall not be exempt under
this paragraph.
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c. The exemption provided by this paragraph shall include
sales of tangible personal property or taxable
services consumed or incorporated in the construction
of a facility placed in service during calendar year
2023. The exemption shall include sales and taxable
services to the organization and to any person,
entity, contractor, or subcontractor with whom the
organization has duly entered into a construction
contract necessary for carrying out the contract. For
sales tax paid on purchases that would otherwise be
exempt pursuant to this subparagraph but occurred
before the effective date of this act , the Tax
Commission shall make refunds to the purchasers in the
full amount of the sales tax paid, as documented by
the purchaser and veri fied by the Tax Commission;
15. Sales of tangible personal property or services to
children's homes which are located on church-owned property and are
operated by organizations exempt from taxation pursuant to the
provisions of the Internal Revenue Code, 26 U.S.C., Section
501(c)(3);
16. Sales of computers, data processing equipment, related
peripherals, and telephone, telegraph or telecommunications service
and equipment for use in a qualified aircraft maintenance or
manufacturing facility. For purposes of this paragraph, "qualified
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aircraft maintenance or manufacturing facility" means a new or
expanding facility prima rily engaged in aircraft repair, building,
or rebuilding whether or not on a factory basis, whose total cost of
construction exceeds the sum of Five Million Dollars ($5,000,000.00)
and which employs at least two hundred fifty (250) new full -time-
equivalent employees, as certified by the Oklahoma Employment
Security Commission, upon completion of the facility. In order to
qualify for the exemption provided for by this paragraph, the cost
of the items purchased by the qualified aircraft maintenance or
manufacturing facility shall equal or exceed the sum of Two Millio n
Dollars ($2,000,000.00);
17. Sales of tangible personal property consumed or
incorporated in the construction or expansion of a qualified
aircraft maintenance or manufacturing facility as define d in
paragraph 16 of this section. For purposes of this paragraph, sales
made to a contractor or subcontractor that has previously entered
into a contractual relationship with a qualified aircraft
maintenance or manufacturing facility for construction or expansion
of such a facility shall be considered sales made to a qualified
aircraft maintenance or manufacturing facility;
18. Sales of the following telecommunications services:
a. Interstate and International "800 service". "800
service" means a "telecommunications service" that
allows a caller to dial a toll-free number without
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incurring a charge for the call. The service is
typically marketed under the name "800", "855", "866",
"877" and "888" toll-free calling, and any subsequent
numbers designated by the Federal Communications
Commission,
b. Interstate and International "900 service". "900
service" means an inbound toll "telecommunications
service" purchased by a subscriber that allows the
subscriber's customers to call in to the subscriber 's
prerecorded announcemen t or live service. "900
service" does not include the charge for: collection
services provided by the seller of the
"telecommunications services" to the subscriber, or
service or product sold by the subscriber to the
subscriber's customer. The service is typically
marketed under the name "900" service, and any
subsequent numbers designated by the Federal
Communications Commission,
c. Interstate and International "private communications
service". "Private communications service " means a
"telecommunications service" that entitles the
customer to exclusive or priority use of a
communications channel or group of channels between or
among termination points, regardless of the manner in
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which such channel or channels are connected, and
includes switching capaci ty, extension lines, stations
and any other associated services that are provided in
connection with the use of such channel or channels,
d. "Value-added nonvoice data service". "Value-added
nonvoice data service " means a service that otherwise
meets the definition of "telecommunications services"
in which computer processing applications are used to
act on the form, content, code or protocol of the
information or data primarily for a purpose other than
transmission, conveyance , or routing,
e. Interstate and International telecommunications
service which is:
(1) rendered by a company for private use within its
organization, or
(2) used, allocated or distributed by a company to
its affiliated group,
f. Regulatory assessments and charges including charges
to fund the Oklahoma Universal Service Fund, the
Oklahoma Lifeline Fund and the Oklahoma High Cost
Fund, and
g. Telecommunications nonre curring charges including but
not limited to the installation, connection, change ,
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or initiation of telecommunications se rvices which are
not associated with a retail consumer sale;
19. Sales of railroad track spikes manufactured and sold for
use in this state in the construction or repair of railroad tracks,
switches, sidings, and turnouts;
20. Sales of aircraft and aircraft parts provided such sales
occur at a qualified aircraft maintenance facility. As used in this
paragraph, "qualified aircraft maint enance facility" means a
facility operated by an air common carrier including one or more
component overhaul support buildings or structures in an area owned,
leased, or controlled by the air common carrier, at which there were
employed at least two thousa nd (2,000) full-time-equivalent
employees in the preceding year as certified by the Oklahoma
Employment Security Commission and which is primarily related to the
fabrication, repair, alteration, modification, refurbishing,
maintenance, building, or rebuilding of commercial aircraft or
aircraft parts used in air common carriage. For purposes of this
paragraph, "air common carrier" shall also include members of an
affiliated group as defined by Section 1504 of the Internal Revenue
Code, 26 U.S.C., Section 15 04. Beginning July 1, 2012, sales of
machinery, tools, supplies, equipment , and related tangible p ersonal
property and services used or consumed in the repair, remodeling, or
maintenance of aircraft, aircraft engines or aircraft component
parts which occur at a qualified aircraft maintenance facility;
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21. Sales of machinery and equipment purchased and used by
persons and establishments primarily engaged in computer services
and data processing:
a. as defined under Industrial Group Numbers 7372 and
7373 of the Standard Industrial Classification (SIC)
Manual, latest version, which derive at least fifty
percent (50%) of their annual gross revenues from the
sale of a product or service to an out-of-state buyer
or consumer, and
b. as defined under Industrial Gr oup Number 7374 of the
SIC Manual, latest version, which derive at least
eighty percent (80%) of th eir annual gross revenues
from the sale of a product or service to an out-of-
state buyer or consumer.
Eligibility for the exemption set out in this paragraph shall be
established, subject to review by the Tax Commission, by annually
filing an affidavit wit h the Tax Commission stating that the
facility so qualifies and such information as required by the Tax
Commission. For purposes of determining whether annu al gross
revenues are derived from sales to out-of-state buyers or consumers,
all sales to the fede ral government shall be considered to be to an
out-of-state buyer or consumer;
22. Sales of prosthetic devices to an individual for use by
such individual. For purposes of this paragraph, "prosthetic
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device" shall have the same meaning as provided in Sec tion 1357.6 of
this title, but shall not include corrective eye glasses, contact
lenses, or hearing aids;
23. Sales of tangible personal property or service s to a motion
picture or television production company to be used or consumed in
connection with an eligible production. For purposes of this
paragraph, "eligible production" means a documentary, special, music
video or a television commercial or televisi on program that will
serve as a pilot for or be a segment of an ongoing dramatic or
situation comedy series filmed or taped for network or national or
regional syndication or a feature-length motion picture intended for
theatrical release or for network or national or regional
syndication or broadcast. The provisions of this paragraph shall
apply to sales occurring on or after July 1, 1996. In order to
qualify for the exemption, the motion picture or television
production company shall file any documentat ion and information
required to be submitted pursuant to rules promulgated by the Tax
Commission;
24. Sales of diesel fuel sold for consumption by commercial
vessels, barges and other commercial watercraft;
25. Sales of tangible personal property or serv ices to tax-
exempt independent nonprofit biomedical research foundations that
provide educational p rograms for Oklahoma science students and
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teachers and to tax-exempt independent nonprofit community blood
banks headquartered in this state;
26. Effective May 6, 1992, sales of wireless telecommunications
equipment to a vendor who subsequently transfers the equipment at no
charge or for a discounted charge to a consumer as part of a
promotional package or as an inducement to commence or continue a
contract for wireless telecommunications services;
27. Effective January 1, 1991, leases of rail transportat ion
cars to haul coal to coal-fired plants located in this state which
generate electric power;
28. Beginning July 1, 2005, sales of aircraft engine repairs ,
modification, and replacement parts, sales of aircraft frame repairs
and modification, aircraft i nterior modification, and paint, and
sales of services employed in the repair, modification, and
replacement of parts of aircraft engines, aircraft frame and
interior repair and modification, and paint;
29. Sales of materials and supplies to the owner or operator of
a ship, motor vessel, or barge that is used in interstate or
international commerce if the materials and supplies:
a. are loaded on the ship, mot or vessel, or barge and
used in the maintenance and operation of the ship,
motor vessel, or barge, or
b. enter into and become component parts of the ship,
motor vessel, or barge;
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30. Sales of tangible personal property made at estate sales at
which such property is offered for sale on the premises of the
former residence of the decedent by a person wh o is not required to
be licensed pursuant to the Transient Merchant Licensing Act, or who
is not otherwise required to obtain a sales tax permit for the sale
of such property pursuant to the provisions of Section 1364 of this
title; provided:
a. such sale or event may not be held for a period
exceeding three (3) consecutive days,
b. the sale must be conducted within six (6) months of
the date of death of the d ecedent, and
c. the exemption allowed by this paragraph shall not be
allowed for property that was not part of the
decedent's estate;
31. Beginning January 1, 2004, sales of electricity and
associated delivery and transmission services, when sold exclusiv ely
for use by an oil and gas operator for reservoir dewatering projects
and associated operations commencing on or after July 1, 2003, in
which the initial water-to-oil ratio is greater than or equal to
five-to-one water-to-oil, and such oil and gas devel opment projects
have been classified by the Corporation Commission as a reservoir
dewatering unit;
32. Sales of prewritten computer software that is delivered
electronically. For purposes of this paragraph, "delivered
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electronically" means delivered to t he purchaser by means other than
tangible storage media;
33. Sales of modular dwelling units whe n built at a production
facility and moved in whole or in parts, to be assembled on-site,
and permanently affixed to the real property and used for
residential or commercial purposes. The exemption provided by this
paragraph shall equal forty -five percent (45%) of the total sales
price of the modular dwelling unit. For p urposes of this paragraph,
"modular dwelling unit" means a structure that is not subject to the
motor vehicle excise tax imposed pursuant to Section 2103 of this
title;
34. Sales of tangible personal property or services to:
a. persons who are residents o f Oklahoma and have been
honorably discharged from active service in any branch
of the Armed Forces of the United States or Oklahoma
National Guard and who have been certified by the
United States Department of Ve terans Affairs or its
successor to be in re ceipt of disability compensation
at the one-hundred-percent rate and the disability
shall be permanent and have been sustained through
military action or accident or resulting from disea se
contracted while in such active service and registered
with the veterans registry created by the Oklahoma
Department of Veterans Affairs; provided, that if th e
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veteran received the sales tax exemption prior to
November 1, 2020, he or she shall be requir ed to
register with the vet erans registry prior to July 1,
2023, in order to remain qualified, or
b. the surviving spouse of the person in subparagraph a
of this paragraph if the person is deceased and the
spouse has not remarried and the surviving spouse of a
person who is determined by the United States
Department of Defense or any branch of the United
States military to have died while in the line of duty
if the spouse has not remarried. Sales for the
benefit of an eligible person to a spouse of the
eligible person or to a member of the household in
which the eligible per son resides and who is
authorized to make purchases on the person's behalf,
when such eligible person is not present at the sale,
shall also be exempt for purpose s of this paragraph.
The Oklahoma Tax Commission s hall issue a separate
exemption card to a s pouse of an eligible person or to
a member of the household in which the eligible person
resides who is authorized to make purchases on the
person's behalf, if requested by the eligible person.
Sales qualifying for the exemption authorized by this
paragraph shall not exceed Twenty-five Thousand
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Dollars ($25,000.00) per year per individual while the
disabled veteran is living. Sales qualifying for the
exemption authorized by this paragr aph shall not
exceed One Thousand Dollars ($1,000.00) per year for
an unremarried surviving spouse. Upon request of the
Tax Commission, a person asserting or cla iming the
exemption authorized by this paragraph shall provide a
statement, executed under oat h, that the total sales
amounts for which the exemption is applicable h ave not
exceeded Twenty-five Thousand Dollars ($25,000.00) per
year per living disabled vet eran or One Thousand
Dollars ($1,000.00) per year for an unremarried
surviving spouse. If the amount of such exempt sales
exceeds such amount, the sales tax in exce ss of the
authorized amount shall be treated as a direct sales
tax liability and may be rec overed by the Tax
Commission in the same manner provided by law for
other taxes including penalty and interest. The Tax
Commission shall promulgate any rules necess ary to
implement the provisions of this paragraph, which
shall include rules providing for the disclosure of
information about persons eligible for the exemption
authorized in this par agraph to the Oklahoma
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Department of Veteran's Veterans Affairs, as
authorized in Section 205 of this title;
35. Sales of electricity to the operator, specifically
designated by the Corporation Commission, of a spacing unit or lease
from which oil is produced or attempted to be produced using
enhanced recovery methods including, but not limited to, increased
pressure in a producing formation through the use of water or
saltwater if the electrical usage is associated with and necessary
for the operation of equipme nt required to inject or circulate
fluids in a producing formatio n for the purpose of forcing oil or
petroleum into a wellbore for eventual recovery and production f rom
the wellhead. In order to be eligible for the sales tax exempti on
authorized by this p aragraph, the total content of oil recovered
after the use of enh anced recovery methods shall not exceed one
percent (1%) by volume. The exemption authorized by thi s paragraph
shall be applicable only to the state sales tax rate and shall not
be applicable to any county or municipal sales tax rate;
36. Sales of intras tate charter and tour bus transportation.
As used in this paragraph, "intrastate charter and tour b us
transportation" means the transportation of persons from one
location in this state to another location in this state in a motor
vehicle which has been c onstructed in such a manner that it may
lawfully carry more than eighteen persons, and which is ordi narily
used or rented to carry persons for compensation. Provid ed, this
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exemption shall not apply to regularly scheduled bus transportation
for the general public;
37. Sales of vitamins, minerals, and dietary supplements by a
licensed chiropractor to a p erson who is the patient of such
chiropractor at the physical loc ation where the chiropra ctor
provides chiropractic care or services to such patient. The
provisions of this paragraph shall not be applicable to any drug,
medicine, or substance for which a prescription by a licensed
physician is required;
38. Sales of goods, wares, merchandis e, tangible personal
property, machinery, and equipment to a web sea rch portal located in
this state which derives at least eighty percent (80%) of its annual
gross revenue from the sale of a product or service to an out-of-
state buyer or consumer. For pu rposes of this paragraph, "web
search portal" means an establishment classified under NAICS code
519130 which operates websites that use a search engine to generate
and maintain extensive databases of Internet addresses and content
in an easily searchable format;
39. Sales of tangible personal property consumed or
incorporated in the construction or expansion of a facility for a
corporation organized under Section 437 et seq. of Title 18 of the
Oklahoma Statutes as a rural electric coo perative. For purpo ses of
this paragraph, sales made to a contractor or subcontractor th at has
previously entered into a contractual relationship with a rural
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electric cooperative for cons truction or expansion of a facility
shall be considered sales made to a rural electric cooperative;
40. Sales of tangible personal property or services to a
business primarily engaged in the repair of consumer electronic
goods including, but not limited t o, cell phones, compact disc
players, personal computers, MP3 pla yers, digital devices for the
storage and retrieval of information through hard-wired or wireless
computer or Internet connections, if the devices are sold to the
business by the original man ufacturer of such devices and the
devices are repaired, refitted or refurbished for sa le by the entity
qualifying for the exemption authorized by this parag raph directly
to retail consumers or if the devices are sold to another business
entity for sale to retail consumers;
41. On or after July 1, 2019, and prior to Ju ly 1, 2024, sales
or leases of rolling stock when sold or leased by the manufacturer,
regardless of whether the purchaser is a public services corporation
engaged in business as a common carri er of property or passengers by
railway, for use or consumption by a common carrier directly in the
rendition of public service. For purposes of this parag raph,
"rolling stock" means locomotives, autocars, and railroad cars and
"sales or leases" includes railroad car maintenance and retrofitting
of railroad cars for th eir further use only on the railways; and
42. Sales of gold, silver, platinum, palladium, or other
bullion items such as coins and bars and legal tender of any nation,
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which legal tender is s old according to its value as precious metal
or as an investment. As used in the paragraph, "bullion" means any
precious metal including, but not limited to, gold, silver,
platinum, and palladium, that is in such a state or condition that
its value depends upon its precious metal content and not its form.
The exemption authorized by this paragraph shall not apply to
fabricated metals that have been process ed or manufactured for
artistic use or as jewelry.
SECTION 3. This act shall become effective November 1, 2023.
COMMITTEE REPORT BY: COMMITTEE ON APPROPRIATIONS AND BUDGET , dated
04/20/2023 - DO PASS, As Amended and Coauthored.