OK
Oklahoma House Bill HB3052

Oklahoma 2024 Regular Session

Oklahoma House Bill HB3052 Compare Versions

Only one version of the bill is available at this time.
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5353 STATE OF OKLAHOMA
5454
5555 2nd Session of the 59th Legislature (2024)
5656
5757 HOUSE BILL 3052 By: Boles
5858
5959
6060
6161
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6363 AS INTRODUCED
6464
6565 An Act relating to revenue and taxation ; amending 68
6666 O.S. 2021, Sections 1352 and 1359, which relate to
6767 definitions and exemption s; modifying definition;
6868 expanding exemption to include custom order
6969 manufacturing; providing an effective date ; and
7070 declaring an emergency.
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7777 BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
7878 SECTION 1. AMENDATORY 68 O.S. 2021, Section 1352, is
7979 amended to read as follows:
8080 Section 1352. Definitions.
8181
8282 As used in the Oklahoma Sales Tax Code:
8383 1. "Bundled transaction" means the retail sale of two or more
8484 products, except real property and services to real proper ty, where
8585 the products are otherwise distinct and identifiable, and th e
8686 products are sold for one nonitem ized price. A "bundled
8787 transaction" does not include the sale of any products in which the
8888 sales price varies, or is negotiable, based on the selectio n by the
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140140 purchaser of the products included in the transaction. As us ed in
141141 this paragraph:
142142 a. "distinct and identifiable products " does not include:
143143 (1) packaging such as containers, boxes, sacks, bags,
144144 and bottles, or other materials such as wrapping,
145145 labels, tags, and instruction guides, that
146146 accompany the retail sale of the products and are
147147 incidental or immaterial to the retail sale
148148 thereof, including but not limited to, grocery
149149 sacks, shoeboxes, dry cleaning garment bags and
150150 express delivery envelopes and boxes,
151151 (2) a product provided free of charge with the
152152 required purchase of another product. A produ ct
153153 is provided free of charge if the sales price of
154154 the product purchased does not vary depending on
155155 the inclusion of the product provided free of
156156 charge, or
157157 (3) items included in the definition of gross
158158 receipts or sales price, pursuant to this
159159 section,
160160 b. "one nonitemized price " does not include a price that
161161 is separately identified by product on binding sales
162162 or other supporting sales -related documentation made
163163 available to the customer in paper or electronic form
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215215 including, but not limited to an invoice , bill of
216216 sale, receipt, contract, service agreement, lease
217217 agreement, periodic notice of rates and services, rate
218218 card, or price list,
219219 A transaction that otherwise meets the definition of a bundled
220220 transaction shall not be considered a bundled transaction if it is:
221221 (1) the retail sale of tangible personal property and
222222 a service where the tangible personal property is
223223 essential to the use of the service, and is
224224 provided exclusively in connection with the
225225 service, and the true object of the transaction
226226 is the service,
227227 (2) the retail sale of services where one service is
228228 provided that is essential to the use or receipt
229229 of a second service and the first serv ice is
230230 provided exclusively in connection with the
231231 second service and the true object of the
232232 transaction is the second service,
233233 (3) a transaction that includes taxable products and
234234 nontaxable products and the purchase price or
235235 sales price of the taxable pr oducts is de
236236 minimis. For purposes of this subdivision, "de
237237 minimis" means the seller's purchase price or
238238 sales price of taxable products is ten percent
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290290 (10%) or less of the total purchase price or
291291 sales price of the bundled products. Sellers
292292 shall use either the purchase price or the sales
293293 price of the products to determi ne if the taxable
294294 products are de minimis. Sellers may not use a
295295 combination of the purchase price and sales price
296296 of the products to determine if the taxable
297297 products are de minimis. Sellers shall use the
298298 full term of a service contract to determine if
299299 the taxable products are de minimis , or
300300 (4) the retail sale of exempt tangible personal
301301 property and taxable tangible personal property
302302 where:
303303 (a) the transaction includes food and food
304304 ingredients, drugs, durable medical
305305 equipment, mobility enhancing equi pment,
306306 over-the-counter drugs, prosthetic devices
307307 or medical supplies, and
308308 (b) the seller's purchase price or sales price
309309 of the taxable tangible personal property is
310310 fifty percent (50%) or less of the total
311311 purchase price or sales price of the bundled
312312 tangible personal property. Sellers m ay not
313313 use a combination of the purchase price and
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365365 sales price of the tangible personal
366366 property when making the fifty percent (50%)
367367 determination for a transaction;
368368 2. "Business" means any activity engaged in or caused to be
369369 engaged in by any person with the object of gain, benefit, or
370370 advantage, either direct or indirect;
371371 3. "Commission" or "Tax Commission" means the Oklahoma Tax
372372 Commission;
373373 4. "Computer" means an electronic device that accepts
374374 information in digital or similar form and manipulates it for a
375375 result based on a sequence of instructions;
376376 5. "Computer software" means a set of coded instructions
377377 designed to cause a "computer" or automatic data processing
378378 equipment to perform a task;
379379 6. "Consumer" or "user" means a person to whom a taxable sale
380380 of tangible personal property is made or to whom a taxable service
381381 is furnished. "Consumer" or "user" includes all contractors to whom
382382 a taxable sale of materials, supplies, equipment, or other tangible
383383 personal property is made or to whom a taxable service is furnished
384384 to be used or consumed in the performance of any contract;
385385 7. "Contractor" means any person who performs any improvement
386386 upon real property and who, as a necessary and incidental part of
387387 performing such improvement, incorporates tangible personal property
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439439 belonging to or purchased by the person into the real property being
440440 improved;
441441 8. "Drug" means a compound, substance or preparati on, and any
442442 component of a compound, substance or preparation:
443443 a. recognized in the official United State s
444444 Pharmacopoeia, official Homeopathic Pharmacopoeia of
445445 the United States, or official National Formulary, and
446446 supplement to any of them,
447447 b. intended for use in the diagnosis, cure, mitigation,
448448 treatment, or prevention of disease, or
449449 c. intended to affect t he structure or any function of
450450 the body;
451451 9. "Electronic" means relating to technology having electrical,
452452 digital, magnetic, wireless, optical, electr omagnetic, or similar
453453 capabilities;
454454 10. "Established place of busines s" means the location at which
455455 any person regularly engages in, conducts, or operates a business in
456456 a continuous manner for any length of time, that is open to the
457457 public during the hour s customary to such business, in which a stock
458458 of merchandise for resa le is maintained, and which is not exempted
459459 by law from attachment, execution, or other species of forced sale
460460 barring any satisfaction of any delinquent tax liability accrued
461461 under the Oklahoma Sales Tax Code;
462462 11. "Fair authority" means:
463463
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514514 a. any county, municipality, school district, publi c
515515 trust or any other political subdivision of this
516516 state, or
517517 b. any not-for-profit corporation acting pursuant to an
518518 agency, operating or management ag reement which has
519519 been approved or authorized by the governing body of
520520 any of the entities specified in s ubparagraph a of
521521 this paragraph which conduct, operate or produce a
522522 fair commonly understood to be a county, district or
523523 state fair;
524524 12. a. "Gross receipts", "gross proceeds" or "sales price"
525525 means the total amount of con sideration, including
526526 cash, credit, property and services, for which
527527 personal property or services are sold, leased or
528528 rented, valued in money, whether received in money or
529529 otherwise, without any deduction for the following:
530530 (1) the seller's cost of the property sold,
531531 (2) the cost of materials used, labor or service
532532 cost,
533533 (3) interest, losses, all costs of transportation to
534534 the seller, all taxes imposed on the seller, and
535535 any other expense of the seller,
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587587 (4) charges by the seller for any services necessary
588588 to complete the sale, other than delivery and
589589 installation charges,
590590 (5) delivery charges and installation charges, unless
591591 separately stated on the invoice, billing or
592592 similar document given to the purchaser, and
593593 (6) credit for any trade -in.
594594 b. Such term shall not include:
595595 (1) discounts, including cash, term, or coupons that
596596 are not reimbursed by a third party that are
597597 allowed by a seller and taken by a purchaser on a
598598 sale,
599599 (2) interest, financing, and carrying charges from
600600 credit extended on the sale of per sonal property
601601 or services, if the amount is separately stated
602602 on the invoice, bill of sale or similar document
603603 given to the purchaser, and
604604 (3) any taxes legally imposed directly on the
605605 consumer that are separately stated on the
606606 invoice, bill of sale or si milar document given
607607 to the purchaser.
608608 c. Such term shall include consideration received by the
609609 seller from third parties if:
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661661 (1) the seller actually receives consideration from a
662662 party other than the purchaser and the
663663 consideration is directly related to a price
664664 reduction or discount on th e sale,
665665 (2) the seller has an obligation to pass the price
666666 reduction or discount through to the purchaser,
667667 (3) the amount of the consideration attribut able to
668668 the sale is fixed and determinable by the seller
669669 at the time of the sale of the item to the
670670 purchaser, and
671671 (4) one of the following criteria is met:
672672 (a) the purchaser presents a coupon, certificate
673673 or other documentation to the seller to
674674 claim a price reduction or discount where
675675 the coupon, certificate or documentati on is
676676 authorized, distributed or gr anted by a
677677 third party with the understanding that the
678678 third party will reimburse any seller to
679679 whom the coupon, certificate or
680680 documentation is presen ted,
681681 (b) the purchaser identifies himself or herself
682682 to the seller as a member of a group or
683683 organization entitled to a price reduction
684684 or discount; provided, a "preferred
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736736 customer" card that is available to any
737737 patron does not constitute membership in
738738 such a group, or
739739 (c) the price reduction or discount is
740740 identified as a third-party price reduction
741741 or discount on the invoice received by the
742742 purchaser or on a coupon, certificate or
743743 other documentation presented by the
744744 purchaser;
745745 13. a. "Maintaining a place of business in this state " means
746746 and shall be presumed to include:
747747 (1) (a) utilizing or maintaining in this state,
748748 directly or by subsidiary, an office,
749749 distribution house, sales house, warehouse,
750750 or other physical place of business, whether
751751 owned or operated by the vendor or any other
752752 person, other than a common carrier a cting
753753 in its capacity as such, or
754754 (b) having agents operating in this state,
755755 whether the place of business or agent
756756 is within this state temporarily or
757757 permanently or whether the person or
758758 agent is authorized to do business
759759 within this state, and
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811811 (2) the presence of any person, other than a common
812812 carrier acting in its capacity as such, that has
813813 substantial nexus in this state and that:
814814 (a) sells a similar line of products as the
815815 vendor and does so under the same or a
816816 similar business name,
817817 (b) uses trademarks, service marks or trade
818818 names in this state that are the same
819819 or substantially similar to those used
820820 by the vendor,
821821 (c) delivers, installs, assembles or
822822 performs maintenance services for the
823823 vendor,
824824 (d) facilitates the vendor 's delivery of
825825 property to customers in the state by
826826 allowing the vendor's customers to pick
827827 up property sold by the vendor at an
828828 office, distribution facility,
829829 warehouse, storage place or similar
830830 place of business maintained by the
831831 person in this state, or
832832 (e) conducts any other ac tivities in this state
833833 that are significantly associated with the
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885885 vendor's ability to establish and maintain a
886886 market in this state for the vendor 's sale.
887887 b. The presumptions in division s (1) and (2) of
888888 subparagraph a of this paragraph may be rebutted by
889889 demonstrating that the person's activities in this
890890 state are not significantly associated with the
891891 vendor's ability to establish and maintain a market in
892892 this state for the vendor 's sales.
893893 c. Any ruling, agreement or contract, whether written or
894894 oral, express or implied, between a person and
895895 executive branch of this state, or any other state
896896 agency or department, stating, agreeing or ruling that
897897 the person is not "maintaining a place of bu siness in
898898 this state" or is not required to collect sales and
899899 use tax in this state despite the presence of a
900900 warehouse, distribution center or fulfillment center
901901 in this state that is owned or operated by the vendor
902902 or an affiliated person of the vendor s hall be null
903903 and void unless it is specifically approved by a
904904 majority vote of each house of the Oklahoma
905905 Legislature;
906906 14. "Manufacturing" means and includes the activity of
907907 converting or conditioning tangible personal property by changing
908908 the form, composition, or quality of character of some existing
909909
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960960 material or materials , including natural resources, by p rocedures
961961 commonly regarded by the average person as manufacturing,
962962 compounding, processing or assembling, into a material or materials
963963 with a different form or use. "Manufacturing" shall also include
964964 the manufacturing, compounding, processing or fabricati on of
965965 materials into articles of tangi ble personal property according to
966966 the special order of a customer (custom order manufac turing) by
967967 manufacturers classified as operating in North American Industry
968968 Classification System (NAICS) Sectors 32 and 33, but does not
969969 include such custom order manufacturing by manufacturers classified
970970 in other NAICS code sectors. "Manufacturing" does not include
971971 extractive industrial activities such as mining, quarrying, logging,
972972 and drilling for oil, gas and water, nor oil and gas field
973973 processes, such as natural pressure reduction, mechanical
974974 separation, heating, cooling, dehydration and compression;
975975 15. "Manufacturing operation" means the designing,
976976 manufacturing, compounding, processing, assemb ling, warehousing, or
977977 preparing of articles for sale as tangible personal property. A
978978 manufacturing operation begins at the point where the materials
979979 enter the manufacturing site and ends at the point where a finished
980980 product leaves the manufacturing site . "Manufacturing operation"
981981 does not include administration, sales, distribution,
982982 transportation, site construction, or site maintenance. Extractive
983983 activities and field processe s shall not be deemed to be a part of a
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10351035 manufacturing operation even when pe rformed by a person otherwise
10361036 engaged in manufacturing;
10371037 16. "Manufacturing site" means a location where a manufacturing
10381038 operation is conducted, including a location consisting of one or
10391039 more buildings or structures in an area owned, leased, or controlled
10401040 by a manufacturer;
10411041 17. "Over-the-counter drug" means a drug that contains a label
10421042 that identifies the product as a drug as required by 21 C.F.R.,
10431043 Section 201.66. The over -the-counter-drug label includes:
10441044 a. a "Drug Facts" panel, or
10451045 b. a statement of the "active ingredient(s)" with a list
10461046 of those ingredients contained in the compound,
10471047 substance or preparation;
10481048 18. "Person" means any individual, company, partnership, joint
10491049 venture, joint agreement, association, mutual or otherwise, limited
10501050 liability company, corporation, estate, trust, business trust,
10511051 receiver or trustee appointed by any state or federal court or
10521052 otherwise, syndicate, this state, any county, city, municipality,
10531053 school district, any other political subdivision of the state, or
10541054 any group or combination acting as a unit, i n the plural or singular
10551055 number;
10561056 19. "Prescription" means an order, formula or recipe issued in
10571057 any form of oral, written, electronic, or other mean s of
10581058
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11091109 transmission by a duly licensed "practitioner" as defined in Section
11101110 1357.6 of this title;
11111111 20. "Prewritten computer software " means "computer software",
11121112 including prewritten upgrades, which is not designed and developed
11131113 by the author or other creator to the specifications of a specific
11141114 purchaser. The combining of two or mor e prewritten computer
11151115 software programs or prewritten portions thereof does not cause the
11161116 combination to be other than prewritten computer software.
11171117 Prewritten software includes s oftware designed and developed by the
11181118 author or other creator to the specifi cations of a specific
11191119 purchaser when it is sold to a person other than the purchaser.
11201120 Where a person modifies or enhances computer software of which the
11211121 person is not the author o r creator, the person shall be deemed to
11221122 be the author or creator only of su ch person's modifications or
11231123 enhancements. Prewritten software or a prewritten portion thereof
11241124 that is modified or enhanced to any degree, where such modification
11251125 or enhancement is designed and developed to the specifications of a
11261126 specific purchaser, rema ins prewritten software; provid ed, however,
11271127 that where there is a reasonable, separately stated charge or an
11281128 invoice or other statement of the price given to the purchaser for
11291129 such modification or enhancement, such modification or enhancement
11301130 shall not constitute prewritten computer sof tware;
11311131 21. "Repairman" means any person who performs any repair
11321132 service upon tangible personal property of the consumer, whether or
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11841184 not the repairman, as a necessary and incidental part of performing
11851185 the service, incorporate s tangible personal property be longing to or
11861186 purchased by the repairman into the tangible personal property being
11871187 repaired;
11881188 22. "Sale" means the transfer of either title or posses sion of
11891189 tangible personal property for a valuable consideration regardless
11901190 of the manner, method, instrumen tality, or device by which the
11911191 transfer is accomplished in this state, or other transactions as
11921192 provided by this paragraph, including but not limited to:
11931193 a. the exchange, barter, lease, or rental of tangible
11941194 personal property resulting in the transfer of t he
11951195 title to or possession of the property,
11961196 b. the disposition for consumption or use in any business
11971197 or by any person of all goods, wares, merchandis e, or
11981198 property which has been purchased for resale,
11991199 manufacturing, or furthe r processing,
12001200 c. the sale, gift, exchange, or other disposition of
12011201 admission, dues, or fees to clubs, places of
12021202 amusement, or recreational or athletic events or for
12031203 the privilege of having access to or the use of
12041204 amusement, recreational, athletic or entert ainment
12051205 facilities,
12061206 d. the furnishing or rendering of services taxable under
12071207 the Oklahoma Sales Tax Code, and
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12591259 e. any use of motor fuel or diesel fuel by a supplier, as
12601260 defined in Section 500.3 of this title, upon which
12611261 sales tax has not previously been pai d, for purposes
12621262 other than to propel motor vehicles over the public
12631263 highways of this state. Motor fuel or diesel fuel
12641264 purchased outside the state and used for purposes
12651265 other than to propel motor vehicles over the public
12661266 highways of this state shall not co nstitute a sale
12671267 within the meaning of this paragraph;
12681268 23. "Sale for resale" means:
12691269 a. a sale of tangible personal property to any purchaser
12701270 who is purchasing tangible personal pro perty for the
12711271 purpose of reselling it within the geographical limits
12721272 of the United States of America or its territories or
12731273 possessions, in the normal course of business either
12741274 in the form or condition in which it is purchased or
12751275 as an attachment to or inte gral part of other tangible
12761276 personal property,
12771277 b. a sale of tangible persona l property to a purchaser
12781278 for the sole purpose of the renting or leasing, within
12791279 the geographical limits of the United States of
12801280 America or its territories or possessions, of the
12811281 tangible personal property to another person by the
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13331333 purchaser, but not if inc idental to the renting or
13341334 leasing of real estate,
13351335 c. a sale of tangible goods and products within this
13361336 state if, simultaneously with the sale, the vendor
13371337 issues an export bill of l ading, or other
13381338 documentation that the point of delivery of such goods
13391339 for use and consumption is in a fore ign country and
13401340 not within the territorial confines of the United
13411341 States. If the vendor is not in the business of
13421342 shipping the tangible goods and pr oducts that are
13431343 purchased from the vendor, the buyer or purchaser of
13441344 the tangible goods and products is res ponsible for
13451345 providing an export bill of lading or other
13461346 documentation to the vendor from whom the tangible
13471347 goods and products were purchased showing that the
13481348 point of delivery of such goods for use and
13491349 consumption is a forei gn country and not within the
13501350 territorial confines of the United States, or
13511351 d. a sales of any carrier access services, right of
13521352 access services, telecommunications services to be
13531353 resold, or telecommunications used in the subsequent
13541354 provision of, use as a c omponent part of, or
13551355 integrated into, end-to-end telecommunications
13561356 service;
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14071407
14081408 24. "Tangible personal property " means personal property that
14091409 can be seen, weighed, measured, felt, or touched or that is in any
14101410 other manner perceptible to the senses. "Tangible personal
14111411 property" includes electricity, water, gas, steam and prewritten
14121412 computer software. This definition shall be applicable only for
14131413 purposes of the Oklahoma Sales Tax Code ;
14141414 25. "Taxpayer" means any person liable to pay a tax imposed by
14151415 the Oklahoma Sales Tax Code;
14161416 26. "Tax period" or "taxable period" means the calendar period
14171417 or the taxpayer's fiscal period for which a taxpayer has obtained a
14181418 permit from the Tax Commissio n to use a fiscal period in lieu of a
14191419 calendar period;
14201420 27. "Tax remitter" means any person required to col lect,
14211421 report, or remit the tax imposed by the Oklahoma Sales Tax Code. A
14221422 tax remitter who fails, for any reason, to collect, report, or remit
14231423 the tax shall be considered a taxpayer for purposes of assessment,
14241424 collection, and enforcement of the tax imposed by the Oklahoma Sales
14251425 Tax Code; and
14261426 28. "Vendor" means:
14271427 a. any person making sales of tangible personal property
14281428 or services in this state, the gro ss receipts or gross
14291429 proceeds from which are taxed by the Oklahoma Sales
14301430 Tax Code,
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14821482 b. any person maintainin g a place of business in this
14831483 state and making sales of tangible personal property
14841484 or services, whether at the place of business or
14851485 elsewhere, to persons within this state, the gross
14861486 receipts or gross proceeds from which are taxed by the
14871487 Oklahoma Sales Tax Code,
14881488 c. any person who solicits business by employees,
14891489 independent contractors, agents, or other
14901490 representatives in this state, and thereby makes s ales
14911491 to persons within this state of tangible personal
14921492 property or services, the gross receipts or gross
14931493 proceeds from which are taxed by the Oklahoma Sales
14941494 Tax Code, or
14951495 d. any person, pursuant to an agreement with the person
14961496 with an ownership interest in or title to tangible
14971497 personal property, who has been entrusted with the
14981498 possession of any such property and has the power to
14991499 designate who is to obtain title, to physically
15001500 transfer possession of, or otherwise make sales of the
15011501 property.
15021502 SECTION 2. AMENDATORY 68 O.S. 2021, Section 1359, is
15031503 amended to read as follows:
15041504 Section 1359 Exemptions - Manufacturing.
15051505
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15561556 There are hereby specifically exempted from the tax levied by
15571557 Section 1350 et seq. of this title:
15581558 1. Sales of goods, wares, merchandise, tangible personal
15591559 property, machinery and equipment to a manufacturer for use in a
15601560 manufacturing operation. The sales for use in a manufacturing
15611561 operation shall be exempt for any manufacturer engaged in
15621562 manufacturing as defined in paragraph 14 of Section 1352 of this
15631563 title. Goods, wares, merchandise, property, machi nery and equipment
15641564 used in a nonmanufacturing activity or process as set forth in
15651565 paragraph 14 of Section 1352 of this title shall not be eligible for
15661566 the exemption provided for in this subsection by virtue of the
15671567 activity or process being performed in con junction with or
15681568 integrated into a manufacturing operation.
15691569 For the purposes of this paragraph, sales made to any person,
15701570 firm or entity that has entered in to a contractual relationship for
15711571 the construction and improvement of manufacturing goods, wares,
15721572 merchandise, property, machinery and equipment for use in a
15731573 manufacturing operation shall be considered sales made to a
15741574 manufacturer which is defined or class ified in the North American
15751575 Industry Classification System (NAICS) Manual under Industry Group
15761576 No. 324110. Such purchase shall be evidenced by a copy of the sales
15771577 ticket or invoice to be retained by the vendor indicating that the
15781578 purchases are made for an d on behalf of such manufacturer and set
15791579 out the name of such manufacturer as well as include a copy of the
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16311631 Manufacturing Exemption Permit of the manufacturer. Any person who
16321632 wrongfully or erroneously certifies that purchases are being made on
16331633 behalf of such manufacturer or who otherwise violates this paragraph
16341634 shall be guilty of a misdemeanor and upon conviction thereof shall
16351635 be fined an amount equal to double the amount of sales tax involved
16361636 or incarcerated for not more than sixty (60) days or both;
16371637 2. Ethyl alcohol when sold and used for the purpose of blending
16381638 same with motor fuel on which motor fue l tax is levied by Section
16391639 500.4 of this title;
16401640 3. Sales of containers when sold to a person regularly engaged
16411641 in the business of reselling empty or filled containers or when
16421642 purchased for the purpose of packaging raw products of farm, garden,
16431643 or orchard for resale to the consumer or processor. This exemption
16441644 shall not apply to the sale of any containers used more than once
16451645 and which are ordinarily known as returnable containers, except
16461646 returnable soft drink bottles and the cartons, crates, pallets, and
16471647 containers used to transport returnable soft drink bottles. Each
16481648 and every transfer of title or possession of such returnable
16491649 containers in this state to an y person who is not regularly engaged
16501650 in the business of selling, reselling or otherwise transferrin g
16511651 empty or filled containers shall be taxable under this Code.
16521652 Additionally, this exemption shall not apply to the sale of labels
16531653 or other materials delive red along with items sold but which are not
16541654
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17051705 necessary or absolutely essential to the sale of the sol d
17061706 merchandise;
17071707 4. Sales of or transfers of title to or possession of any
17081708 containers, after June 30, 1987, used or to be used more than once
17091709 and which are ordinarily known as returnable containers and which do
17101710 or will contain beverages defined by paragraph s 4 and 14 of Section
17111711 506 of Title 37 of the Oklahoma Statutes, or water for human
17121712 consumption and the cartons, crates, pallets, and containers used to
17131713 transport such returnable containers;
17141714 5. Sale of tangible personal property when sold by the
17151715 manufacturer to a person who transports it to a state other than
17161716 Oklahoma for immediate and exclusive use in a state other than
17171717 Oklahoma. Provided, no sales at a ret ail outlet shall qualify for
17181718 the exemption under this paragraph;
17191719 6. Machinery, equipment, fuels and chemicals or other materials
17201720 incorporated into and directly used or consumed in the process of
17211721 treatment to substantially reduce the volume or harmful prop erties
17221722 of hazardous waste at treatment facilities specifically permitted
17231723 pursuant to the Oklahoma Ha zardous Waste Management Act and operated
17241724 at the place of waste generation, or facilities approved by the
17251725 Department of Environmental Quality for the cleanu p of a site of
17261726 contamination. The term "hazardous" waste may include low -level
17271727 radioactive waste fo r the purpose of this paragraph;
17281728
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17791779 7. Except as otherwise provided by subsection I of Section 3658
17801780 of this title pursuant to which the exemption authorized b y this
17811781 paragraph may not be claimed, sales of tangible personal property to
17821782 a qualified manufacturer or distributor to be consumed or
17831783 incorporated in a new manufacturing or distribution facility or to
17841784 expand an existing manufacturing or distribution facili ty. For
17851785 purposes of this paragraph, sales made to a contractor or
17861786 subcontractor that has previously entered into a contractual
17871787 relationship with a qualified manufacturer or distributor for
17881788 construction or expansion of a manufacturing or distribution
17891789 facility shall be considered sales made to a qualified manufacturer
17901790 or distributor. For the purposes of this paragraph, "qualified
17911791 manufacturer or distributor " means:
17921792 a. any manufacturing enterprise whose total cost of
17931793 construction of a new or expanded facilit y exceeds the
17941794 sum of Five Million Dollars ($5,000,000.00) and in
17951795 which at least one hundred (100) ne w full-time-
17961796 equivalent employees, as certified by the Oklahoma
17971797 Employment Security Commission, are added and
17981798 maintained for a period of at least thirty -six (36)
17991799 months as a direct result of the new or expanded
18001800 facility,
18011801 b. any manufacturing enterprise whos e total cost of
18021802 construction of a new or expanded facility exceeds the
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18541854 sum of Ten Million Dollars ($10,000,000.00) and the
18551855 combined cost of construction mat erial, machinery,
18561856 equipment and other tangible personal property exempt
18571857 from sales tax under the pro visions of this paragraph
18581858 exceeds the sum of Fifty Million Dollars
18591859 ($50,000,000.00) and in which at least seventy -five
18601860 (75) new full-time-equivalent employees, as certified
18611861 by the Oklahoma Employment Security Commission, are
18621862 added and maintained for a peri od of at least thirty-
18631863 six (36) months as a direct result of the new or
18641864 expanded facility,
18651865 c. any manufacturing enterprise whose total cost of
18661866 construction of an expanded facility exceeds the sum
18671867 of Three Hundred Million Dollars ($300,000,000.00) and
18681868 in which the manufacturer has and maintains an average
18691869 employment level of at least one thousand seven
18701870 hundred fifty (1,750) full -time-equivalent employees,
18711871 as certified by the Employment Security Commission, or
18721872 d. any enterprise primarily engaged in the general
18731873 wholesale distribution of groceries defined or
18741874 classified in the North American Industry
18751875 Classification System (NAICS) Manual under Industry
18761876 Groups No. 4244 and 4245 and which has at least
18771877 seventy-five percent (75%) of its total sales to in -
18781878
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19291929 state customers or buyers and whose total cost of
19301930 construction of a new or expanded facility exceeds the
19311931 sum of Forty Million Dollars ($40,000,000.00) with
19321932 such construction commencing on or after July 1, 2005,
19331933 and before December 31, 2005, and which at least fifty
19341934 new full-time-equivalent employees, as certified by
19351935 the Oklahoma Employment Security Commission, are added
19361936 and maintained for a period of at least thirty -six
19371937 (36) months as a direct result of the new or expanded
19381938 facility.
19391939 For purposes of this paragraph, the to tal cost of construction
19401940 shall include building and construction material and engineering and
19411941 architectural fees or charges directly associated with the
19421942 construction of a new or expanded facility. The total cost of
19431943 construction shall not include attorney fees. For purposes of
19441944 subparagraph c of this paragraph, the total cost of construction
19451945 shall also include the cost of qualified depreciable property as
19461946 defined in Section 2357.4 of this title and labor services performed
19471947 in the construction of an expanded facility. For the purpose of
19481948 subparagraph d of this paragraph, the total cost of construction
19491949 shall also include the cost of all parking, security and doc k
19501950 structures or facilities necessary to manage, process or secure
19511951 vehicles used to receive and/or di stribute groceries through such a
19521952 facility. The employment requirement of this paragraph can be
19531953
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20042004 satisfied by the employment of a portion of the required nu mber of
20052005 new full-time-equivalent employees at a manufacturing or
20062006 distribution facility that is relat ed to or supported by the new or
20072007 expanded manufacturing or distribution facility as long as both
20082008 facilities are owned by one person or business entity. For purposes
20092009 of this section, "manufacturing facility" shall mean building and
20102010 land improvements used i n manufacturing as defined in Section 1352
20112011 of this title and shall also mean building and land improvements
20122012 used for the purpose of packing, repackaging, la beling or assembling
20132013 for distribution to market, products at least seventy percent (70%)
20142014 of which are made in Oklahoma by the same company but at an off -
20152015 site, in-state manufacturing or distribution facility or facilities.
20162016 It shall not include a retail out let unless the retail outlet is
20172017 operated in conjunction with and on the same site or premises as the
20182018 manufacturing facility. Up to ten percent (10%) of the square feet
20192019 of a manufacturing or distribution facility building may be devoted
20202020 to office space used to provide clerical support for the
20212021 manufacturing operation. Such ten percent (10%) may be in a
20222022 separate building as long as it is part of the same contiguous tract
20232023 of property on which the manufacturing or distribution facility is
20242024 located. Only sales of tangible personal property made after June
20252025 1, 1988, shall be eligible for the exemption provided by this
20262026 paragraph. The exemption authorized pursuant to subparagraph d of
20272027 this paragraph shall only become effective when the governing body
20282028
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20792079 of the municipality in which the enterprise is located approves a
20802080 resolution expressing the municipality 's support for the
20812081 construction for such new or expanded facility. Upon approval by
20822082 the municipality, the municipality shall forward a copy of such
20832083 resolution to the Oklahoma Tax Commission;
20842084 8. Sales of tangible personal property purchased and used by a
20852085 licensed radio or television station in broadcasting. This
20862086 exemption shall not apply unless such machinery and equipment is
20872087 used directly in the manufacturing proces s, is necessary for the
20882088 proper production of a broadcast signal or is such that the failure
20892089 of the machinery or equipment to operate would cause broadcasting to
20902090 cease. This exemption begins with the equipment used in producing
20912091 live programming or the elec tronic equipment directly behind the
20922092 satellite receiving dish or antenna, and ends with the transmis sion
20932093 of the broadcast signal from the broadcast antenna system. For
20942094 purposes of this paragraph, "proper production" shall include, but
20952095 not be limited to, m achinery or equipment required by Federal
20962096 Communications Commission rules and regulations;
20972097 9. Sales of tangible personal property purchased or used by a
20982098 licensed cable television operator in cablecasting. This exemption
20992099 shall not apply unless such machin ery and equipment is used directly
21002100 in the manufacturing process, is necessary for the proper product ion
21012101 of a cablecast signal or is such that the failure of the machinery
21022102 or equipment to operate would cause cablecasting to cease. This
21032103
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21542154 exemption begins wit h the equipment used in producing local
21552155 programming or the electronic equipment behind the satellite
21562156 receiving dish, microwave tower or antenna, and ends with the
21572157 transmission of the signal from the cablecast head -end system. For
21582158 purposes of this paragrap h, "proper production" shall include, but
21592159 not be limited to, machinery or equipment required by Fede ral
21602160 Communications Commission rules and regulations;
21612161 10. Sales of packaging materials for use in packing, shipping
21622162 or delivering tangible personal property for sale when sold to a
21632163 producer of agricultural products. This exemption shall not apply
21642164 to the sale of any packaging material which is ordinarily known as a
21652165 returnable container;
21662166 11. Sales of any pattern used in the process of manufacturing
21672167 iron, steel or other metal castings. The exemption provided by this
21682168 paragraph shall be applicable irrespectiv e of ownership of the
21692169 pattern provided that such pattern is used in the commercial
21702170 production of metal castings;
21712171 12. Deposits or other charges made and whi ch are subsequently
21722172 refunded for returnable cartons, crates, pallets, and containers
21732173 used to transport cement and cement products;
21742174 13. Beginning January 1, 1998, machinery, electricity, fuels,
21752175 explosives and materials, excluding chemicals, used in the min ing of
21762176 coal in this state;
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22282228 14. Deposits, rent or other charges made for returnable
22292229 cartons, crates, pallets, and containers used to transport mushrooms
22302230 or mushroom products from a farm for resal e to the consumer or
22312231 processor;
22322232 15. Sales of tangible person al property and services used or
22332233 consumed in all phases of the extraction and manufacturing of
22342234 crushed stone and sand, including but not limited to site
22352235 preparation, dredging, overburden removal, explosive placement and
22362236 detonation, onsite material hauling and/or transfer, material
22372237 washing, screening and/or crushing, product weighing and site
22382238 reclamation; and
22392239 16. Sale, use or consumption of paper stock and other raw
22402240 materials which are manufactured into commercial printed material in
22412241 this state primarily fo r use and delivery outside this state. For
22422242 the purposes of this section, "commercial printed materi al" shall
22432243 include magazines, catalogs, retail inserts and direct mail.
22442244 SECTION 3. This act shall become effective July 1, 2024.
22452245 SECTION 4. It being immediately necessary for the preservatio n
22462246 of the public peace, h ealth or safety, an emergency is hereby
22472247 declared to exist, by reason whereof thi s act shall take effect and
22482248 be in full force from and after its passage and approval.
22492249
22502250 59-2-8912 AO 12/08/23