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STATE OF OKLAHOMA
2nd Session of the 59th Legislature (2024)
SENATE BILL 1484 By: Garvin
AS INTRODUCED
An Act relating to sales tax; amending 68 O.S. 2021,
Section 1357, as last amended by Section 1, Chapter
344, O.S.L. 2023 (68 O.S. Supp. 2023, Section 1357),
which relates to exemptions; providing exemption for
certain persons granted a disability benefit by
certain state retirement systems for certain injury;
limiting amount of sales qualifying for exemption;
requiring sales tax in excess of limit to be treated
as liability; authorizing recovery of certain
liability; requiring promulgation of certain rules;
requiring issuance of exemption car d; authorizing
application for new exemption card; updating
statutory language; and providing an effective date.
BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
SECTION 1. AMENDATORY 68 O.S. 2021, Section 1357, as
last amended by Section 1, Chapter 344, O.S.L. 2023 (68 O.S. Supp.
2023, Section 1357), is amend ed to read as follows:
Section 1357. Exemptions – General.
There are hereby specifically exempted from 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 vehi cles;
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2. Transportation of persons where the fare of each person does
not exceed One Dollar ($1.00), or local transportation of persons
within the corporate limits of a municipality except by taxicabs;
3. Sales for resale to persons engaged in the busine ss of
reselling the articles purchased, whether within or wi thout the
state, provided that such sales to residents of this state are made
to persons to whom sales tax permits have been issued as provided in
the Oklahoma Sales Tax Code. This exemption shal l not apply to the
sales of articles made to persons holding permi ts when such persons
purchase items for their use and which they are not regularly
engaged in the business of reselling; neither shall th is exemption
apply to sales of tangible personal prop erty to peddlers, solicitors
and other salespersons who do n ot 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 the
Oklahoma Sales Tax Code. The purchase of motor fuel or diesel fuel
is exempt from sales tax when th e 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 sporting and
entertainment events, and sales of any ad vertising, 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 paragraph 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 t his section, via the Internet,
electronic display devices or through the electronic media including
radio, public address or broadcast systems, televisi on (whether
through closed circuit broadcasting systems or otherwise), and cable
and satellite televisio n, 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 v endor that
the purchaser is regularly engaged in the business of raising such
animal life and that the items purchased will be used only in such
business. The vendor shall certify to the Oklahoma Tax Commis sion
that the price of the items has been reduced to grant t he full
benefit of the exemption. Violation hereof by the purchaser or
vendor shall be a mi sdemeanor;
8. Sale of natural or artificial gas and electricity, and
associated delivery or transmissio n 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 1357.6
of this title, sales of drugs sold pursuant to a prescriptio n
written for the treatment of human beings by a person licensed 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 chemical drums to any person
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 na pkins, paper cups,
disposable hot containers, 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 requirement of the
exemption as a condition for participatio n by the state in the
federal food stamp program;
13. Sales of food or food products, or any equipment or
supplies used in the preparation of the food or food products t o 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 provides 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 Revenue Co de, 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 personal pro perty or services to or
by organizations which 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),
and:
(1) are primarily involved in the collection and
distribution of food a nd 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 t o
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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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 paragrap h, “qualified
aircraft maintenance or manufacturing facility ” means a new or
expanding facility primarily engaged in aircraft repair, building ,
or rebuilding whether or not on a factory basis, whose total cost of
construction exceeds the sum of Five Millio n Dollars ($5,000,000.00)
and which employs at least two hundred fifty (250) ne w 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 f or by this paragraph, the cost
of the items purchased by the q ualified aircraft maintenance or
manufacturing facility shall equal or exceed the sum of Two Million
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 manufactu ring facility as defined in
paragraph 16 of this section. For purposes of this paragraph, sales
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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 con sidered sales made to a qualified
aircraft maintenance or manufacturing facility;
18. Sales of the following tel ecommunications services:
a. Interstate and International “800 service”. “800
service” means a “telecommunications service ”
telecommunications s ervice that allows a caller to
dial a toll-free number without 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” telecommunications service purchased by a
subscriber that allows the subscriber ’s customers to
call in to the subscriber ’s prerecorded announcement
or live service. “900 service” 900 service does not
include the charge for: collection services provided
by the seller of the “telecommunications services ”
telecommunications services to the subscriber, or
service or product sold by the subs criber to the
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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 ” 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 which such channel or
channels are connected, and includes switching
capacity, extension lines, stations and any other
associated services that are provided in connecti on
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”
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 t ransmission,
conveyance, or routing,
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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 includi ng charges
to fund the Oklahoma Universal Service Fund, th e
Oklahoma Lifeline Fund and the Oklahoma High Cost
Fund, and
g. Telecommunications nonrecurring charges including but
not limited to the installation, connecti on, change,
or initiation of telecommu nications services 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 aircra ft and aircraft parts provided such sales
occur at a qualified aircraft maintenanc e facility. As used in this
paragraph, “qualified aircraft maintenance facility ” means a
facility operated by an air common carrier inc luding 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 thousand (2,000) full -time-equivalent
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employees in the preceding year as certified by the Oklah oma
Employment Security Commission and which is primarily related to the
fabrication, repair, alterati on, modification, refurbishing,
maintenance, building, or rebuilding of commercia l aircraft or
aircraft parts used in air common carriag e. 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 1504. Beginning July 1, 2012, sales of
machinery, tools, supplies, equipment, and related tangible personal
property and services used or consumed in the repair, remode ling, or
maintenance of aircraft, aircraft engines or aircraft component
parts which occur at a qualified aircraft maintenance facility;
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 Industry Group Numbers
7372 and 7373 of the Standard Industrial
Classification (SIC) Manual, latest version, which
derive at least fifty pe rcent (50%) of their annual
gross revenues from the sale of a produ ct or service
to an out-of-state buyer or consumer , and
b. as defined under Industrial Industry Group Number 7374
of the SIC Manual, latest version, which derive at
least eighty percent (80 %) of their annual gross
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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 with the Tax Commission stating that the
facility so qualifies and such information as required by the Tax
Commission. For purposes of determining whether a nnual gross
revenues are derived from sales to out -of-state buyers or cons umers,
all sales to the federal government shall be cons idered 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
device” shall have the same meaning as provide d in Section 1357.6 of
this title, but shall not include corrective eye glas ses, contact
lenses, or hearing aids;
23. Sales of tangible personal property or serv ices to a motion
picture or television production company to be used or co nsumed in
connection with an eligible production. For purposes of this
paragraph, “eligible production” means a documentary, special, music
video or a television commercial or television 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 pictur e intended for
theatrical release or for network or national or regional
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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 documentation and information
required to be submitted pursuant to rules promulgated by the Tax
Commission;
24. Sales of diesel fuel sol d for consumption by commercial
vessels, barges and other commercial watercraft;
25. Sales of tangible personal property or s ervices to tax-
exempt independent nonprofit biomedical research foundation s that
provide educational programs for Oklahoma science students and
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 tr ansfers the equipment at no
charge or for a discounted charge to a consumer as part of a
promotional package or as an induceme nt to commence or continue a
contract for wireless telecommunications services;
27. Effective January 1, 1991 , leases of rail tra nsportation
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, ai rcraft interior modification, and pa int, and
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sales of services employed in t he repair, modification, and
replacement of parts of aircraft engines, aircraft frame and
interior repair and modification, and paint;
29. Sales of materials a nd supplies to the o wner or operator of
a ship, motor vessel, or barge that is used in interstate o r
international commerce if the materials and supplies:
a. are loaded on the ship, motor 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;
30. Sales of tangible personal prope rty 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 who is not required to
be licensed pursuant to the Transient Merchant Lic ensing 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) consecutiv e days,
b. the sale must be conducted within six ( 6) months of
the date of death of th e decedent, and
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c. the exemption allowed by this paragraph shall not be
allowed for property t hat was not part of the
decedent’s estate;
31. Beginning January 1, 2004, sale s of electricity and
associated delivery and transmission services, when sold exclusively
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 de velopment 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
electronically” means delivered to the purchaser by means other than
tangible storage media;
33. Sales of modular dwelling uni ts when 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 purpos es 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;
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34. Sales of tangible personal property or servi ces to:
a. persons who are residents of 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 b een certified by the
United States Department of Veterans Affairs or its
successor to be in receipt 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 d isease
contracted while in such acti ve service and registered
with the veterans registry created by the Oklahoma
Department of Veterans Affairs ; provided, that if the
veteran received the sales tax exemption prior to
November 1, 2020, he or she shall be re quired to
register with the veterans 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 spo use 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
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benefit of an eligible perso n to a spouse of the
eligible person or to a member of the household in
which the eligible person r esides and who is
authorized to make purchase s on the person’s behalf,
when such eligible person is not present at the sale,
shall also be exempt for purposes of this paragraph.
The Oklahoma Tax Commission shall issue a separate
exemption card to a spo use 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 eligi ble person.
Sales qualifying for the exemption authorized by this
paragraph shall not exceed Twenty -five Thousand
Dollars ($25,000.00) per year per individual while the
disabled veteran is living. Sales qualifying for the
exemption authorized by this par agraph 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 claiming the
exemption authorized by this paragraph shall p rovide a
statement, executed under oath, that the total sales
amounts for which the exemption is applicable have n ot
exceeded Twenty-five Thousand Dollars ($25,000.00) per
year per living disabled veteran or One Thousand
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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 excess of the
authorized amount shall be treated as a direct sales
tax liability and may be recovered by the Tax
Commission in the same manner provided by law for
other taxes including p enalty and interest. The Tax
Commission shall promulgate any rules necessary t o
implement the provisi ons of this paragraph, which
shall include rules providing for the disclosure of
information about persons eligible for the exemption
authorized in this p aragraph to the Oklahoma
Department of Veteran’s Veterans Affairs, as
authorized in Section 205 of this title. For purposes
of the exemption authorized by this subparagraph, if
the disability determination that would have been made
while the disabled vete ran was still living is not
made final until after the death of the disabled
veteran, the exemption authorized by this subparagraph
may still be claimed by the surviving spouse;
35. Sales of electricity to the operator, specifically
designated by the Corp oration Commission, of a spacing uni t or lease
from which oil is produced or attempted to be produced using
enhanced recovery methods including, but not limited to, increased
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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 equipment required to inject or circulate
fluids in a producing formation for the purpose of forcing oil or
petroleum into a wellbore for eventual recovery and production from
the wellhead. In order to be eligible for the sales tax exemption
authorized by this paragraph, the total content of oil recovered
after the use of enhanced recovery methods shall not exceed one
percent (1%) by volume. The exemption authorized by this 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 intrastate charter and tour bus transportation.
As used in this paragraph, “intrastate charter and tour bus
transportation” means the transportation of pers ons from one
location in this state to another location in this state in a motor
vehicle which has been constructed in such a manner that it may
lawfully carry more than eighteen persons, and which is ordinarily
used or rented to carry persons for compensation. Provided, this
exemption shall not a pply to regularly scheduled bus transporta tion
for the general public;
37. Sales of vitamins, minerals, and dietary supplements by a
licensed chiropractor to a person who is th e patient of such
chiropractor at the physical location w here the chiropractor
provides chiropractic care or services to such patient. The
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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, merchandise, tan gible personal
property, machinery, and equipment to a web search portal located in
this state which derives at least eighty percent (80%) of its annual
gross revenue from the s ale of a product or service to an ou t-of-
state buyer or consumer. For purposes 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 addresse s 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 ru ral electric cooperat ive. For purposes of
this paragraph, sales made to a contrac tor or subcontractor that has
previously entered into a contractual relationship with a rural
electric cooperative for construction or exp ansion of a facility
shall be considered sales made to a rural electric coopera tive;
40. Sales of tangible personal property or services to a
business primarily engaged in the repair of consumer electronic
goods including, but not limited to, cell phones, compact disc
players, personal comp uters, MP3 players, d igital devices for the
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storage and retrieval of information t hrough hard-wired or wireless
computer or Internet connections, if the devices are sold to the
business by the original manufacturer of su ch devices and the
devices are repaired, refitted or refurbished for sale by th e entity
qualifying for the exemption authorized by this paragraph directly
to retail consumers or if the devices are sold to another business
entity for sale to retail consumer s;
41. On or after July 1, 2019, an d prior to July 1, 20 24, sales
or leases of rolling stock when sold or leased by t he manufacturer,
regardless of whether the purchaser is a public services corporation
engaged in business as a common carrier of property or passengers by
railway, for use or consumption by a common carrier directly i n the
rendition of public service. For purposes of this paragraph,
“rolling stock” means locomotives, autocars, and railroad cars and
“sales or leases” includes railroad car ma intenance and retrofitting
of railroad cars for their fur ther 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,
which legal tender is sold 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 pre cious metal content and not its form .
The exemption authorized by this paragraph shall not apply to
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fabricated metals that have been proces sed or manufactured for
artistic use or as jewelry ; and
43. Sales of tangible personal property or services to persons
who are residents of this stat e and are granted a disability
retirement benefit by the Oklahoma Police Pension and Retirement
System, Oklahoma Firefighters P ension and Retirement System,
Oklahoma Law Enforcement Retirement System, or Oklahoma wildlife
conservation retirement system for a disability incurred in the line
of duty. Sales qualifying for the exemption authorized by this
paragraph shall not exceed Twenty -five Thousand Dollars ($25,00 0.00)
per year per individual . If the amount of such exempt sales exceeds
such amount, the sales tax in excess of the authorized amount sh all
be treated as a direct sales tax liability and may be recovered 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 necessary to implement the provis ions of this
paragraph, which shall include rules providing for the disclosure of
a finding of fact and order granting d isability benefits by the
board of the applicable state retirement system for a disability
incurred in the line of duty . Persons qualifying for the exemption
provided pursuant to this paragraph shall receive an exemption card
which shall expire five (5) years from the date of issuance.
Persons qualifying for the exemption provided pursua nt to this
paragraph who possess an exemption card set to expire in less tha n
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six (6) months may apply for a new exemption card to be issued the
day the current exemption card expires.
SECTION 2. This act shall bec ome effective November 1, 2024.
59-2-2585 QD 12/15/2023 6:47:53 PM