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STATE OF OKLAHOMA
1st Session of the 59th Legislature (2023)
SENATE BILL 961 By: Kidd
AS INTRODUCED
An Act relating to agriculture sales tax exemption;
amending 68 O.S. 2021, Section 1358, which relates to
agriculture exemption; modifying definition; defining
terms; and providing an effective date .
BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
SECTION 1. AMENDATORY 68 O.S. 2021, Section 1358, is
amended to read as follow s:
Section 1358. Exemptions – Agriculture.
A. There are hereby specifically exempted from the tax levied
by Section 1350 et seq. of this title:
1. Sales of agricultural products produced in this state by the
producer thereof directly to the consumer or us er when such articles
are sold at or from a farm and not fr om some other place of
business, as follows:
a. farm, orchard, or garden products, and
b. dairy products sold by a dairy producer or farmer who
owns all the cows from which the dairy products
offered for sale are produced;
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provided, the provisions of this paragraph shall not be construed as
exempting sales by florists, nursery operators , or chicken
hatcheries, or sales of dairy products by any other business except
as set out herein;
2. Livestock, including cattle, horses, mules, or other
domestic or draft animals, sold by the producer by private treaty or
at a special livestock sale;
3. Sale of baby chicks, turkey poults , and starter pullets used
in the commercial pr oduction of chickens, turkeys, and eggs,;
provided, that the purchaser certifies, in writi ng, on the copy of
the invoice or sales ticket to be retained by the vendor that the
pullets will be used primarily for egg production;
4. Sale of salt, grains, tank age, oyster shells, mineral
supplements, limestone, and other generally recognized animal feeds
for the following purposes and subject to the following limitations:
a. feed which is fed to poultry and livestock , including
breeding stock and wool-bearing stock, for the purpose
of producing eggs, poultry, milk, or meat for human
consumption,
b. feed purchased in Oklahoma for the purpose of being
fed to and which is fed by the purchaser to horses,
mules or other domestic or draft animals us ed directly
in the producing and marketing of agricultural
products, and
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c. any stock tonics, water purifying products, stock
sprays, disinfectants , or other such agricultural
supplies.
“Poultry” shall not be construed to include any fowl other than
domestic fowl kept and rai sed for the market or production of eggs.
“Livestock” shall not be construed to include a ny pet animals such
as dogs, cats, birds , or such other fur-bearing animals. This
exemption shall only be granted and extended where the purchase r of
feed that is to be used and in fact is used for a purpose that would
bring about an exemption hereunder e xecutes an invoice or sales
ticket in duplicate on a form to be prescribed by the Oklahoma Tax
Commission. The purchaser may demand and receive a copy of the
invoice or sales ticket and the vendor shall retain a copy;
5. Sales of items to be and in fact used in the production of
agricultural products. Sale of the following items shall be subject
to the following limitations:
a. sales of agricultural fertilizer to an y person
regularly engaged, for profit, in the business of
farming or ranching,
b. sales of agricultural fertilizer to any person engaged
in the business of applying such materials on a
contract or custom basis to land owned or leased a nd
operated by persons regularly engaged, for profit, in
the business of farming or ranching. In addition to
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providing the vendor proof of eligibility as provided
in Section 1358.1 of this title, the purchaser shall
provide the name or names of such owner or lessee and
operator and the location of the lands on which said
materials are to be applied to each such l and,
c. sales of agricultural fertilizer, pharmaceuticals , and
biologicals to persons engaged in the business of
applying such materials on a cont ract or custom basis
shall not be considered to be sales to contractors
under this article, and said sales sha ll not be
considered to be taxable sales within the meaning of
the Oklahoma Sales Tax Code. As used in this section,
“agricultural fertilizer ”, “pharmaceuticals”, and
“biologicals” mean any substance sold and used for
soil enrichment or soil corrective pu rposes or for
promoting the growth and productivity of plants or
animals,
d. sales of agricultural seed or plants to any person
regularly engaged, for profit, in the business of
farming or ranching. This section shall not be
construed as exempting from sa les tax, seed which is
packaged and sold for use in noncommercial flower and
vegetable gardens, and
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e. sales of agricultural chemical pesticides t o any
person regularly engaged, for profit, in the business
of farming or ranching. For the purposes of this
subparagraph, “agricultural chemical pesticides ” shall
include any substance or mixture of substances
intended for preventing, destroying, repelli ng or
mitigating any insect, snail, slug, rodent, bird,
nematode, fungus, weed, or any other form of
terrestrial or aquatic plant or animal life or virus,
bacteria or other microorganism, except viruses,
bacteria or other microorganisms on or in living man ,
or any substance or mixture of substances intended for
use as a plant regulator, defoliant, or desiccant.
The exemption provided in this paragraph shall only be granted
and extended to the purchaser where the items are to be used and in
fact are used in the production of ag ricultural products;
6. Sale of farm machinery, repair parts thereto or fuel, oil,
lubricants, and other substances used for operation and maintenance
of the farm machinery to be used directly on a farm or ranch in the
production, cultivation, planting, s owing, harvesting, processing,
spraying, preservation or irrigation of any livestock, poul try,
agricultural, or dairy products produced from such lands. The
exemption specified in this paragraph shall apply to such farm
machinery, repair parts, or fuel, oil, lubricants, and other
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substances used by persons engaged in the business of custom
production, cultivation, planting, sowing, harvesting, processing,
spraying, preservation, or irrigation of any livestock, poultry,
agricultural, or dairy products for f armers or ranchers. The
exemption provided for herein shall not apply to motor vehicles;
7. Sales of supplies, machinery, and equipment to persons
regularly engaged in the business of raising evergreen trees for
retail sale in which s uch trees are cut do wn on the premises by the
consumer purchasing such tree. This exemption shall only be gra nted
and extended when the items in fact are used in the raising of such
evergreen trees; and
8. Sales of materials, supplies , and equipment to an
agricultural permit holder or to any person with whom the permit
holder has contracted to construct faciliti es which are or which
will be used directly in the production of any livestock , including,
but not limited to, facilities used in the production a nd storage of
feed for livestock owned by the permit holder. Any person making
purchases on behalf of the agr icultural permit holder 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 permit holder and set out the name and permit number
of such holder. Any pers on who wrongfully or erroneously certifies
that purchases are for an agricultural permit holder or who
otherwise violates this subsection shall be guilty of a misdemeanor
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and upon conviction thereof shall be punishable by a fine of an
amount equal to doubl e the amount of sales tax involved or
imprisonment in the county jail for not more than sixty (60) days or
by both such fine and imprisonment.
B. As used in this section and Section 1358.1 of this title:
1. “Agricultural products” shall include horses and timber; and
2. “Farming” or “farm” shall include the production of tim ber,
seedling production, and forestry management; and
3. “Ranching” or “ranch” shall include the business, or
facilities for the business, of raisi ng horses.
Provided, sales of items at race mee tings as defined in Section
200.1 of Title 3A of the Oklahoma Statutes shall not be exempt
pursuant to the provisions of this section and Section 1358.1 of
this title.
SECTION 2. This act shall become effective November 1, 202 3.
59-1-791 QD 1/19/2023 11:33:27 AM