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Oklahoma House Bill HB1295

Oklahoma 2025 Regular Session

Oklahoma House Bill HB1295 Compare Versions

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2828 STATE OF OKLAHOMA
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3030 1st Session of the 60th Legislature (2025)
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3232 HOUSE BILL 1295 By: Hays
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3838 AS INTRODUCED
3939
4040 An Act relating to revenue and taxation; amending 68
4141 O.S. 2021, Section 1355, as amended by Section 1,
4242 Chapter 370, O.S.L. 2023 (68 O.S. Su pp. 2024, Section
4343 1355), 2106, 1361, 1402, and 1404, as amended by
4444 Section 2, Chapter 370, O.S.L. 2023 (68 O.S. Supp.
4545 2024, Section 1404), which relate to motor vehicle
4646 excise taxes and sales tax; eliminating sales tax
4747 levy upon sale of motor vehicles; pro viding an
4848 effective date; and declaring an emergency .
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5454 BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
5555 SECTION 1. AMENDATORY 68 O.S. 2021, Section 1355, as
5656 amended by Section 1, Chapter 370, O.S.L. 2023 (68 O.S. S upp. 2024,
5757 Section 1355), is amended to read as follows:
5858 Section 1355. Exemptions - Subject to other tax.
5959 There are hereby specifically exempted from the tax levied
6060 pursuant to the provisions of Section 1350 et seq. of this title:
6161 1. Sale of gasoline, mo tor fuel, methanol, "M-85" which is a
6262 mixture of methanol and gasoline contain ing at least eighty-five
6363 percent (85%) methanol, compressed natural gas, liquefied natural
6464 gas, or liquefied petroleum gas on which the Motor Fuel Tax,
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9191 Gasoline Excise Tax, Speci al Fuels Tax, or the fee in lieu of
9292 Special Fuels Tax levied in Section 500.1 et seq., Section 601 et
9393 seq. or Section 701 et seq. of this title has been, or will be paid;
9494 2. For the sale of motor vehicles or any optional equipment or
9595 accessories attached to motor vehicles on which the Oklahoma Motor
9696 Vehicle Excise Tax levied in Sec tion 2101 et seq. of this title has
9797 been, or will be paid , all but a portion of the levy provided under
9898 Section 1354 of this title, equal to one and twenty -five-hundredths
9999 percent (1.25%) of the gross receipts of such sales. For the
100100 purposes of this paragraph, if the sale of a motor vehicle includes
101101 a trade-in, gross receipts shall be calculated based only on the
102102 difference between the value of the trade -in vehicle and the actual
103103 sales price of the vehicle being purchased. Provided, the sale of
104104 motor vehicles shall not be subject to any sales and use taxes
105105 levied by cities, counties, or other jurisdictions of the state ;
106106 3. Sale of crude petroleum or natural or casinghead gas, an d
107107 other products subject to gross production tax pursuant to the
108108 provisions of Section 1001 et seq. and Section 1101 et seq. of this
109109 title. This exemption shall not apply when such products are sold
110110 to a consumer or user for consumption or use, except whe n used for
111111 injection into the earth for the purpose of promoting or
112112 facilitating the production of oil or gas. This paragraph shall not
113113 operate to increase or repeal the gross production tax levied by the
114114 laws of this state;
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141141 4. Sale of aircraft on which the tax levied pursuant to the
142142 provisions of Sections 6001 through 6007 of this title has been, or
143143 will be paid or which are specifically exempt from such tax pursuant
144144 to the provisions of Section 6003 of this title;
145145 5. Sales from coin-operated devices on which the fee imposed by
146146 Sections 1501 through 1512 of this title has been pa id;
147147 6. Leases of twelve (12) months or more of motor vehicles in
148148 which the owners of the vehicles have paid the vehicle excise tax
149149 levied by Section 2103 of this title;
150150 7. Sales of charity game equipment on which a tax is levied
151151 pursuant to the Oklahoma Charity Games Act, Section 401 et seq. of
152152 Title 3A of the Oklahoma Statutes, or which is sold to an
153153 organization that is:
154154 a. a veterans' organization exempt from taxation pursuan t
155155 to the provisions of paragraph (4), (7), (8), (10), or
156156 (19) of subsection (c ) of Section 501 of the United
157157 States Internal Revenue Code of 1986, as amended, 26
158158 U.S.C., Section 501(c) et seq.,
159159 b. a group home for mentally disabled individuals exempt
160160 from taxation pursuant to the provisions of paragraph
161161 (3) of subsection (c) of Section 501 of the United
162162 States Internal Revenue Code of 1986, as amended, 26
163163 U.S.C., Section 501(c) et seq., or
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190190 c. a charitable health care organization which is exempt
191191 from taxation pursuant to the provisions of paragraph
192192 (3) of subsection (c) of Section 50 1 of the United
193193 States Internal Revenue Code of 1986, as amended, 26
194194 U.S.C., Section 501(c) et seq.;
195195 8. Sales of cigarettes or tobacco products to:
196196 a. a federally recognized Ind ian tribe or nation which
197197 has entered into a compact with the State of Oklahoma
198198 pursuant to the provisions of subsection C of Section
199199 346 of this title or to a licensee of such a tribe or
200200 nation, upon which the payment in lieu of taxes
201201 required by the comp act has been paid, or
202202 b. a federally recognized Indian tribe or nation or to a
203203 licensee of such a tribe or nation upon which the tax
204204 levied pursuant to the provisions of Section 349.1 or
205205 Section 426 of this title has been paid;
206206 9. Leases of aircraft upon which the owners have paid the
207207 aircraft excise tax levied by Section 6001 et seq. of this title or
208208 which are specifically exempt from such tax pursuant to the
209209 provisions of Section 6003 of this title;
210210 10. The sale of low -speed or medium-speed electrical vehicles
211211 on which the Oklahoma Motor Vehicle Excise Tax levied in Section
212212 2101 et seq. of this title has been or will be paid;
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239239 11. Effective January 1, 2005, sales of cigarettes on which the
240240 tax levied in Section 301 et seq. of this title or tobacco produc ts
241241 on which the tax levied in Section 401 et seq. of this title has
242242 been paid; and
243243 12. Sales of electricity at charging stations as defined by
244244 Section 6502 of this title when the electricity is sold by a
245245 charging station owner or operator for purposes of charging an
246246 electric vehicle as defined by Section 6502 of this title and the
247247 tax imposed pursuant to Section 6504 of this title is collected and
248248 remitted to the Oklahoma Tax Commission.
249249 SECTION 2. AMENDATORY 68 O.S. 2021, Section 2106, is
250250 amended to read as follows:
251251 Section 2106. (a) The excise tax levied by this article is in
252252 lieu of all other taxes on the transfer or the first registration in
253253 this state of vehicles, including the optional equipment and
254254 accessories attached the reto at the time of sale and sold as a part
255255 thereof, except:
256256 (1) Annual vehicle registration and license fees;
257257 (2) The fee of One Dollar ($1.00) for the issuance of a
258258 certificate of title; and
259259 (3) Any fee charged under the jurisdiction of the Corporatio n
260260 Commission; and
261261 (4) One and twenty-five-hundredths percent (1.25%) of the gross
262262 receipts upon which the tax is levied by Section 1354 of this title.
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289289 Provided, the sale of motor vehicles shall not be subject to any
290290 sales and use taxes levied by cities, counties or other
291291 jurisdictions of the state .
292292 (b) This section shall not reli eve any new or used motor
293293 vehicle dealer or any other vendor of vehicles from liability for
294294 the sales tax on all sales of accessories or optional equipment, or
295295 parts, which are not attached to, and sold as a part thereof and
296296 included in the sale of such vehicles.
297297 SECTION 3. AMENDATORY 68 O.S. 2021, Section 1361, is
298298 amended to read as follows:
299299 Section 1361. Consumer to pay tax - Vendor to collect tax -
300300 Penalties for failure to collect.
301301 A. 1. Except as otherwise provided by subse ction C of this
302302 section, the tax levied by Section 1350 et seq. of this title shall
303303 be paid by the consumer or user to the vendor as trustee for and on
304304 account of this state. Ex cept as otherwise provided by subsection C
305305 of this section, each and every vendor in this state shall collect
306306 from the consumer or user the full amount of the tax levied by
307307 Section 1350 et seq. of this title, or an amount equal as nearly as
308308 possible or practicable to the average equivalent thereof. Every
309309 person required to collect any tax imposed by Section 1350 et seq.
310310 of this title shall be personally liable for the tax.
311311 2. However, the Oklahoma Tax Commission shall relieve sellers
312312 or certified service providers that follow the requirements of this
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339339 section from the tax otherwise applicable if it is determined that
340340 the purchaser improperly claimed an exemption and to hold the
341341 purchaser liable for the nonpayment of tax. This relief from
342342 liability does not apply to:
343343 a. a seller or certified service provider (CSP) who
344344 fraudulently fails to collect tax,
345345 b. a seller who solicits purchasers to participate in the
346346 unlawful claim of an exemption, or
347347 c. a seller who accepts an exemption certificate when the
348348 purchaser claims an entity-based exemption when:
349349 (1) the subject of the transaction sought to be
350350 covered by the exemption certificate is actually
351351 received by the purchaser at a location operated
352352 by the seller, and
353353 (2) the Tax Commission provides an exemption
354354 certificate that clearly and affirmatively
355355 indicates that the claimed exemption is not
356356 available in this state.
357357 3. The Tax Commission shall relieve a seller or CSP of the tax
358358 otherwise applicable if the seller obtains a fully completed
359359 exemption certificate o r captures the relevant data elements
360360 required by the Tax Commission within ninety (90) days subsequent to
361361 the date of sale.
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388388 If the seller or CSP has not obtained an exemption certificate
389389 or all relevant data elements as provided by the Tax Commission, the
390390 seller may, within one hundred twenty (120) days subsequent to a
391391 request for substantiation, either prove that the transaction was
392392 not subject to tax by other means or obtain a fully completed
393393 exemption certificate from the purchaser, taken in good faith.
394394 The Tax Commission shall relieve a seller or CSP of the tax
395395 otherwise applicable if it obtains a blanket exemption certificate
396396 for a purchaser with which the seller has a recurring business
397397 relationship. The Tax Commission shall not request from the sell er
398398 or CSP renewal of blanket certificates or updates of exemption
399399 certificate information or data elements when there is a recurring
400400 business relationship between the buyer and seller. For purposes of
401401 this section, a recurring business relationship exists when a period
402402 of no more than twelve (12) months elapses between sales
403403 transactions.
404404 4. Upon the granting of relief from liability to the vendor as
405405 provided in this section, the purchaser shall be liable for the
406406 remittance of the tax, interest and penalt y due thereon and the Tax
407407 Commission shall pursue collection thereof from the purchaser in any
408408 manner in which sales tax may be collected from a vendor.
409409 B. Except as otherwise provided by subsection C of this
410410 section, vendors shall add the tax imposed by Section 1350 et seq.
411411 of this title, or the average equivalent thereof, to the sales
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438438 price, charge, consideration, gross receipts or gross proceeds of
439439 the sale of tangible personal property or services taxed by Section
440440 1350 et seq. of this title, and when a dded such tax shall constitute
441441 a part of such price or charge, shall be a debt from the consumer or
442442 user to vendor until paid, and shall be recoverable at law in the
443443 same manner as other debts.
444444 C. A person who has obtained a direct payment permit as
445445 provided in Section 1364.1 of this title shall accrue all taxes
446446 imposed pursuant to Section 1354 or 1402 of this title on all
447447 purchases made by the person pursuant to the permit at the time the
448448 purchased items are first used or consumed in a taxable manner and
449449 pay the accrued tax directly to the Oklahoma Tax Commission on
450450 reports as required by Section 1365 of this title.
451451 D. Except as otherwise provided by subsection C of this
452452 section, a vendor who willfully or intentionally fails, neglects or
453453 refuses to collect the full amount of the tax levied by Section 1350
454454 et seq. of this title, or willfully or intentionally fails, neglects
455455 or refuses to comply with the provisions of Section 1350 et seq. of
456456 this title, or remits or rebates to a consumer or user, either
457457 directly or indirectly, and by whatsoever means, all or any part of
458458 the tax levied by Section 1350 et seq. of this title, or makes in
459459 any form of advertising, verbally or otherwise, any statement which
460460 implies that the vendor is absorbing the tax, or paying th e tax for
461461 the consumer or user by an adjustment of prices or at a price
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488488 including the tax, or in any manner whatsoever, shall be deemed
489489 guilty of a misdemeanor, and upon conviction thereof shall be fined
490490 not more than Five Hundred Dollars ($500.00), and up on conviction
491491 for a second or other subsequent offense shall be fined not more
492492 than One Thousand Dollars ($1,000.00), or incarcerated for not more
493493 than sixty (60) days, or both. Provided, sales by vending machines
494494 may be made at a stated price which inclu des state and any municipal
495495 sales tax.
496496 E. A consumer or user who willfully or intentionally fails,
497497 neglects or refuses to pay the full amount of tax levied by Section
498498 1350 et seq. of this title or willfully or intentionally uses a
499499 sales tax permit or dire ct payment permit which is invalid, expired,
500500 revoked, canceled or otherwise li mited to a specific line of
501501 business or willfully or intentionally issues a resale certificate
502502 to a vendor to evade the tax levied by Section 1350 et seq. of this
503503 title shall be subject to a penalty in the amount of Five Hundred
504504 Dollars ($500.00) per reporting period upon determination thereof,
505505 which shall be apportioned as provided for the apportionment of the
506506 tax.
507507 F. Any sum or sums collected or accrued or required to be
508508 collected or accrued in Section 1350 et seq. of this title shall be
509509 deemed to be held in trust for the State of Oklahoma, and, as
510510 trustee, the collecting vendor or holder of a direct payment permit
511511 as provided for in Section 1364.1 of this title shall have a
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538538 fiduciary duty to the State of Oklahoma in regards to such sums and
539539 shall be subject to the trust laws of this state.
540540 G. Notwithstanding the provisions of this section, the sales
541541 tax associated with the purchase of a motor vehicle shall be paid by
542542 the consumer in the same manner and time as the motor vehicle excise
543543 tax for said motor vehicle is due.
544544 SECTION 4. AMENDATORY 68 O.S. 2021, Section 1402, is
545545 amended to read as follows:
546546 Section 1402. There is hereby levied and there shall b e paid by
547547 every person storing, using, or otherwise consuming within this
548548 state, tangible personal property purchased or brought into this
549549 state, an excise tax on the storage, use, or other consumption in
550550 this state of such property at the rate of four and one-half percent
551551 (4.5%) of the purchase price of such property. Said tax sha ll not
552552 be levied on tangible personal property intended solely for use in
553553 other states, but which is stored in Oklahoma pending shipment to
554554 such other states or which is temporar ily retained in Oklahoma for
555555 the purpose of fabrication, repair, testing, alteration,
556556 maintenance, or other service. The tax in such instances shall be
557557 paid at the time of importation or storage of the property within
558558 the state and a subsequent credit sha ll be taken by the taxpayer for
559559 the amount so paid upon removal of the propert y from the state.
560560 Such tax is hereby levied and shall be paid in an amount equal to
561561 four and one-half percent (4.5%) of the purchase price of such
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588588 tangible personal property. Notwithstanding the provisions of this
589589 section, the tax associated with a motor vehicle shall be paid by
590590 the consumer in the same manner and time as the motor vehicle excise
591591 tax for said motor vehicle is due.
592592 SECTION 5. AMENDATORY 68 O.S. 2021, Section 1404, as
593593 amended by Section 2, Chapter 370, O.S.L. 2023 (68 O.S. Supp. 2024,
594594 Section 1404), is amended to read as follows:
595595 Section 1404. The provisions of Section 1401 et seq. of this
596596 title shall not apply:
597597 1. In respect to the use of any article of tangible personal
598598 property brought into the State of Oklahoma by a nonresident
599599 individual, visiting in this state, for his or her personal use or
600600 enjoyment, while within the state;
601601 2. In respect to the use of tangible personal property
602602 purchased for resale before being used;
603603 3. In respect to the use of any articl e of tangible personal
604604 property on which a tax, equal to or in excess of that levied by
605605 Section 1401 et seq. of this title, has been paid by the person
606606 using such tangible person al property in this state, whether such
607607 tax was levied under the laws of this state or some other state of
608608 the United States. If any article of tangible personal property has
609609 already been subjected to a tax, by this or any other state, in
610610 respect to its sale or use, in an amount less than the tax imposed
611611 by Section 1401 et seq. of this title, the provisions of Section
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638638 1401 et seq. of this title shall apply to it by a rate measured by
639639 the difference only between the rate herein provided and the rate by
640640 which the previous tax upon the sale or use was computed. Provided,
641641 that no credit shall be given for taxes paid in another state, if
642642 that state does not grant like credit for taxes paid in this state;
643643 4. In respect to the use of tangible personal property n ow
644644 specifically exempted from taxation under Oklahoma Sales Tax Code .
645645 Provided, for the sale of motor vehicles or any optional equipment
646646 or accessories attached to motor vehicles on which the Oklahoma
647647 Motor Vehicle Excise Tax levied pursuant to Sections 2 101 through
648648 2108 of this title has been, or will be paid, the exceptions shall
649649 apply to all but a portion of the levy provided under Section 1402
650650 of this title, equal to one and twenty -five-hundredths percent
651651 (1.25%) of the purchase price. For the purpose s of this paragraph,
652652 if the sale of a motor vehicle includes a trade -in, the purchase
653653 price shall be calculated based only on the difference between the
654654 value of the trade-in vehicle and the actual purchase price of the
655655 vehicle being purchased. Provided f urther, the sale of motor
656656 vehicles shall not be subject to any sales and use taxes levied by
657657 cities, counties, or other jurisdictions of the state ;
658658 5. In respect to the use of any article or tangible personal
659659 property brought into the state by an individu al with intent to
660660 become a resident of this state where such personal property is for
661661 such individual's personal use or enjoyment;
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688688 6. In respect to the use of any article of tangible personal
689689 property used or to be used by commercial airlines or railroads ;
690690 7. In respect to livestock purchased outside this state and
691691 brought into this state for feeding or breeding purposes, and which
692692 is later resold; and
693693 8. Effective January 1, 1991, in respect to the use of rail
694694 transportation cars to haul coal to coal -fired plants located in
695695 this state which generate electric power.
696696 SECTION 6. This act shall become effective July 1, 2025.
697697 SECTION 7. It being immediately necessary for the preservation
698698 of the public peace, health or safety, an emergency is hereby
699699 declared to exist, by reason whereof this act shall take effect and
700700 be in full force from and after its passage and approval.
701701
702702 60-1-10289 AO 11/22/24