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STATE OF OKLAHOMA
1st Session of the 60th Legislature (2025)
HOUSE BILL 1418 By: West (Josh)
AS INTRODUCED
An Act relating to revenue and taxation; amending 68
O.S. 2021, Section 500.3, which relates to the
definition in the motor fuel tax code; defining
marine gasoline; amending 68 O.S. 2021, Section
500.4, which relates to the levy of tax; providing
tax on marine gasoline; 68 O.S. 2021, Section 500.10,
as amended by Section 1, Chapter 292, O.S.L. 2024 (68
O.S. Supp. 2024, Section 500.10), which relates to
exemptions from motor fuel tax; providing exemption
for marine gasoline; 68 O.S. 2021, Section 1355, as
amended by Section 1, Chapter 370, O.S.L. 2023 (68
O.S. Supp. 2024, Section 1355), which relates to
exemptions subject to other tax; e xempting marine
gasoline from sales tax; and providing an effective
date.
BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
SECTION 1. AMENDATORY 68 O.S. 2021, Section 500.3, is
amended to read as follows:
Section 500.3. As used in the Motor Fuel Tax Code:
1. "Act" or "this act" means the Motor Fuel Tax Code;
2. "Agricultural purposes " means clearing, terracing or
otherwise preparing the ground on a farm; preparing soil for
planting and fertilizing, cultivating, raising and harvesting crops;
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raising and feeding livestock and poultry; building fences; pumping
water for any and all uses on the farm, including irrigation;
building roads upon any farm by the owner or person farming same;
operating milking machines; sa wing wood for use on a farm; producing
electricity for use on a farm; movement of tractors, farm implements
and equipment from one field to another and use of farm tractors to
move farm products from farm to market;
3. "Biodiesel" means a fuel comprised o f mono-alkyl esters of
long chain fatty acids generally derived from vegetable oils or
animal fats, commonly known as "B100", that is commonly and
commercially known or sold as a fuel that is suitable for use in a
highway vehicle. The fuel meets this requ irement if, without
further processing or blending, the fuel is a fluid and ha s
practical and commercial fitness for use in the propulsion of a
highway vehicle;
4. "Biodiesel blend" means a blend of biodiesel fuel with
petroleum-based diesel fuel, commonl y designated as "Bxx", where
"xx" represents the volume percentage of biodiesel fuel in the
blend, and that is commonly and commercially known or sold as a fuel
that is suitable for use in a highway vehicle. The fuel meets this
requirement if, without fur ther processing or blending, the fuel is
a fluid and has practical and commerc ial fitness for use in the
propulsion of a highway vehicle;
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5. "Blend stock" means any petroleum product component of
gasoline, such as naphtha, reformate, or toluene, that can be
blended for use in a motor fuel without further processing.
However, the term does not include any substance that:
a. will be ultimately used for consumer nonmotor -fuel
use, and
b. is sold or removed in drum quantities (55 gallons) or
less at the time of the removal or sale;
6. "Blended fuel" means a mixture composed of gasolin e or
diesel fuel and another liquid, other than a de minimis amount of a
product such as carburetor detergent or oxidation inhibitor, that
can be used as a fuel in a highway vehi cle. This term includes
gasohol, ethanol and fuel grade ethanol;
7. "Blender" means any person that produces blended motor fuel
outside the bulk transfer/terminal system;
8. "Blending" means the mixing of one or more petroleum
products, with or without another product, regardless of the
original character of the product blended, if the product obtained
by the blending is capable of use or otherwise sold for use in the
generation of power for the propulsion of a motor vehicle, an
airplane, or a motorboat. The term does not include that blending
that occurs in the process of refining by the original refiner of
crude petroleum or the blending or products known as lubricating oil
and greases;
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9. "Bulk end user" means a person who receives into the
person's own storage facilities in transport truck lots of motor
fuel for the person's own consumption;
10. "Bulk plant" means a motor fuel storage and distribution
facility that is not a terminal and from which motor fuel may be
removed at a rack;
11. "Bulk transfer" means any transfer of motor fuel from one
location to another by pipeline tender or marine delivery within the
bulk transfer/terminal system;
12. "Bulk transfer/terminal system " means the motor fuel
distribution system consisting of refineries, pipe lines, vessels,
and terminals. Gasoline in a refinery, pipeline, vessel, or
terminal is in the bulk transfer/terminal system. Motor fuel in the
fuel supply tank of any engine, or in any tank car, rail car,
trailer, truck, or other equipment suitable for ground
transportation is not in the bulk transfer/terminal system;
13. "Tax Commission" or "Commission" means the Oklahoma Tax
Commission;
14. "Compressed natural gas " means a volume of natural gas
consisting primarily of methane which has been reduced t o
approximately one percent (1%) of its original volume for purposes
of storage and for use as a fuel in motor vehicles;
15. "Consumer" means the user of the motor fuel on the public
highways of this state;
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16. "Dead storage" means the amount of motor fu el that will not
be pumped out of a storage tank because the motor fuel is below the
mouth of the draw pipe. For purposes of Section 500.1 et seq. of
this title, a dealer may assume that the amount of motor fuel in
dead storage is two hundred (200) gallon s for a tank with a capacity
of less than ten thousand (10,000) gallons and fo ur hundred (400)
gallons for a tank with a capacity of ten thousand (10,000) gallons
or more;
17. "Delivery" means the placing of motor fuel or any liquid
into the fuel tank of a motor vehicle;
18. "Destination state" means the state, territory, or foreign
country to which motor fuel is directed for delivery into a storage
facility, a receptacle, a container, or a type of transportation
equipment for the purpose of resale or use ;
19. "Diesel fuel" means any liquid, including but not limited
to, biodiesel, biodiesel blend or other diesel blended fuel, that is
commonly or commercially known or sold as a fuel that is suitable
for use in a diesel-powered highway vehicle. A liquid m eets this
requirement if, without further processing or blending, the liquid
has practical and commercial fitness for use in the propulsion
engine of a diesel-powered highway vehicle. Except as provided in
subsection B of Section 500.4 of this title, "diesel fuel" does not
include jet fuel sold to a buyer who is registered with and
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certified by the Internal Revenue Service to purchase jet fuel
subject to the Internal Revenue Service;
20. "Diesel-powered highway vehicle " means a motor vehicle
operated on a highway that is propelled by a diesel -powered engine;
21. "Distributor" means a person who acquires motor fuel from a
supplier or from another distributor for subsequent sale or use;
22. "Dyed diesel fuel" means diesel fuel that is required to be
dyed pursuant to United States Environmental Protection Agency rules
or is dyed pursuant to Internal Revenue Service rules or pursuant to
any other requirements subsequently set by the United States
Environmental Protection Agency or Internal Revenue Service
including any invisible marker requirements;
23. "Eligible purchaser" means a person who has been authorized
by the Commission pursuant to Section 500.23 of this title to make
the election pursuant to Section 500.22 of this title;
24. "Enterer" includes any person who is the importer of
record, pursuant to federal customs law, with r espect to motor fuel.
If the importer of record is acting as an agent, the person for whom
the agent is acting is the enterer. If there is no importer of
record of motor fuel e ntered into this state, the owner of the motor
fuel at the time it is brought into this state is the enterer;
25. "Entry" means the importing of motor fuel into this state.
Motor fuel brought into this state in the fuel tank of a motor
vehicle shall not be deemed to be an "entry" if not removed from the
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fuel tank except as used fo r the propulsion of that motor vehicle,
except to the extent that motor fuel was acquired tax free for
export or a refund of tax was claimed as a result of exportation
from the state from which that motor fuel was transported into this
state;
26. "Export" means to obtain motor fuel in this state for sale
or other distribution in another state. In applying this
definition, motor fuel delivered out of state by or for the seller
constitutes an export by the seller and motor fuel delivered out of
state by or for the purchaser constitutes an export by the
purchaser;
27. "Exporter" means any person, other than a supplier, who
purchases motor fuel in this state for the purpose of trans porting
or delivering the fuel to another state or country;
28. "Farm tractor" means all tractor-type, motorized farm
implements and equipment but shall not include motor vehicles of the
truck-type, pickup truck-type, automobiles, and other motor vehicles
required to be registered and licensed each year pursuant to the
provisions of the motor vehicle license and registration laws of
this state;
29. "Fuel transportation vehicle " means any vehicle designed
for highway use which is also designed or used to t ransport motor
fuels and includes transport trucks and tank wagons;
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30. "Gasoline" means all products, including but not limited
to, gasoline blend stocks, commonly or commercially known or sold as
gasoline that are suitable for use as a motor fuel. Gaso line does
not include products that have an American Society for Testing
Materials ("A.S.T.M.") octane number of less than seventy -five (75)
as determined by the "motor method". Except as provided in
subsection B of Section 500.4 of this title, "gasoline" does not
include aviation gasoline provided that the buyer is registered to
purchase aviation gasoline free of tax and the seller obtains
certification of such fact satisfactory to the Commission prior to
making the sale;
31. "Gasoline blend stocks " includes any petroleum product
component of gasoline, such as naphtha, reformate, or toluene, that
can be blended for use in a motor fuel. The term shall not include
any substance that will be ultimately used for consumer nonmotor -
fuel use and is sold or remo ved in drum quantities of 55 gallons or
less at the time of the removal or sale;
32. "Gross gallons" means the total measured motor fuel,
exclusive of any temperature or pressure adjustments, in U.S.
gallons;
33. "Heating oil" means a motor fuel that is burned in a
boiler, furnace, or stove for heating or industrial processing
purposes;
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34. "Highway vehicle" means a self-propelled vehicle that is
designed for use on a highway;
35. "Import" means to bring motor fuel into this state by any
means of conveyance other than in the fuel supply tank of a motor
vehicle. In applying this definition, motor fuel delivered into
this state from out of state by or for the seller constitutes an
import by the seller, and motor fuel delivered into this state from
out of state by or for the purchaser constitutes an import by the
purchaser;
36. "Import verification number " means the number assigned by
the Commission with respect to a single transport truck delivery
into this state from another state upon request for an ass igned
number by an importer or the transporter carrying motor fuel into
this state for the account of an importer;
37. "In this state" means the area within the border of this
state, including all land within the borders of this state owned by
the United States of America;
38. "Indian country" means:
a. land held in trust by the U nited States of America for
the benefit of a federally recognized Indian tribe or
nation,
b. all land within the limits of any Indian reservation
under the jurisdiction of the Un ited States
Government, notwithstanding the issuance of any
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patent, and including rights -of-way running through
the reservation,
c. all dependent Indian communities within the borders of
the United States whether within the original or
subsequently acquire d territory thereof, and whether
within or without the limits of a state, and
d. all Indian allotments, the Indian titles to which have
not been extinguished, including individual allotments
held in trust by the United States or allotments owned
in fee by individual Indians subject to federal law
restrictions regarding disposition of said allotments
and including rights -of-way running through the same.
The term shall also include the definition of Indian country as
found in 18 U.S.C., Section 1151;
39. "Indian tribe", "tribes", or "federally recognized Indian
tribe or nation" means an Indian tribal entity which is recognized
by the United States Bureau of Indian Affairs as having a special
relationship with the United States. The term shall also include
the definition of a tribe as defined in 25 U.S.C., Section 479a;
40. "Invoiced gallons" means the gallons actually billed on an
invoice in payment to a supplier;
41. "K-1 kerosene" means a petroleum product having an A.P.I.
gravity of not less than forty d egrees (40°), at a temperature of
sixty degrees (60°) Fahrenheit and a minimum flash point of one
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hundred degrees (100°) Fahrenheit with a sulphur content not
exceeding five one-hundredths percent (0.05%) by weight;
42. "Liquefied natural gas " means a volume of natural gas
consisting primarily of methane which has been cooled to
approximately negative two hundred sixty ( -260) degrees Fahrenheit
in order to convert it to a liquid state for purposes of storage and
use as a fuel in motor vehicles;
43. "Liquid" means any substance that is liquid in excess of
sixty degrees (60°) Fahrenh eit and a pressure of fourteen and seven -
tenths (14.7) pounds per square inch absolute;
44. "Marine gasoline" means fuel formulated for the use in
marine engines such as those f ound in boats and other watercraft;
45. "Motor fuel" means gasoline, diesel fuel and blended fuel;
45. 46. "Motor fuel transporter " means a person who transports
motor fuel outside the bulk terminal/transfer system by transport
truck or railroad tank car ;
46. 47. "Motor vehicle" means every automobile, truck, truck -
tractor or any motor bus or self-propelled vehicle not operated or
driven upon fixed rails or tracks. The term does not include:
a. farm tractors or machinery including tractors and
machinery designed for off-road use but capable of
movement on roads at low speeds,
b. a vehicle operated on rails, or
c. machinery designed principally for off -road use;
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47. 48. "Net gallons" means the motor fuel, measured in U.S.
gallons, when corrected to a tem perature of sixty degrees (60°)
Fahrenheit (13° Celsius) and a pressure of fou rteen and seven-tenths
(14.7) pounds per square inch (psi);
48. 49. "Permissive supplier" means an out-of-state supplier
that elects, but is not required, to have a supplier 's license
pursuant to Section 500.1 et seq. of this title;
49. 50. "Person" means natural persons, individuals,
partnerships, firms, associations, corporations, estates, trustees,
business trusts, syndicates, this state, any county, city,
municipality, school district or other political subdivision of the
state, federally recognized I ndian tribe, or any corporation or
combination acting as a unit or any receiver appointed by any state
or federal court;
50. 51. "Position holder" means the person who holds the
inventory position in motor fuel in a terminal, as reflected on the
records of the terminal operator. A person holds the inventory
position in motor fuel when that person has a contract with the
terminal operator for the use of storage facilities and ter minaling
services for fuel at the terminal. The term includes a terminal
operator who owns fuel in the terminal;
51. 52. "Public highway" means every road, toll road, highway,
street, way or place generally open to the use of the public as a
matter of right for the purposes of vehicular travel, including
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streets and alleys of any town or city notwithstanding that the same
may be temporarily closed for construction, reconstruction,
maintenance or repair;
52. 53. "Qualified terminal" means a terminal desig nated as a
qualified terminal pursuant to the Internal Revenue Code, regulatio n
and practices and which has been assigned a terminal control number
("tcn") by the Internal Revenue Service;
53. 54. "Rack" means a mechanism for delivering motor fuel from
a refinery, a terminal, or a bulk plant into a railroad tank car, a
transport truck or other means of bulk transfer outside of the bulk
transfer/terminal system;
54. 55. "Refiner" means any person that owns, operates, or
otherwise controls a refinery within the United States;
55. 56. "Refinery" means a facility used to produce motor fuel
from crude oil, unfinished oils, natural gas liquids, or other
hydrocarbons and from which motor fuel may be removed by pipeline,
by vessel, or at a rack;
56. 57. "Removal" means any physical transfer other than by
evaporation, loss, or destruction of motor fuel from a terminal,
manufacturing plant, customs custody, pipeline, marine vessel such
as a barge or tanker, refinery or any receptacle that stores motor
fuel;
57. 58. "Retailer" means a person that engages in the business
of selling or distrib uting to the consumer within this state;
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58. 59. "Supplier" means a person that is:
a. registered pursuant to Section 4101 of the Internal
Revenue Code for transactions in motor fuels in the
bulk transfer/terminal distribution system, and
b. one of the following:
(1) the position holder in a terminal or refinery in
this state,
(2) imports motor fuel into this state from a foreign
country,
(3) acquires motor fuel from a terminal o r refinery
in this state from a position holder pursuant to
a two-party exchange, or
(4) the position holder in a terminal or refinery
outside this state with respect to motor fuel
which that person imports into this state on the
account of that person.
A terminal operator shall not be considered a supplier based
solely on the fact that the terminal operator handles motor fuel
consigned to it within a terminal. "Supplier" also means a person
that produces alcohol or alcohol derivative substances in this
state, produces alcohol or alcohol derivative substances for import
to this state into a terminal, or acquires upon import by truck,
railcar or barge into a terminal or refinery, alcohol or alcohol
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derivative substances. "Supplier" includes a permissive sup plier
unless specifically provided otherwise;
59. 60. "Tank wagon" means a straight truck having multiple
compartments designed or used to carry motor fuel;
60. 61. "Terminal" means a storage and distribution facility
for motor fuel, supplied by pipeline or marine vessel which is
registered as a qualified terminal by the Internal Revenue Service
and from which motor fuel may be removed at a rack;
61. 62. "Terminal bulk transfers " include but are not limited
to the following:
a. a marine barge movement of fuel from a refinery or
terminal to a terminal,
b. pipeline movements of fuel from a refinery or terminal
to a terminal,
c. book transfers of product within a terminal between
suppliers prior to completion of removal across the
rack, and
d. two-party exchanges between licensed suppliers;
62. 63. "Terminal operator" means any person that owns,
operates, or otherwise controls a terminal, and does not use a
substantial portion of the motor fuel that is transferred through or
stored in the terminal for its ow n use or consumption or in the
manufacture of products other than motor fuel. A terminal operator
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may own the motor fuel that is transferred through or stored in the
terminal;
63. 64. "Throughputter" means any person that:
a. receives transfer of motor f uel from refiners,
importers, terminal operators, or other
throughputters,
b. stores the motor fuel in a terminal, and
c. owns the motor fuel or holds the inventory position to
the motor fuel, as reflected on the records of the
terminal operator, at the ti me of removal or sale from
a terminal;
64. 65. "Transmix" means the buffer or interface between two
different products in a pipeline shipment, or a mix of two different
products within a refinery or terminal that results in an off -grade
mixture;
65. 66. "Transport truck" means a semitrailer combination rig
designed or used for the purpose of transporting motor fuel over the
highways;
66. 67. "Transporter" means any operator of a pipeline, barge,
railroad or transport truck engaged in the business of tran sporting
motor fuels;
67. 68. "Two-party exchange" means a transaction in which the
motor fuel is transferred from one licensed supplier or licensed
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permissive supplier to another licensed supplier or licensed
permissive supplier and:
a. which transaction includes a transfer from the person
that holds the original inventory positio n for motor
fuel in the terminal as reflected on the records of
the terminal operator, and
b. the exchange transaction is simultaneous with removal
from the terminal by the recei ving exchange partner.
However, in any event, the terminal operator in the books and
records of such terminal operator treats the receiving exchange
party as the supplier which removes the product across a terminal
rack for purposes of reporting such event s to this state;
68. 69. "Ultimate vendor" means a person that sells motor fu el
to the consumer;
69. 70. "Undyed diesel fuel" means diesel fuel that is not
subject to the United States Environmental Projection Agency dyeing
requirements, or has not been dyed in accordance with Internal
Revenue Service fuel dyeing provisions;
70. 71. "Vehicle fuel tank" means any receptacle on a motor
vehicle from which fuel is supplied for the propulsion of the motor
vehicle; and
71. 72. "Wholesaler" means a person that acquires motor fuel
from a supplier or from another wholesaler for subsequent sale and
distribution at wholesale.
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SECTION 2. AMENDATORY 68 O.S. 2021, Section 500.4, is
amended to read as follows:
Section 500.4. A. A tax is impo sed on all gasoline, compressed
natural gas, liquefied natural gas and all diesel fuel used or
consumed in this state as follows:
1. Gasoline, marine gasoline, sixteen cents ($0.16) per gallon;
2. Diesel fuel, thirteen cents ($0.13) per gallon;
3. Compressed natural gas, five cents ($0.05) per gasoline
gallons equivalent (gge) un til the credit authorized pursuant to the
provisions of paragraph 1 of subsection A of Section 2357.22 of this
title expires. Upon the expiration of the credit authorized
pursuant to the provisions of paragraph 1 of subsection A of Section
2357.22 of this title, the rate of tax imposed upon compressed
natural gas shall be equal to the tax rate imposed on diesel fuel
using gasoline gallons equivalent (gge); and
4. Liquefied natural gas, five cents ($0.05) per diesel gallon
equivalent (dge) until the credit authorized pursuant to the
provisions of paragraph 1 of subsection A of Section 2357.22 of this
title expires. Upon the expiration of the credit authorized
pursuant to the prov isions of paragraph 1 of subsection A of Section
2357.22 of this title, the rate of tax imposed upon liquefied
natural gas shall be equal to the tax rate imposed on diesel fuel
using diesel gallon equivalent (dge), which shall be equal to six
and six one-hundredths (6.06) pounds of liquefied natural gas.
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B. A tax is imposed on all gasoline, diesel fuel and kerosene
used or consumed in this state for use as fuel to generate power in
aircraft engines or for training, testing or research on aircraft
engines in the amount of eight one -hundredths of one cent ($0.0008)
per gallon. All gasoline, diesel fuel and kerosene sold for use
under this subsection shall not be subject to the excise tax levied
in subsection A of this section.
C. Notwithstanding any exempti on provided in Section 500.1 et
seq. of this title, all gasoline used or consu med in this state for
use as fuel for farm tractors or stationary engines and used
exclusively for agricultural purposes shall be subject to a tax in
the amount of two and eight one-hundredths cents ($0.0208) per
gallon. All gasoline sold for use pursuant to this subsection shall
not be subject to the excise tax levied in subsection A of this
section. The term "farm tractor", as used herein, shall include all
tractor-type, motorized farm implements and equipment but shall not
include motor vehicles of the truck-type, pickup truck-type,
automobiles and other motor vehicles required to be registered and
licensed each year under the Oklahoma Vehicle License and
Registration Act.
D. It is the intent of this section to amend, revise,
incorporate and recodify the tax imposed on motor fuel and that the
tax shall be conclusively presumed to be a direct tax and shall be a
direct tax on the retail or ultimate consumer precollected for the
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purpose of convenience and facility to the consumer. The levy and
assessment on other persons as specified in this act shall be as
agents of the state for the precollection of the tax. The
provisions of this section shall in no way affect the method of
collecting the tax as provided in this act. The tax imposed by this
section shall be collected and paid at those times, in the manner,
and by those persons specified in this act.
SECTION 3. AMENDATORY 68 O.S. 2021, Section 500.10, as
amended by Section 1, Chapter 292, O.S.L. 2024 (68 O.S. Supp. 2024,
Section 500.10), is amended to read as follows:
Section 500.10. Subject to the procedural requirements and
conditions set out in this section and Sections 500.11 through
500.17 of this title, the following are exempt from the taxes on
motor fuel imposed by Section 500.4 of this title and Section 500.4b
of this title:
1. Motor fuel for which proof of export is available in the
form of a terminal-issued destination state shipping paper:
a. exported by a supplier who is licensed in the
destination state, or
b. sold by a supplier to a licensed exporter for
immediate export;
2. Motor fuel which was acquired by an unlicensed exporter and
as to which the tax imposed by Section 500.4 of this title has
previously been paid or accrued and was subsequently exported by
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transport truck by or on behalf of the licensed exporter in a
diversion across state boundaries properly reported in conformity
with Section 500.46 of this title;
3. Motor fuel exported out of a bulk plant in this state in a
tank wagon if the destination of that vehicle does not exceed
twenty-five (25) miles from the border of this state and as to which
the tax imposed by Section 500.4 of this title has previously been
paid or accrued, subject to gallonage limits and other conditions
established by the Oklahoma Tax Commission;
4. K-1 kerosene sold at retail through dispensers which have
been designed and constructed to prevent delivery directly from the
dispenser into a vehicle fuel supply tank, and K-1 kerosene sold at
retail through nonbarricaded dispensers in quantities of not more
than twenty-one (21) gallons for use other than for highway
purposes, under such rules as the Tax Commission shall reasonably
require;
5. Motor fuel sold to the United States or any agency or
instrumentality thereof;
6. Motor fuel used solely and exclusively in district -owned
public school vehicles or FFA and 4 -H Club trucks for the purpose of
legally transporting public school children, and motor fuel
purchased by any school district for use exclusively in school buses
leased or hired for the purpose of legally transporting public
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school children, or in the operation of vehicles used in driver
training;
7. Motor fuel used solely and exclusively as fue l to propel
motor vehicles on the public roads and highways of this state, when
leased or owned and being operated for the sole benefit of a county,
city, town, a volunteer fire department with a state certification
and rating, rural electric cooperatives, rural water and sewer
districts, rural irrigation districts organized under t he Oklahoma
Irrigation District Act, conservancy districts and master
conservancy districts organized under the Conservancy Act of
Oklahoma, rural ambulance service districts, am bulance districts
established under Section 9C of Article X of the Oklahoma
Constitution, or federally recognized Indian tribes;
8. Motor fuel used as fuel for farm tractors or stationary
engines owned or leased and operated by any person and used
exclusively for agricultural purposes, except as to two and eight
one-hundredths cents ($0.0208) per gallon of gasoline as provided in
subsection C of Section 500.4 of this title;
9. Gasoline, diesel fuel and kerosene sold for use as fuel to
generate power in ai rcraft engines, whether in aircraft or for
training, testing or research purposes of aircraft engines, except
as to eight one-hundredths of one cent ($0.0008) per gallon as
provided in subsection B of Section 500.4 of this title;
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10. Motor fuel sold withi n an Indian reservation or within
Indian country by a federally recognized Ind ian tribe to a member of
that tribe and used in motor vehicles owned by that member of the
tribe. This exemption does not apply to sales within an Indian
reservation or within I ndian country by a federally recognized
Indian tribe to non-Indian consumers or to Indian consumers who are
not members of the tribe selling the motor fuel;
11. Subject to determination by the Tax Commission, that
portion of diesel fuel:
a. used to operate equipment attached to a motor vehicle,
if the diesel fuel was placed into th e fuel supply
tank of a motor vehicle that has a common fuel
reservoir for travel on a highway and for the
operation of equipment, or
b. consumed by the vehicle while the vehicle is parked
off the highways of this state;
12. Motor fuel acquired by a consumer out of state and carried
into this state, retained within and consumed from the same vehicle
fuel supply tank within which it was imported;
13. Diesel fuel used as heating o il, or in railroad locomotives
or any other motorized flanged -wheel rail equipment, or used for
other nonhighway purposes other than as expressly exempted under
another provision;
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14. Motor fuel which was lost or destroyed as a direct result
of a sudden and unexpected casualty;
15. Taxable diesel which had been accidentally contaminated by
dye so as to be unsaleable as highway fuel as proved by proper
documentation;
16. Dyed diesel fuel;
17. Motor fuel sold to the Oklahoma Space Industry Development
Authority or any spaceport user as defined in the Oklahoma Space
Industry Development Act; and
18. Biofuels or biodiesel produced by an individual with crops
grown on property owned by the same individual and used in a vehicle
owned by the same individual on the public roads and highways of
this state.; and
19. Marine gasoline used to power boats, watercrafts, and other
nonhighway purposes other than as expressly exempted under another
provision.
SECTION 4. AMENDATORY 68 O.S. 2021, Section 1355, as
amended by Section 1, Chapter 370, O.S.L. 2023 (68 O.S. Supp. 2024,
Section 1355), is amended to read as follows:
Section 1355. Exemptions - Subject to other tax.
There are hereby specifically exempted from the tax levied
pursuant to the provisions of Section 1350 et seq. of this title:
1. Sale of gasoline, marine gasoline, motor fuel, methanol, "M-
85" which is a mixture of methanol and gasoline containing at least
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eighty-five percent (85%) methanol, compressed natural gas,
liquefied natural gas, or liquefied petroleum gas on which the Motor
Fuel Tax, Gasoline Exci se Tax, Special Fuels Tax, or the fee in lieu
of Special Fuels Tax levied in Section 500.1 et seq., Section 601 et
seq. or Section 701 et seq. of this title has been, or will be paid;
2. For the sale of motor vehicles or any optional equipment or
accessories attached to motor vehicles on which the Oklahoma Motor
Vehicle Excise Tax levied in Section 2101 et seq. of this title has
been, or will be paid, all but a portion of the lev y provided under
Section 1354 of this title, equal to one and twenty -five-hundredths
percent (1.25%) of the gross receipts of such sales. For the
purposes of this paragraph, if the sale of a motor vehicle includes
a trade-in, gross receipts shall be calcu lated based only on the
difference between the value of the trade -in vehicle and the actual
sales price of the vehicle being purchased. Provided, the sale of
motor vehicles shall not be subject to any sales and use taxes
levied by cities, counties, or oth er jurisdictions of the state;
3. Sale of crude petroleum or natural or casin ghead gas, and
other products subject to gross production tax pursuant to the
provisions of Section 1001 et seq. and Section 1101 et seq. of this
title. This exemption shall not apply when such products are sold
to a consumer or user for consumption or use, except when used for
injection into the earth for the purpose of promoting or
facilitating the production of oil or gas. This paragraph shall not
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operate to increase or repea l the gross production tax levied by the
laws of this state;
4. Sale of aircraft on which the tax levied pursuant to the
provisions of Sections 6001 through 6007 of this title has been, or
will be paid or which are specifically exempt from such tax pursua nt
to the provisions of Section 6003 of this title;
5. Sales from coin-operated devices on which the fee imposed by
Sections 1501 through 1512 of this title has been paid;
6. Leases of twelve (12) months or more of motor vehicles in
which the owners of t he vehicles have paid the vehicle excise tax
levied by Section 2103 of this ti tle;
7. Sales of charity game equipment on which a tax is levied
pursuant to the Oklahoma Charity Games Act, Section 401 et seq. of
Title 3A of the Oklahoma Statutes, or which i s sold to an
organization that is:
a. a veterans' organization exempt from taxation pursuant
to the provisions of paragraph (4), (7), (8), (10), or
(19) of subsection (c) of Section 501 of the United
States Internal Revenue Code of 1986, as amended, 26
U.S.C., Section 501(c) et seq.,
b. a group home for mentally disabled individuals exempt
from taxation pursuant to the provisions of paragraph
(3) of subsection (c) of Section 501 of the United
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States Internal Revenue Code of 1986, as amended, 26
U.S.C., Section 501(c) et seq., or
c. a charitable health care organization which is exempt
from taxation pursuant to the provisions of paragraph
(3) of subsection (c) of Section 501 of the United
States Internal Revenue Code of 1986, as amended, 26
U.S.C., Section 501(c) et seq.;
8. Sales of cigarettes or tobacco products to:
a. a federally recognized Indian tribe or nation which
has entered into a compact with the State of Oklahoma
pursuant to the provisions of subsection C of Section
346 of this title or to a licen see of such a tribe or
nation, upon which the payment in lieu of taxes
required by the compact has been paid, or
b. a federally recognized Indian tribe or nation or to a
licensee of such a tribe or nation upon which the tax
levied pursuant to the provision s of Section 349.1 or
Section 426 of this title has been paid;
9. Leases of aircraft upon which the owners have paid the
aircraft excise tax levied by Section 6001 et seq. of this title or
which are specifically exempt from such tax pursuant to the
provisions of Section 6003 of this title;
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10. The sale of low -speed or medium-speed electrical vehicles
on which the Oklahoma Motor Vehicle Excise Tax levied in Section
2101 et seq. of this title has been or will be paid;
11. Effective January 1, 2005, sales o f cigarettes on which the
tax levied in Section 301 et seq. of this title or t obacco products
on which the tax levied in Section 401 et seq. of this title has
been paid; and
12. Sales of electricity at charging stations as defined by
Section 6502 of this title when the electricity is sold by a
charging station owner or operator for purposes of charging an
electric vehicle as defined by Section 6502 of this title and the
tax imposed pursuant to Section 6504 of this title is collected and
remitted to the Oklahoma Tax Commission.
SECTION 5. This act shall become effect ive November 1, 2025.
60-1-10749 AO 01/14/25