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SENATE FLOOR VERSION
February 24, 2025
SENATE BILL NO. 680 By: Paxton of the Senate
and
Caldwell (Trey) of the
House
An Act relating to heated tobacco products ; amending
68 O.S. 2021, Sections 301, 321, and 322, which
relate to the cigarette s tamp tax; modifying
definition; providing exemption; requiring the
Oklahoma Tax Commission to prescribe certain rules
and regulations to comply with certain exemption;
updating statutory language; updating statutory
references; and providing an effective d ate.
BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
SECTION 1. AMENDATORY 68 O.S. 2021, Section 301, is
amended to read as follows:
Section 301. For purposes of Section 301 et seq. of this title:
1. The term “cigarette” is defined to mean and include all
rolled tobacco or any substitute therefor, wrapped in paper or any
substitute therefor and weighing not to exceed three (3) pounds per
thousand cigarettes. The term cigarette shall include products that
are intended to be heated or burned;
2. The term “person” is defined to mean and include any
individual, company, partnership, joint venture, joint agreement,
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association (mutual or otherwise), limited liability company,
corporation, estate, trust, business trust recei ver, or trustee
appointed by any state or federal court, or otherwise, syndicate, or
any political subdivision of the state or combination acting as a
unit, in the plural or singular number;
3. The term “wholesaler”, “distributor” and/or “jobber” is
defined to mean and include a person, firm or corporation organized
and existing, or doing business, primarily to sell cigarettes to,
and render service to retailers in the territory such person, firm
or corporation chooses to serve, and that:
a. purchases cigarettes directly from the manufacturer,
b. at least seventy-five percent (75%) of whose gross
sales are made at wholesale,
c. handles goods in wholesale quantities and sells
through salespersons, advertising and/or sales
promotion devices,
d. carries at all times at its principal place of
business a representative stock of cigarettes for
sale, and
e. comes into the possession of cigarettes for the
purpose of selling them to retailers or to persons
outside or within the state who might resell or retail
such cigarettes to consumers.
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In addition to the foregoing, and irrespective of the percentage
or type of sales, the term “wholesaler” wholesaler, “distributor”
distributor and/or “jobber” jobber shall also include all purchasers
of cigarettes making purchases d irectly from the manufacturer for
distribution at wholesale or retail sale and this shall not affect
the requirements relating to retail licenses;
4. The term “retailer” is defined to be:
a. a person who comes into the possession of cigarettes
for the purpose of selling, or who sells them at
retail, or
b. a person, not coming within the classification of
wholesaler, distributor and/or jobber as herein
defined, having possession of more than one thousand
cigarettes;
5. The term “consumer” is defined to be a person who receives
or who in any way comes into possession of cigarettes for the
purpose of consuming them, giving them away, or disposing of them in
a way other than by sale, barter or exchange;
6. The term “Tax Commission” is defined to mean the Okla homa
Tax Commission;
7. The term “sale” and/or “sales” is hereby defined to be and
declared to include sales, barters, exchanges and every other
manner, method and form of transferring the ownership of personal
property from one person to another, and is also declared to be the
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use or consumption in this state in the first instance of cigarettes
received from without the state or of any other cigarettes upon
which the tax has not been paid. The term “first sale” shall mean
and include the first sale or di stribution of cigarettes in
intrastate commerce or the first use or consumption of cigarettes
within this state;
8. The term “stamp” as herein used shall mean the stamp or
stamps by use of which:
a. the tax levied pursuant to the provisions of Section
301 et seq. of this title is paid, or
b. the tax levied pursuant to the provisions of Section
349 of this title is paid, or
c. the payment in lieu of taxes authorized pursuant to a
compact entered into by the State of Oklahoma this
state and a federally recog nized Indian tribe or
nation pursuant to the provisions of subsection C of
Section 346 of this title is paid;
9. The term “drop shipment” shall mean and include any delivery
of cigarettes received by any person within this state when payment
for such cigarettes is made to the shipper or seller by or through a
person other than the consignee;
10. The term “distributing agent” shall mean and include every
person in this state who acts as an agent of any person outside the
state by receiving cigarettes in in terstate commerce and storing
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such cigarettes subject to distribution or delivery upon order from
the person outside the state to distributors, wholesale dealers and
retail dealers, or to consumers. The term “distributing agent”
distributing agent shall also mean and include any person who
solicits or takes orders for cigarettes to be shipped in interstate
commerce to a person in this state by a person residing outside of
Oklahoma, the tax not having been paid on such cigarettes;
11. The term “vending machine” shall mean and include any coin
operating machine, contrivance, or device, by means of which
cigarettes are sold or dispensed in their original container;
12. The term “use” means and includes the exercise of any right
or power over cigarettes incid ent to the ownership or possession
thereof, except that it shall not include the sale of cigarettes in
the regular course of business;
13. a. The term “delivery sale” means any sale of cigarettes
to a consumer in Oklahoma where either:
(1) the purchaser submits the order for such sale by
means of a telephonic or other method of voice
transmission, the mails or any other delivery
service, or the Internet or other online service,
or
(2) the cigarettes are delivered by use of the mails
or other delivery servic e.
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b. A sale of cigarettes which satisfies the criteria in
subparagraph a of this paragraph shall be a delivery
sale regardless of whether the seller is located
within or outside of Oklahoma.
c. A sale of cigarettes not for personal consumption to a
person who is a wholesale dealer or a retail dealer
shall not be a delivery sale.
d. For purposes of this paragraph, any sale of cigarettes
to an individual in Oklahoma shall be treated as a
sale to a consumer unless such individual is licensed
as a distributor or retailer of cigarettes by the Tax
Commission;
14. The term “delivery service” means any person, including ,
but not limited to, the United States Postal Service, that is
engaged in the commercial delivery of letters, packages, or other
containers;
15. The term “manufacturer” means any person who manufactures,
fabricates, assembles, processes, or labels a finished cigarette; or
imports, either directly or indirectly, a finished cigarette for
sale or distribution in this state;
16. The term “mails” or “mailing” means the shipment of
cigarettes through the United States Postal Service;
17. The term “shipping container” means a container in which
cigarettes are shipped in connection with a delivery sale; and
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18. The term “shipping documents” means bills of lading,
airbills, or any other documents used to evidence the undertaking by
a delivery service to deliver letters, packages, or other
containers.
SECTION 2. AMENDATORY 68 O.S. 2021, Section 321, is
amended to read as follows:
Section 321. A. The following sales are hereby exempted from
the stamp excise tax levied pursuant to the provisions of Section
301 et seq. of this title:
1. All cigarettes sold to veterans hospitals and state operated
domiciliary homes for veterans locat ed in the State of Oklahoma this
state, for distribution or sale to disabled ex -servicemen or
disabled ex-servicewomen interned in, or inmates of, such hospitals,
or residents of such homes;
2. All sales to the United States; and
3. All sales to a federa lly recognized Indian tribe or nation
which has entered into a compact with the State of Oklahoma this
state pursuant to the provisions of subsection C of Section 1 of
this act 346 of this title or to a licensee of such a tribe or
nation, upon which the pa yment in lieu of taxes required by the
compact has been paid ; and
4. All sales to 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 provisions of Section 4 of this act has be en paid.
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B. An exemption is hereby provided for the sale of cigarettes
that are intended to be heated rather than burned equal to fifty
percent (50%) of the taxes levied pursuant to the provisions of
Section 301 et seq. of this title.
SECTION 3. AMENDATORY 68 O.S. 2021, Section 322, is
amended to read as follows:
Section 322. The Oklahoma Tax Commission shall prescribe such
rules and make such regulations as to the sale or distribution of
cigarettes, and the exemption from the st amp excise tax thereof, as
shall be deemed necessary to comply with the provisions of the
preceding section Section 301 et seq. of this title . Provided, the
Tax Commission shall administer the provisions of this act so that
stamps shall be available , on or before the effective date of this
act, for affixing to packages of cigarettes that are intended to be
heated rather than burned .
SECTION 4. This act shall become effective November 1, 2025.
COMMITTEE REPORT BY: COMMITTEE ON REVENUE AND T AXATION
February 24, 2025 - DO PASS