1 STATE OF OKLAHOMA
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2 1st Session of the 59th Legislature (2023)
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3 SENATE BILL 406 By: Rader
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6 AS INTRODUCED
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7 An Act relating to sales tax; amending 68 O.S. 2021,
7 Section 1356, as last amended by Section 1, Chapter
8 394, O.S.L. 2022 (68 O.S. Supp. 2022, Section 1356),
8 which relates to exemptions for governmental and
9 nonprofit entities; providing exemption for certain
9 organization providing services to abused and
10 neglected children; requiring submission of certain
10 documentation; providing exemption for certain
11 organization providing clothing or supplies to
11 certain students; updating statutory language; and
12 providing an effective date.
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15 BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
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16 SECTION 1. AMENDATORY 68 O.S. 2021, Section 1356, as
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17 last amended by Section 1, Chapter 394, O.S.L. 2022 (68 O.S. Supp.
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18 2022, Section 1356), is amended to read as follows:
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19 Section 1356. Exemptions - Governmental and nonprofit entities.
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20 There are hereby specifically exempted from the tax levied by
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21 Section 1350 et seq. of this title:
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22 1. Sale of tangible personal property or services to the United
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23 States government or to the State of Oklahoma this state, any
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24 political subdivision of this state, or any agency of a political
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 1 subdivision of this state; provided, all sales to contractors in
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2 connection with the performance of any contract with the United
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3 States government, State of Oklahoma this state, or any of its
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4 political subdivisions shall not be exempted from the tax levied by
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5 Section 1350 et seq. of this title, except as hereinafter provided;
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6 2. Sales of property to agents appointed by or under contract
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7 with agencies or instrumentalities of the United States government
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8 if ownership and possession of such property transfers immediately
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9 to the United States government;
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10 3. Sales of property to agents appointed by or under contract
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11 with a political subdivision of this state if the sale of such
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12 property is associated with the development of a qualified federal
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13 facility, as provided in the Oklahoma Federal Facilities Development
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14 Act, and if ownership and possession of such property transfers
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15 immediately to the political subdivision or the state;
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16 4. Sales made directly by county, district, or state fair
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17 authorities of this state, upon the premises of the fair authority,
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18 for the sole benefit of the fair authority or sales of admission
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19 tickets to such fairs or fair events at any location in the state
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20 authorized by county, district, or state fair authorities; provided,
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21 the exemption provided by this paragraph for admission tickets to
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22 fair events shall apply only to any portion of the admission price
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23 that is retained by or distributed to the fair authority. As used
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24 in this paragraph, “fair event” shall be limited to an event held on
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 1 the premises of the fair authority in conjunction with and during
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2 the time period of a county, district, or state fair;
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3 5. Sale of food in cafeterias or lunchrooms of elementary
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4 schools, high schools, colleges, or universities which are operated
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5 primarily for teachers and pupils and are not operated primarily for
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6 the public or for profit;
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7 6. Dues paid to fraternal, religious, civic, charitable, or
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8 educational societies or organizations by regular members thereof,
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9 provided, such societies or organizations operate under what is
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10 commonly termed the lodge plan or system, and provided such
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11 societies or organizations do not operate for a profit which inures
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12 to the benefit of any individual member or members thereof to the
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13 exclusion of other members and dues paid monthly or annually to
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14 privately owned scientific and educational libraries by members
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15 sharing the use of services rendered by such libraries with students
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16 interested in the study of geology, petroleum engineering, or
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17 related subjects;
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18 7. Sale of tangible personal property or services to or by
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19 churches, except sales made in the course of business for profit or
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20 savings, competing with other persons engaged in the same, or a
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21 similar business or sale of tangible personal property or services
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22 by an organization exempt from federal income tax pursuant to
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23 Section 501(c)(3) of the Internal Revenue Code of 1986, as amended,
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24 made on behalf of or at the request of a church or churches if the
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 1 sale of such property is conducted not more than once each calendar
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2 year for a period not to exceed three (3) days by the organization
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3 and proceeds from the sale of such property are used by the church
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4 or churches or by the organization for charitable purposes;
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5 8. The amount of proceeds received from the sale of admission
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6 tickets which is separately stated on the ticket of admission for
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7 the repayment of money borrowed by any accredited state-supported
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8 college or university or any public trust of which a county in this
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9 state is the beneficiary, for the purpose of constructing or
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10 enlarging any facility to be used for the staging of an athletic
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11 event, a theatrical production, or any other form of entertainment,
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12 edification, or cultural cultivation to which entry is gained with a
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13 paid admission ticket. Such facilities include, but are not limited
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14 to, athletic fields, athletic stadiums, field houses, amphitheaters,
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15 and theaters. To be eligible for this sales tax exemption, the
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16 amount separately stated on the admission ticket shall be a
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17 surcharge which is imposed, collected, and used for the sole purpose
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18 of servicing or aiding in the servicing of debt incurred by the
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19 college or university to effect the capital improvements
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20 hereinbefore described;
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21 9. Sales of tangible personal property or services to the
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22 council organizations or similar state supervisory organizations of
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23 the Boy Scouts of America, Girl Scouts of the U.S.A., and Camp Fire
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24 USA;
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 1 10. Sale of tangible personal property or services to any
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2 county, municipality, rural water district, public school district,
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3 city-county library system, the institutions of The Oklahoma State
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4 System of Higher Education, the Grand River Dam Authority, the
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5 Northeast Oklahoma Public Facilities Authority, the Oklahoma
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6 Municipal Power Authority, City of Tulsa-Rogers County Port
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7 Authority, Muskogee City-County Port Authority, the Oklahoma
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8 Department of Veterans Affairs, the Broken Bow Economic Development
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9 Authority, Ardmore Development Authority, Durant Industrial
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10 Authority, Oklahoma Ordnance Works Authority, Central Oklahoma
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11 Master Conservancy District, Arbuckle Master Conservancy District,
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12 Fort Cobb Master Conservancy District, Foss Reservoir Master
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13 Conservancy District, Mountain Park Master Conservancy District,
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14 Waurika Lake Master Conservancy District and the Office of
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15 Management and Enterprise Services only when carrying out a public
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16 construction contract on behalf of the Oklahoma Department of
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17 Veterans Affairs, and effective July 1, 2022, the University
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18 Hospitals Trust, or to any person with whom any of the above-named
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19 subdivisions or agencies of this state has duly entered into a
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20 public contract pursuant to law, necessary for carrying out such
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21 public contract or to any subcontractor to such a public contract.
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22 Any person making purchases on behalf of such subdivision or agency
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23 of this state shall certify, in writing, on the copy of the invoice
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24 or sales ticket to be retained by the vendor that the purchases are
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 1 made for and on behalf of such subdivision or agency of this state
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2 and set out the name of such public subdivision or agency. Any
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3 person who wrongfully or erroneously certifies that purchases are
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4 for any of the above-named subdivisions or agencies of this state or
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5 who otherwise violates this section shall be guilty of a misdemeanor
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6 and upon conviction thereof shall be fined an amount equal to double
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7 the amount of sales tax involved or incarcerated for not more than
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8 sixty (60) days or both;
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9 11. Sales of tangible personal property or services to private
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10 institutions of higher education and private elementary and
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11 secondary institutions of education accredited by the State
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12 Department of Education or registered by the State Board of
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13 Education for purposes of participating in federal programs or
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14 accredited as defined by the Oklahoma State Regents for Higher
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15 Education which are exempt from taxation pursuant to the provisions
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16 of the Internal Revenue Code, 26 U.S.C., Section 501(c)(3) including
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17 materials, supplies, and equipment used in the construction and
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18 improvement of buildings and other structures owned by the
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19 institutions and operated for educational purposes.
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20 Any person, firm, agency, or entity making purchases on behalf
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21 of any institution, agency, or subdivision in this state, shall
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22 certify in writing, on the copy of the invoice or sales ticket the
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23 nature of the purchases, and violation of this paragraph shall be a
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24 misdemeanor as set forth in paragraph 10 of this section;
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 1 12. Tuition and educational fees paid to private institutions
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2 of higher education and private elementary and secondary
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3 institutions of education accredited by the State Department of
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4 Education or registered by the State Board of Education for purposes
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5 of participating in federal programs or accredited as defined by the
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6 Oklahoma State Regents for Higher Education which are exempt from
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7 taxation pursuant to the provisions of the Internal Revenue Code, 26
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8 U.S.C., Section 501(c)(3);
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9 13. a. Sales of tangible personal property made by:
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10 (1) a public school,
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11 (2) a private school offering instruction for grade
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12 levels kindergarten through twelfth grade,
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13 (3) a public school district,
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14 (4) a public or private school board,
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15 (5) a public or private school student group or
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16 organization,
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17 (6) a parent-teacher association or organization
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18 other than as specified in subparagraph b of this
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19 paragraph, or
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20 (7) public or private school personnel for purposes
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21 of raising funds for the benefit of a public or
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22 private school, public school district, public or
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23 private school board, or public or private school
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24 student group or organization, or
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 1 b. Sales of tangible personal property made by or to
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2 nonprofit parent-teacher associations or organizations
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3 exempt from taxation pursuant to the provisions of the
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4 Internal Revenue Code, 26 U.S.C., Section 501(c)(3),
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5 nonprofit local public or private school foundations
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6 which solicit money or property in the name of any
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7 public or private school or public school district.
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8 The exemption provided by this paragraph for sales made by a
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9 public or private school shall be limited to those public or private
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10 schools accredited by the State Department of Education or
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11 registered by the State Board of Education for purposes of
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12 participating in federal programs. Sale of tangible personal
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13 property in this paragraph shall include sale of admission tickets
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14 and concessions at athletic events;
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15 14. Sales of tangible personal property by:
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16 a. local 4-H clubs,
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17 b. county, regional, or state 4-H councils,
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18 c. county, regional, or state 4-H committees,
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19 d. 4-H leader associations,
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20 e. county, regional, or state 4-H foundations, and
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21 f. authorized 4-H camps and training centers.
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22 The exemption provided by this paragraph shall be limited to
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23 sales for the purpose of raising funds for the benefit of such
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 1 organizations. Sale of tangible personal property exempted by this
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2 paragraph shall include sale of admission tickets;
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3 15. The first Seventy-five Thousand Dollars ($75,000.00) each
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4 year from sale of tickets and concessions at athletic events by each
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5 organization exempt from taxation pursuant to the provisions of the
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6 Internal Revenue Code, 26 U.S.C., Section 501(c)(4);
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7 16. Sales of tangible personal property or services to any
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8 person with whom the Oklahoma Tourism and Recreation Department has
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9 entered into a public contract and which is necessary for carrying
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10 out such contract to assist the Department in the development and
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11 production of advertising, promotion, publicity, and public
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12 relations programs;
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13 17. Sales of tangible personal property or services to fire
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14 departments organized pursuant to Section 592 of Title 18 of the
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15 Oklahoma Statutes which items are to be used for the purposes of the
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16 fire department. Any person making purchases on behalf of any such
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17 fire department shall certify, in writing, on the copy of the
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18 invoice or sales ticket to be retained by the vendor that the
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19 purchases are made for and on behalf of such fire department and set
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20 out the name of such fire department. Any person who wrongfully or
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21 erroneously certifies that the purchases are for any such fire
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22 department or who otherwise violates the provisions of this section
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23 shall be deemed guilty of a misdemeanor and upon conviction thereof,
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 1 shall be fined an amount equal to double the amount of sales tax
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2 involved or incarcerated for not more than sixty (60) days, or both;
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3 18. Complimentary or free tickets for admission to places of
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4 amusement, sports, entertainment, exhibition, display, or other
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5 recreational events or activities which are issued through a box
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6 office or other entity which is operated by a state institution of
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7 higher education with institutional employees or by a municipality
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8 with municipal employees;
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9 19. The first Fifteen Thousand Dollars ($15,000.00) each year
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10 from sales of tangible personal property by fire departments
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11 organized pursuant to Titles 11, 18, or 19 of the Oklahoma Statutes
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12 for the purposes of raising funds for the benefit of the fire
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13 department. Fire departments selling tangible personal property for
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14 the purposes of raising funds shall be limited to no more than six
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15 (6) days each year to raise such funds in order to receive the
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16 exemption granted by this paragraph;
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17 20. Sales of tangible personal property or services to any Boys
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18 & Girls Clubs of America affiliate in this state which is not
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19 affiliated with the Salvation Army and which is exempt from taxation
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20 pursuant to the provisions of the Internal Revenue Code, 26 U.S.C.,
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21 Section 501(c)(3);
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22 21. Sales of tangible per