1 STATE OF OKLAHOMA
2 2nd Session of the 59th Legislature (2024)
3 SENATE BILL 1283 By: Treat
4
5
6 AS INTRODUCED
7 An Act relating to sales tax; amending 68 O.S. 2021,
Sections 1352 and 1354, which relate to definitions
8 and levy of tax upon sales of certain items; defining
terms; levying certain tax rate upon the sale of food
9 and food ingredients; requiring effectiveness of
certain provisions; updating statutory language and
10 reference; and providing an effective date.
11
12
13 BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
14 SECTION 1. AMENDATORY 68 O.S. 2021, Section 1352, is
15 amended to read as follows:
16 Section 1352. As used in the Oklahoma Sales Tax Code:
17 1. “Bottled water” means water that is placed in a safety
18 sealed container or package for human consumption including water
19 that is delivered to the buyer in a reusable container that is not
20 sold with the water. Bottled water shall be calorie free and shall
21 not contain sweeteners or other additives, except that it may
22 contain:
23 a. antimicrobial agents,
24 b. fluoride,
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1 c. carbonation,
2 d. vitamins, minerals, and electrolytes,
3 e. oxygen,
4 f. preservatives, and
5 g. only those flavors, extracts, or essences derived from
6 spice or fruit;
7 2. “Bundled transaction” means the retail sale of two or more
8 products, except real property and services to real property, where
9 the products are otherwise distinct and identifiable, and the
10 products are sold for one nonitemized price. A “bundled
11 transaction” bundled transaction does not include the sale of any
12 products in which the sales price varies, or is negotiable, based on
13 the selection by the purchaser of the products included in the
14 transaction. As used in this paragraph:
15 a. “distinct and identifiable products” does not include:
16 (1) packaging such as containers, boxes, sacks, bags,
17 and bottles, or other materials such as wrapping,
18 labels, tags, and instruction guides, that
19 accompany the retail sale of the products and are
20 incidental or immaterial to the retail sale
21 thereof, including, but not limited to, grocery
22 sacks, shoeboxes, dry cleaning garment bags and
23 express delivery envelopes and boxes,
24
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1 (2) a product provided free of charge with the
2 required purchase of another product. A product
3 is provided free of charge if the sales price of
4 the product purchased does not vary depending on
5 the inclusion of the product provided free of
6 charge, or
7 (3) items included in the definition of gross
8 receipts or sales price, pursuant to this
9 section,
10 b. “one nonitemized price” does not include a price that
11 is separately identified by product on binding sales
12 or other supporting sales-related documentation made
13 available to the customer in paper or electronic form
14 including, but not limited to, an invoice, bill of
15 sale, receipt, contract, service agreement, lease
16 agreement, periodic notice of rates and services, rate
17 card, or price list,
18 A transaction that otherwise meets the definition of a bundled
19 transaction shall not be considered a bundled transaction if it is:
20 (1) the retail sale of tangible personal property and
21 a service where the tangible personal property is
22 essential to the use of the service, and is
23 provided exclusively in connection with the
24
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1 service, and the true object of the transaction
2 is the service,
3 (2) the retail sale of services where one service is
4 provided that is essential to the use or receipt
5 of a second service and the first service is
6 provided exclusively in connection with the
7 second service and the true object of the
8 transaction is the second service,
9 (3) a transaction that includes taxable products and
10 nontaxable products and the purchase price or
11 sales price of the taxable products is de
12 minimis. For purposes of this subdivision, “de
13 minimis” means the seller’s purchase price or
14 sales price of taxable products is ten percent
15 (10%) or less of the total purchase price or
16 sales price of the bundled products. Sellers
17 shall use either the purchase price or the sales
18 price of the products to determine if the taxable
19 products are de minimis. Sellers may not use a
20 combination of the purchase price and sales price
21 of the products to determine if the taxable
22 products are de minimis. Sellers shall use the
23 full term of a service contract to determine if
24 the taxable products are de minimis, or
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1 (4) the retail sale of exempt tangible personal
2 property and taxable tangible personal property
3 where:
4 (a) the transaction includes food and food
5 ingredients, drugs, durable medical
6 equipment, mobility enhancing equipment,
7 over-the-counter drugs, prosthetic devices
8 or medical supplies, and
9 (b) the seller’s purchase price or sales price
10 of the taxable tangible personal property is
11 fifty percent (50%) or less of the total
12 purchase price or sales price of the bundled
13 tangible personal property. Sellers may not
14 use a combination of the purchase price and
15 sales price of the tangible personal
16 property when making the fifty percent (50%)
17 determination for a transaction;
18 2. 3. “Business” means any activity engaged in or caused to be
19 engaged in by any person with the object of gain, benefit, or
20 advantage, either direct or indirect;
21 3. 4. “Candy” means a preparation of sugar, honey, or other
22 natural or artificial sweeteners in combination with chocolate,
23 fruits, nuts, or other ingredients or flavorings in the form of
24
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1 bars, drops, or pieces. Candy shall not include any preparation
2 containing flour or require refrigeration;
3 5. “Commission” or “Tax Commission” means the Oklahoma Tax
4 Commission;
5 4. 6. “Computer” means an electronic device that accepts
6 information in digital or similar form and manipulates it for a
7 result based on a sequence of instructions;
8 5. 7. “Computer software” means a set of coded instructions
9 designed to cause a “computer” computer or automatic data processing
10 equipment to perform a task;
11 6. 8. “Consumer” or “user” means a person to whom a taxable
12 sale of tangible personal property is made or to whom a taxable
13 service is furnished. “Consumer” Consumer or “user” user includes
14 all contractors to whom a taxable sale of materials, supplies,
15 equipment, or other tangible personal property is made or to whom a
16 taxable service is furnished to be used or consumed in the
17 performance of any contract;
18 7. 9. “Contractor” means any person who performs any
19 improvement upon real property and who, as a necessary and
20 incidental part of performing such improvement, incorporates
21 tangible personal property belonging to or purchased by the person
22 into the real property being improved;
23 8. 10. “Dietary supplement” means any product, other than
24 tobacco, intended to supplement the diet that:
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1 a. contains one or more of the following dietary
2 ingredients:
3 (1) a vitamin,
4 (2) a mineral,
5 (3) an herb or other botanical,
6 (4) an amino acid,
7 (5) a dietary substance for use by humans to
8 supplement the diet by increasing the total
9 dietary intake, or
10 (6) a concentrate, metabolite, constituent, extract,
11 or combination of any ingredient described in
12 this division,
13 b. is intended for ingestion in tablet, capsule, powder,
14 softgel, gelcap, or liquid form, or if not intended
15 for ingestion in such a form, is not represented as
16 conventional food and is not represented for use as a
17 sole item of a meal or of the diet, and
18 c. is required to be labeled as a dietary supplement,
19 identifiable by the “Supplemental Facts” box found on
20 the label as required pursuant to 21 CFR, Part 101.36;
21 11. “Drug” means a compound, substance or preparation, and any
22 component of a compound, substance or preparation:
23 a. recognized in the official United States Pharmacopoeia
24 Pharmacopeia, official Homeopathic Pharmacopoeia of
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1 the United States, or official National Formulary, and
2 supplement to any of them,
3 b. intended for use in the diagnosis, cure, mitigation,
4 treatment, or prevention of disease, or
5 c. intended to affect the structure or any function of
6 the body;
7 9. 12. “Electronic” means relating to technology having
8 electrical, digital, magnetic, wireless, optical, electromagnetic,
9 or similar capabilities;
10 10. 13. “Established place of business” means the location at
11 which any person regularly engages in, conducts, or operates a
12 business in a continuous manner for any length of time, that is open
13 to the public during the hours customary to such business, in which
14 a stock of merchandise for resale is maintained, and which is not
15 exempted by law from attachment, execution, or other species of
16 forced sale barring any satisfaction of any delinquent tax liability
17 accrued under the Oklahoma Sales Tax Code;
18 11. 14. “Fair authority” means:
19 a. any county, municipality, school district, public
20 trust or any other political subdivision of this
21 state, or
22 b. any not-for-profit corporation acting pursuant to an
23 agency, operating or management agreement which has
24 been approved or authorized by the governing body of
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1 any of the entities specified in subparagraph a of
2 this paragraph which conduct, operate or produce a
3 fair commonly understood to be a county, district or
4 state fair;
5 12. 15. “Food and food ingredients” mean substances, whether in
6 liquid, concentrated, solid, frozen, dried, or dehydrated form, that
7 are sold for ingestion or chewing by humans and are consumed for
8 their taste or nutritional value. Food and food ingredients shall
9 include bottled water, candy, and soft drinks. Food and food
10 ingredients shall not include alcoholic beverages, dietary
11 supplements, prepared food, and tobacco;
12 16. a. “Gross receipts”, “gross proceeds” or “sales price”
13 means the total amount of consideration, including
14 cash, credit, property and services, for which
15 personal property or services are sold, leased or
16 rented, valued in money, whether received in money or
17 otherwise, without any deduction for the following:
18 (1) the seller’s cost of the property sold,
19 (2) the cost of materials used, labor or service
20 cost,
21 (3) interest, losses, all costs of transportation to
22 the seller, all taxes imposed on the seller, and
23 any other expense of the seller,
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1 (4) charges by the seller for any services necessary
2 to complete the sale, other than delivery and
3 installation charges,
4 (5) delivery charges and installation charges, unless
5 separately stated on the invoice, billing or
6 similar document given to the purchaser, and
7 (6) credit for any trade-in.
8 b. Such term shall not include:
9 (1) discounts, including cash, term, or coupons that
10 are not reimbursed by a third party that are
11 allowed by a seller and taken by a purchaser on a
12 sale,
13 (2) interest, financing, and carrying charges from
14 credit extended on the sale of personal property
15 or services, if the amount is separately stated
16 on the invoice, bill of sale or similar document
17 given to the purchaser, and
18 (3) any taxes legally imposed directly on the
19 consumer that are separately stated on the
20 invoice, bill of sale or similar document given
21 to the purchaser.
22 c. Such term shall include consideration received by the
23 seller from third parties if:
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1 (1) the seller actually receives consideration from a
2 party other than the purchaser and the
3 consideration is directly related to a price
4 reduction or discount on the sale,
5 (2) the seller has an obligation to pass the price
6 reduction or discount through to the purchaser,
7 (3) the amount of the consideration attributable to
8 the sale is fixed and determinable by the seller
9 at the time of the sale of the item to the
10 purchaser, and
11 (4) one of the following criteria is met:
12 (a) the purchaser presents a coupon, certificate
13 or other documentation to the seller to
14 claim a price reduction or discount where
15 the coupon, certificate or documentation is
16 authorized, distributed or granted by a
17 third party with the understanding that the
18 third party will reimburse any seller to
19 whom the coupon, certificate or
20 documentation is presented,
21 (b) the purchaser identifies himself or herself
22 to the seller as a member of a group or
23 organization entitled to a price reduction
24 or discount; provided, a “preferred
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1 customer” card that is available to any
2 patron does not constitute membership in
3 such a group, or
4 (c) the price reduction or discount is
5 identified as a third-party price reduction
6 or discount on the invoice received by the
7