1 STATE OF OKLAHOMA
2 2nd Session of the 59th Legislature (2024)
3 HOUSE BILL 2988 By: West (Josh)
4
5
6 AS INTRODUCED
7 An Act relating to revenue and taxation; 68 O.S.
2021, Section 1357, as last amended by Section 1,
8 Chapter 344, O.S.L. 2023 (68 O.S. Supp. 2023, Section
1357), which relates to exemptions from sales tax;
9 eliminating deadline for certain registration for
certain disabled veterans; updating statutory
10 language; and declaring an emergency.
11
12
13
14 BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
15 SECTION 1. AMENDATORY 68 O.S. 2021, Section 1357, as
16 last amended by Section 1, Chapter 344, O.S.L. 2023 (68 O.S. Supp.
17 2023, Section 1357), is amended to read as follows:
18 Section 1357. Exemptions – General.
19 There are hereby specifically exempted from the tax levied by
20 the Oklahoma Sales Tax Code:
21 1. Transportation of school pupils to and from elementary
22 schools or high schools in motor or other vehicles;
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1 2. Transportation of persons where the fare of each person does
2 not exceed One Dollar ($1.00), or local transportation of persons
3 within the corporate limits of a municipality except by taxicabs;
4 3. Sales for resale to persons engaged in the business of
5 reselling the articles purchased, whether within or without the
6 state, provided that such sales to residents of this state are made
7 to persons to whom sales tax permits have been issued as provided in
8 the Oklahoma Sales Tax Code. This exemption shall not apply to the
9 sales of articles made to persons holding permits when such persons
10 purchase items for their use and which they are not regularly
11 engaged in the business of reselling; neither shall this exemption
12 apply to sales of tangible personal property to peddlers, solicitors
13 and other salespersons who do not have an established place of
14 business and a sales tax permit. The exemption provided by this
15 paragraph shall apply to sales of motor fuel or diesel fuel to a
16 Group Five vendor, but the use of such motor fuel or diesel fuel by
17 the Group Five vendor shall not be exempt from the tax levied by the
18 Oklahoma Sales Tax Code. The purchase of motor fuel or diesel fuel
19 is exempt from sales tax when the motor fuel is for shipment outside
20 this state and consumed by a common carrier by rail in the conduct
21 of its business. The sales tax shall apply to the purchase of motor
22 fuel or diesel fuel in Oklahoma by a common carrier by rail when
23 such motor fuel is purchased for fueling, within this state, of any
24 locomotive or other motorized flanged wheel equipment;
Req. No. 9776 Page 2
1 4. Sales of advertising space in newspapers and periodicals;
2 5. Sales of programs relating to sporting and entertainment
3 events, and sales of advertising on billboards (including signage,
4 posters, panels, marquees or on other similar surfaces, whether
5 indoors or outdoors) or in programs relating to sporting and
6 entertainment events, and sales of any advertising, to be displayed
7 at or in connection with a sporting event, via the Internet,
8 electronic display devices or through public address or broadcast
9 systems. The exemption authorized by this paragraph shall be
10 effective for all sales made on or after January 1, 2001;
11 6. Sales of any advertising, other than the advertising
12 described by paragraph 5 of this section, via the Internet,
13 electronic display devices or through the electronic media including
14 radio, public address or broadcast systems, television (whether
15 through closed circuit broadcasting systems or otherwise), and cable
16 and satellite television, and the servicing of any advertising
17 devices;
18 7. Eggs, feed, supplies, machinery, and equipment purchased by
19 persons regularly engaged in the business of raising worms, fish,
20 any insect, or any other form of terrestrial or aquatic animal life
21 and used for the purpose of raising same for marketing. This
22 exemption shall only be granted and extended to the purchaser when
23 the items are to be used and in fact are used in the raising of
24 animal life as set out above. Each purchaser shall certify, in
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1 writing, on the invoice or sales ticket retained by the vendor that
2 the purchaser is regularly engaged in the business of raising such
3 animal life and that the items purchased will be used only in such
4 business. The vendor shall certify to the Oklahoma Tax Commission
5 that the price of the items has been reduced to grant the full
6 benefit of the exemption. Violation hereof by the purchaser or
7 vendor shall be a misdemeanor;
8 8. Sale of natural or artificial gas and electricity, and
9 associated delivery or transmission services, when sold exclusively
10 for residential use. Provided, this exemption shall not apply to
11 any sales tax levied by a city or town, or a county or any other
12 jurisdiction in this state;
13 9. In addition to the exemptions authorized by Section 1357.6
14 of this title, sales of drugs sold pursuant to a prescription
15 written for the treatment of human beings by a person licensed to
16 prescribe the drugs, and sales of insulin and medical oxygen.
17 Provided, this exemption shall not apply to over-the-counter drugs;
18 10. Transfers of title or possession of empty, partially
19 filled, or filled returnable oil and chemical drums to any person
20 who is not regularly engaged in the business of selling, reselling
21 or otherwise transferring empty, partially filled or filled
22 returnable oil drums;
23
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1 11. Sales of one-way utensils, paper napkins, paper cups,
2 disposable hot containers, and other one-way carry out materials to
3 a vendor of meals or beverages;
4 12. Sales of food or food products for home consumption which
5 are purchased in whole or in part with coupons issued pursuant to
6 the federal food stamp program as authorized by Sections 2011
7 through 2029 of Title 7 of the United States Code, as to that
8 portion purchased with such coupons. The exemption provided for
9 such sales shall be inapplicable to such sales upon the effective
10 date of any federal law that removes the requirement of the
11 exemption as a condition for participation by the state in the
12 federal food stamp program;
13 13. Sales of food or food products, or any equipment or
14 supplies used in the preparation of the food or food products to or
15 by an organization which:
16 a. is exempt from taxation pursuant to the provisions of
17 Section 501(c)(3) of the Internal Revenue Code, 26
18 U.S.C., Section 501(c)(3), and which provides and
19 delivers prepared meals for home consumption to
20 elderly or homebound persons as part of a program
21 commonly known as "Meals on Wheels" or "Mobile Meals",
22 or
23 b. is exempt from taxation pursuant to the provisions of
24 Section 501(c)(3) of the Internal Revenue Code, 26
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1 U.S.C., Section 501(c)(3), and which receives federal
2 funding pursuant to the Older Americans Act of 1965,
3 as amended, for the purpose of providing nutrition
4 programs for the care and benefit of elderly persons;
5 14. a. Sales of tangible personal property or services to or
6 by organizations which are exempt from taxation
7 pursuant to the provisions of Section 501(c)(3) of the
8 Internal Revenue Code, 26 U.S.C., Section 501(c)(3),
9 and:
10 (1) are primarily involved in the collection and
11 distribution of food and other household products
12 to other organizations that facilitate the
13 distribution of such products to the needy and
14 such distributee organizations are exempt from
15 taxation pursuant to the provisions of Section
16 501(c)(3) of the Internal Revenue Code, 26
17 U.S.C., Section 501(c)(3), or
18 (2) facilitate the distribution of such products to
19 the needy.
20 b. Sales made in the course of business for profit or
21 savings, competing with other persons engaged in the
22 same or similar business shall not be exempt under
23 this paragraph;
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1 15. Sales of tangible personal property or services to
2 children's homes which are located on church-owned property and are
3 operated by organizations exempt from taxation pursuant to the
4 provisions of the Internal Revenue Code, 26 U.S.C., Section
5 501(c)(3);
6 16. Sales of computers, data processing equipment, related
7 peripherals, and telephone, telegraph or telecommunications service
8 and equipment for use in a qualified aircraft maintenance or
9 manufacturing facility. For purposes of this paragraph, "qualified
10 aircraft maintenance or manufacturing facility" means a new or
11 expanding facility primarily engaged in aircraft repair, building or
12 rebuilding whether or not on a factory basis, whose total cost of
13 construction exceeds the sum of Five Million Dollars ($5,000,000.00)
14 and which employs at least two hundred fifty (250) new full-time-
15 equivalent employees, as certified by the Oklahoma Employment
16 Security Commission, upon completion of the facility. In order to
17 qualify for the exemption provided for by this paragraph, the cost
18 of the items purchased by the qualified aircraft maintenance or
19 manufacturing facility shall equal or exceed the sum of Two Million
20 Dollars ($2,000,000.00);
21 17. Sales of tangible personal property consumed or
22 incorporated in the construction or expansion of a qualified
23 aircraft maintenance or manufacturing facility as defined in
24 paragraph 16 of this section. For purposes of this paragraph, sales
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1 made to a contractor or subcontractor that has previously entered
2 into a contractual relationship with a qualified aircraft
3 maintenance or manufacturing facility for construction or expansion
4 of such a facility shall be considered sales made to a qualified
5 aircraft maintenance or manufacturing facility;
6 18. Sales of the following telecommunications services:
7 a. Interstate and International "800 service". "800
8 service" means a "telecommunications service"
9 telecommunications service that allows a caller to
10 dial a toll-free number without incurring a charge for
11 the call. The service is typically marketed under the
12 name "800", "855", "866", "877" and "888" toll-free
13 calling, and any subsequent numbers designated by the
14 Federal Communications Commission,
15 b. Interstate and International "900 service". "900
16 service" means an inbound toll "telecommunications
17 service" telecommunications service purchased by a
18 subscriber that allows the subscriber's customers to
19 call in to the subscriber's prerecorded announcement
20 or live service. "900 service" 900 service does not
21 include the charge for: collection services provided
22 by the seller of the "telecommunications services"
23 telecommunications services to the subscriber, or
24 service or product sold by the subscriber to the
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1 subscriber's customer. The service is typically
2 marketed under the name "900" service, and any
3 subsequent numbers designated by the Federal
4 Communications Commission,
5 c. Interstate and International "private communications
6 service". "Private communications service" means a
7 "telecommunications service" telecommunications
8 service that entitles the customer to exclusive or
9 priority use of a communications channel or group of
10 channels between or among termination points,
11 regardless of the manner in which such channel or
12 channels are connected, and includes switching
13 capacity, extension lines, stations and any other
14 associated services that are provided in connection
15 with the use of such channel or channels,
16 d. "Value-added nonvoice data service". "Value-added
17 nonvoice data service" means a service that otherwise
18 meets the definition of "telecommunications services"
19 telecommunications services in which computer
20 processing applications are used to act on the form,
21 content, code or protocol of the information or data
22 primarily for a purpose other than transmission,
23 conveyance, or routing,
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1 e. Interstate and International telecommunications
2 service which is:
3 (1) rendered by a company for private use within its
4 organization, or
5 (2) used, allocated or distributed by a company to
6 its affiliated group,
7 f. Regulatory assessments and charges including charges
8 to fund the Oklahoma Universal Service Fund, the
9 Oklahoma Lifeline Fund and the Oklahoma High Cost
10 Fund, and
11 g. Telecommunications nonrecurring charges including but
12 not limited to the installation, connection, change,
13 or initiation of telecommunications services which are
14 not associated with a retail consumer sale;
15 19. Sales of railroad track spikes manufactured and sold for
16 use in this state in the construction or repair of railroad tracks,
17 switches, sidings, and turnouts;
18 20. Sales of aircraft and aircraft parts provided such sales
19 occur at a qualified aircraft maintenance facility. As used in this
20 paragraph, "qualified aircraft maintenance facility" means a
21 facility operated by an air common carrier including one or more
22 component overhaul support buildings or structures in an area owned,
23 leased, or controlled by the air common carrier, at which there were
24 employed at least two thousand (2,000) full-time-equivalent
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1 employees in the preceding year as certified by the Oklahoma
2 Employment Security Commission and which is primarily related to the
3 fabrication, repair, alteration, modification, refurbishing,
4 maintenance, building, or rebuilding of commercial aircraft or
5 aircraft parts used in air common carriage. For purposes of this
6 paragraph, "air common carrier" shall also include members of an
7 affiliated group as defined by Section 1504 of the Internal Revenue
8 Code, 26 U.S.C., Section 1504. Beginning July 1, 2012, sales of
9 machinery, tools, supplies, equipment, and related tangible personal
10 property and services used or consumed in the repair, remodeling, or
11 maintenance of aircraft, aircraft engines or aircraft component
12 parts which occur at a qualified aircraft maintenance facility;
13 21. Sales of machinery and equipment purchased and used by
14 persons and establishments primarily engaged in computer services
15 and data processing:
16 a. as defined under Industrial Group Numbers 7372 and
17 7373 of the Standard Industrial Classification (SIC)
18 Manual, latest version, which derive at least fifty
19 percent (50%) of their annual gross revenues from the
20 sale of a product or service to an out-of-state buyer
21 or consumer, and
22 b. as defined under Industrial Group Number 7374 of the
23 SIC Manual, latest version, which derive at least
24 eighty percent (80%) of their annual gross revenues
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1 from the sale of a product or service to an out-of-
2 state buyer or consumer.
3 Eligibility for the exemption set out in this paragraph shall be
4 established, subject to review by the Tax Commission, by ann