1 STATE OF OKLAHOMA
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2 2nd Session of the 59th Legislature (2024)
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3 HOUSE BILL 3738 By: Dempsey
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6 AS INTRODUCED
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7 An Act relating to revenue and taxation; amending 68
7 O.S. 2021, Section 1358, which relates to sales tax
8 exemptions for agriculture; expanding definition;
8 defining term; and providing an effective date.
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11 BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
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12 SECTION 1. AMENDATORY 68 O.S. 2021, Section 1358, is
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13 amended to read as follows:
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14 Section 1358. Exemptions – Agriculture.
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15 A. There are hereby specifically exempted from the tax levied
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16 by Section 1350 et seq. of this title:
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17 1. Sales of agricultural products produced in this state by the
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18 producer thereof directly to the consumer or user when such articles
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19 are sold at or from a farm and not from some other place of
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20 business, as follows:
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21 a. farm, orchard or garden products, and
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22 b. dairy products sold by a dairy producer or farmer who
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23 owns all the cows from which the dairy products
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24 offered for sale are produced;
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 1 provided, the provisions of this paragraph shall not be construed as
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2 exempting sales by florists, nursery operators or chicken
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3 hatcheries, or sales of dairy products by any other business except
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4 as set out herein;
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5 2. Livestock, including cattle, horses, mules or other domestic
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6 or draft animals, sold by the producer by private treaty or at a
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7 special livestock sale;
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8 3. Sale of baby chicks, turkey poults and starter pullets used
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9 in the commercial production of chickens, turkeys and eggs, provided
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10 that the purchaser certifies, in writing, on the copy of the invoice
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11 or sales ticket to be retained by the vendor that the pullets will
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12 be used primarily for egg production;
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13 4. Sale of salt, grains, tankage, oyster shells, mineral
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14 supplements, limestone and other generally recognized animal feeds
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15 for the following purposes and subject to the following limitations:
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16 a. feed which is fed to poultry and livestock, including
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17 breeding stock and wool-bearing stock, for the purpose
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18 of producing eggs, poultry, milk or meat for human
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19 consumption,
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20 b. feed purchased in Oklahoma for the purpose of being
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21 fed to and which is fed by the purchaser to horses,
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22 mules or other domestic or draft animals used directly
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23 in the producing and marketing of agricultural
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24 products, and
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 1 c. any stock tonics, water purifying products, stock
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2 sprays, disinfectants or other such agricultural
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3 supplies.
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4 "Poultry" shall not be construed to include any fowl other than
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5 domestic fowl kept and raised for the market or production of eggs.
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6 "Livestock" shall not be construed to include any pet animals such
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7 as dogs, cats, birds or such other fur-bearing animals. This
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8 exemption shall only be granted and extended where the purchaser of
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9 feed that is to be used and in fact is used for a purpose that would
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10 bring about an exemption hereunder executes an invoice or sales
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11 ticket in duplicate on a form to be prescribed by the Oklahoma Tax
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12 Commission. The purchaser may demand and receive a copy of the
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13 invoice or sales ticket and the vendor shall retain a copy;
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14 5. Sales of items to be and in fact used in the production of
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15 agricultural products. Sale of the following items shall be subject
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16 to the following limitations:
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17 a. sales of agricultural fertilizer to any person
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18 regularly engaged, for profit, in the business of
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19 farming or ranching,
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20 b. sales of agricultural fertilizer to any person engaged
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21 in the business of applying such materials on a
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22 contract or custom basis to land owned or leased and
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23 operated by persons regularly engaged, for profit, in
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24 the business of farming or ranching. In addition to
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 1 providing the vendor proof of eligibility as provided
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2 in Section 1358.1 of this title, the purchaser shall
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3 provide the name or names of such owner or lessee and
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4 operator and the location of the lands on which said
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5 materials are to be applied to each such land,
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6 c. sales of agricultural fertilizer, pharmaceuticals and
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7 biologicals to persons engaged in the business of
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8 applying such materials on a contract or custom basis
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9 shall not be considered to be sales to contractors
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10 under this article, and said sales shall not be
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11 considered to be taxable sales within the meaning of
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12 the Oklahoma Sales Tax Code. As used in this section,
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13 "agricultural fertilizer", "pharmaceuticals" and
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14 "biologicals" mean any substance sold and used for
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15 soil enrichment or soil corrective purposes or for
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16 promoting the growth and productivity of plants or
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17 animals,
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18 d. sales of agricultural seed or plants to any person
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19 regularly engaged, for profit, in the business of
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20 farming or ranching. This section shall not be
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21 construed as exempting from sales tax, seed which is
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22 packaged and sold for use in noncommercial flower and
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23 vegetable gardens, and
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 1 e. sales of agricultural chemical pesticides to any
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2 person regularly engaged, for profit, in the business
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3 of farming or ranching. For the purposes of this
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4 subparagraph, "agricultural chemical pesticides" shall
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5 include any substance or mixture of substances
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6 intended for preventing, destroying, repelling or
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7 mitigating any insect, snail, slug, rodent, bird,
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8 nematode, fungus, weed or any other form of
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9 terrestrial or aquatic plant or animal life or virus,
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10 bacteria or other microorganism, except viruses,
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11 bacteria or other microorganisms on or in living man,
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12 or any substance or mixture of substances intended for
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13 use as a plant regulator, defoliant or desiccant.
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14 The exemption provided in this paragraph shall only be granted
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15 and extended to the purchaser where the items are to be used and in
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16 fact are used in the production of agricultural products;
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17 6. Sale of farm machinery, repair parts thereto or fuel, oil,
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18 lubricants and other substances used for operation and maintenance
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19 of the farm machinery to be used directly on a farm or ranch in the
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20 production, cultivation, planting, sowing, harvesting, processing,
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21 spraying, preservation or irrigation of any livestock, poultry,
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22 agricultural or dairy products produced from such lands. The
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23 exemption specified in this paragraph shall apply to such farm
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24 machinery, repair parts or fuel, oil, lubricants and other
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 1 substances used by persons engaged in the business of custom
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2 production, cultivation, planting, sowing, harvesting, processing,
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3 spraying, preservation, or irrigation of any livestock, poultry,
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4 agricultural, or dairy products for farmers or ranchers. The
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5 exemption provided for herein shall not apply to motor vehicles;
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6 7. Sales of supplies, machinery and equipment to persons
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7 regularly engaged in the business of raising evergreen trees for
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8 retail sale in which such trees are cut down on the premises by the
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9 consumer purchasing such tree. This exemption shall only be granted
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10 and extended when the items in fact are used in the raising of such
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11 evergreen trees; and
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12 8. Sales of materials, supplies and equipment to an
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13 agricultural permit holder or to any person with whom the permit
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14 holder has contracted to construct facilities which are or which
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15 will be used directly in the production of any livestock, including,
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16 but not limited to, facilities used in the production and storage of
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17 feed for livestock owned by the permit holder. Any person making
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18 purchases on behalf of the agricultural permit holder shall certify,
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19 in writing, on the copy of the invoice or sales ticket to be
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20 retained by the vendor that the purchases are made for and on behalf
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21 of such permit holder and set out the name and permit number of such
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22 holder. Any person who wrongfully or erroneously certifies that
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23 purchases are for an agricultural permit holder or who otherwise
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24 violates this subsection shall be guilty of a misdemeanor and, upon
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 1 conviction thereof, shall be punishable by a fine of an amount equal
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2 to double the amount of sales tax involved or imprisonment in the
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3 county jail for not more than sixty (60) days or by both such fine
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4 and imprisonment.
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5 B. As used in this section and Section 1358.1 of this title:
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6 1. "Agricultural products" shall include horses and timber; and
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7 2. "Farming" or "farm" shall include the production of timber,
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8 seedling production, and forestry management; and
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9 3. "Ranching" or "ranch" shall include the business, or
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10 facilities for the business, of raising horses.
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11 Provided, sales of items at race meetings as defined in Section
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12 200.1 of Title 3A of the Oklahoma Statutes shall not be exempt
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13 pursuant to the provisions of this section and Section 1358.1 of
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14 this title.
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15 SECTION 2. This act shall become effective November 1, 2024.
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17 59-2-9519 JL 01/05/24
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