1 STATE OF OKLAHOMA 1 2 1st Session of the 59th Legislature (2023) 2 3 SENATE BILL 318 By: Bergstrom 3 4 4 5 5 6 AS INTRODUCED 6 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; modifying procedure for claiming 9 certain exemption; omitting certain penalty for 10 claims of unauthorized purchases; updating statutory 10 language; and providing an effective date. 11 11 12 12 13 BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA: 13 14 SECTION 1. AMENDATORY 68 O.S. 2021, Section 1356, as 14 15 last amended by Section 1, Chapter 394, O.S.L. 2022 (68 O.S. Supp. 15 16 2022, Section 1356), is amended to read as follows: 16 17 Section 1356. Exemptions - Governmental and nonprofit entities. 17 18 There are hereby specifically exempted from the tax levied by 18 19 Section 1350 et seq. of this title: 19 20 1. Sale of tangible personal property or services to the United 20 21 States government or to the State of Oklahoma this state, any 21 22 political subdivision of this state, or any agency of a political 22 23 subdivision of this state; provided, all sales to contractors in 23 24 connection with the performance of any contract with the United 24 Req. No. 1088 Page 1 1 States government, State of Oklahoma this state, or any of its 1 2 political subdivisions shall not be exempted from the tax levied by 2 3 Section 1350 et seq. of this title, except as hereinafter provided; 3 4 2. Sales of property to agents appointed by or under contract 4 5 with agencies or instrumentalities of the United States government 5 6 if ownership and possession of such property transfers immediately 6 7 to the United States government; 7 8 3. Sales of property to agents appointed by or under contract 8 9 with a political subdivision of this state if the sale of such 9 10 property is associated with the development of a qualified federal 10 11 facility, as provided in the Oklahoma Federal Facilities Development 11 12 Act, and if ownership and possession of such property transfers 12 13 immediately to the political subdivision or the state; 13 14 4. Sales made directly by county, district, or state fair 14 15 authorities of this state, upon the premises of the fair authority, 15 16 for the sole benefit of the fair authority or sales of admission 16 17 tickets to such fairs or fair events at any location in the state 17 18 authorized by county, district, or state fair authorities; provided, 18 19 the exemption provided by this paragraph for admission tickets to 19 20 fair events shall apply only to any portion of the admission price 20 21 that is retained by or distributed to the fair authority. As used 21 22 in this paragraph, “fair event” shall be limited to an event held on 22 23 the premises of the fair authority in conjunction with and during 23 24 the time period of a county, district, or state fair; 24 Req. No. 1088 Page 2 1 5. Sale of food in cafeterias or lunchrooms of elementary 1 2 schools, high schools, colleges, or universities which are operated 2 3 primarily for teachers and pupils and are not operated primarily for 3 4 the public or for profit; 4 5 6. Dues paid to fraternal, religious, civic, charitable, or 5 6 educational societies or organizations by regular members thereof, 6 7 provided, such societies or organizations operate under what is 7 8 commonly termed the lodge plan or system, and provided such 8 9 societies or organizations do not operate for a profit which inures 9 10 to the benefit of any individual member or members thereof to the 10 11 exclusion of other members and dues paid monthly or annually to 11 12 privately owned scientific and educational libraries by members 12 13 sharing the use of services rendered by such libraries with students 13 14 interested in the study of geology, petroleum engineering, or 14 15 related subjects; 15 16 7. Sale of tangible personal property or services to or by 16 17 churches, except sales made in the course of business for profit or 17 18 savings, competing with other persons engaged in the same, or a 18 19 similar business or sale of tangible personal property or services 19 20 by an organization exempt from federal income tax pursuant to 20 21 Section 501(c)(3) of the Internal Revenue Code of 1986, as amended, 21 22 made on behalf of or at the request of a church or churches if the 22 23 sale of such property is conducted not more than once each calendar 23 24 year for a period not to exceed three (3) days by the organization 24 Req. No. 1088 Page 3 1 and proceeds from the sale of such property are used by the church 1 2 or churches or by the organization for charitable purposes; 2 3 8. The amount of proceeds received from the sale of admission 3 4 tickets which is separately stated on the ticket of admission for 4 5 the repayment of money borrowed by any accredited state-supported 5 6 college or university or any public trust of which a county in this 6 7 state is the beneficiary, for the purpose of constructing or 7 8 enlarging any facility to be used for the staging of an athletic 8 9 event, a theatrical production, or any other form of entertainment, 9 10 edification, or cultural cultivation to which entry is gained with a 10 11 paid admission ticket. Such facilities include, but are not limited 11 12 to, athletic fields, athletic stadiums, field houses, amphitheaters, 12 13 and theaters. To be eligible for this sales tax exemption, the 13 14 amount separately stated on the admission ticket shall be a 14 15 surcharge which is imposed, collected, and used for the sole purpose 15 16 of servicing or aiding in the servicing of debt incurred by the 16 17 college or university to effect the capital improvements 17 18 hereinbefore described; 18 19 9. Sales of tangible personal property or services to the 19 20 council organizations or similar state supervisory organizations of 20 21 the Boy Scouts of America, Girl Scouts of the U.S.A., and Camp Fire 21 22 USA; 22 23 10. Sale of tangible personal property or services to any 23 24 county, municipality, rural water district, public school district, 24 Req. No. 1088 Page 4 1 city-county library system, the institutions of The Oklahoma State 1 2 System of Higher Education, the Grand River Dam Authority, the 2 3 Northeast Oklahoma Public Facilities Authority, the Oklahoma 3 4 Municipal Power Authority, City of Tulsa-Rogers County Port 4 5 Authority, Muskogee City-County Port Authority, the Oklahoma 5 6 Department of Veterans Affairs, the Broken Bow Economic Development 6 7 Authority, Ardmore Development Authority, Durant Industrial 7 8 Authority, Oklahoma Ordnance Works Authority, Central Oklahoma 8 9 Master Conservancy District, Arbuckle Master Conservancy District, 9 10 Fort Cobb Master Conservancy District, Foss Reservoir Master 10 11 Conservancy District, Mountain Park Master Conservancy District, 11 12 Waurika Lake Master Conservancy District and the Office of 12 13 Management and Enterprise Services only when carrying out a public 13 14 construction contract on behalf of the Oklahoma Department of 14 15 Veterans Affairs, and effective July 1, 2022, the University 15 16 Hospitals Trust, or to any person with whom any of the above-named 16 17 subdivisions or agencies of this state has duly entered into a 17 18 public contract pursuant to law, necessary for carrying out such 18 19 public contract or to any subcontractor to such a public contract. 19 20 Any person making purchases on behalf of such subdivision or agency 20 21 of this state shall certify, in writing, on the copy of the invoice 21 22 or sales ticket to be retained by the vendor that the purchases are 22 23 made for and on behalf of such subdivision or agency of this state 23 24 and set out the name of such public subdivision or agency. Any 24 Req. No. 1088 Page 5 1 person who wrongfully or erroneously certifies that purchases are 1 2 for any of the above-named subdivisions or agencies of this state or 2 3 who otherwise violates this section shall be guilty of a misdemeanor 3 4 and upon conviction thereof shall be fined an amount equal to double 4 5 the amount of sales tax involved or incarcerated for not more than 5 6 sixty (60) days or both; 6 7 11. Sales of tangible personal property or services to private 7 8 institutions of higher education and private elementary and 8 9 secondary institutions of education accredited by the State 9 10 Department of Education or registered by the State Board of 10 11 Education for purposes of participating in federal programs or 11 12 accredited as defined by the Oklahoma State Regents for Higher 12 13 Education which are exempt from taxation pursuant to the provisions 13 14 of the Internal Revenue Code, 26 U.S.C., Section 501(c)(3) including 14 15 materials, supplies, and equipment used in the construction and 15 16 improvement of buildings and other structures owned by the 16 17 institutions and operated for educational purposes. 17 18 Any person, firm, agency, or entity making purchases on behalf 18 19 of any institution, agency, or subdivision in this state, shall 19 20 certify in writing, on the copy of the invoice or sales ticket the 20 21 nature of the purchases, and violation of this paragraph shall be a 21 22 misdemeanor as set forth in paragraph 10 of this section; 22 23 12. Tuition and educational fees paid to private institutions 23 24 of higher education and private elementary and secondary 24 Req. No. 1088 Page 6 1 institutions of education accredited by the State Department of 1 2 Education or registered by the State Board of Education for purposes 2 3 of participating in federal programs or accredited as defined by the 3 4 Oklahoma State Regents for Higher Education which are exempt from 4 5 taxation pursuant to the provisions of the Internal Revenue Code, 26 5 6 U.S.C., Section 501(c)(3); 6 7 13. a. Sales of tangible personal property made by: 7 8 (1) a public school, 8 9 (2) a private school offering instruction for grade 9 10 levels kindergarten through twelfth grade, 10 11 (3) a public school district, 11 12 (4) a public or private school board, 12 13 (5) a public or private school student group or 13 14 organization, 14 15 (6) a parent-teacher association or organization 15 16 other than as specified in subparagraph b of this 16 17 paragraph, or 17 18 (7) public or private school personnel for purposes 18 19 of raising funds for the benefit of a public or 19 20 private school, public school district, public or 20 21 private school board, or public or private school 21 22 student group or organization, or 22 23 b. Sales of tangible personal property made by or to 23 24 nonprofit parent-teacher associations or organizations 24 Req. No. 1088 Page 7 1 exempt from taxation pursuant to the provisions of the 1 2 Internal Revenue Code, 26 U.S.C., Section 501(c)(3), 2 3 nonprofit local public or private school foundations 3 4 which solicit money or property in the name of any 4 5 public or private school or public school district. 5 6 The exemption provided by this paragraph for sales made by a 6 7 public or private school shall be limited to those public or private 7 8 schools accredited by the State Department of Education or 8 9 registered by the State Board of Education for purposes of 9 10 participating in federal programs. Sale of tangible personal 10 11 property in this paragraph shall include sale of admission tickets 11 12 and concessions at athletic events; 12 13 14. Sales of tangible personal property by: 13 14 a. local 4-H clubs, 14 15 b. county, regional, or state 4-H councils, 15 16 c. county, regional, or state 4-H committees, 16 17 d. 4-H leader associations, 17 18 e. county, regional, or state 4-H foundations, and 18 19 f. authorized 4-H camps and training centers. 19 20 The exemption provided by this paragraph shall be limited to 20 21 sales for the purpose of raising funds for the benefit of such 21 22 organizations. Sale of tangible personal property exempted by this 22 23 paragraph shall include sale of admission tickets; 23 24 24 Req. No. 1088 Page 8 1 15. The first Seventy-five Thousand Dollars ($75,000.00) each 1 2 year from sale of tickets and concessions at athletic events by each 2 3 organization exempt from taxation pursuant to the provisions of the 3 4 Internal Revenue Code, 26 U.S.C., Section 501(c)(4); 4 5 16. Sales of tangible personal property or services to any 5 6 person with whom the Oklahoma Tourism and Recreation Department has 6 7 entered into a public contract and which is necessary for carrying 7 8 out such contract to assist the Department in the development and 8 9 production of advertising, promotion, publicity, and public 9 10 relations programs; 10 11 17. Sales of tangible personal property or services to fire 11 12 departments organized pursuant to Section 592 of Title 18 of the 12 13 Oklahoma Statutes which items are to be used for the purposes of the 13 14 fire department. Any person making purchases on behalf of any such 14 15 fire department shall certify, in writing, on the copy of the 15 16 invoice or sales ticket to be retained by the vendor that the 16 17 purchases are made for and on behalf of such fire department and set 17 18 out the name of such fire department. Any person who wrongfully or 18 19 erroneously certifies that the purchases are for any such fire 19 20 department or who otherwise violates the provisions of this section 20 21 shall be deemed guilty of a misdemeanor and upon conviction thereof, 21 22 shall be fined an amount equal to double the amount of sales tax 22 23 involved or incarcerated for not more than sixty (60) days, or both; 23 24 24 Req. No. 1088 Page 9 1 18. Complimentary or free tickets for admission to places of 1 2 amusement, sports, entertainment, exhibition, display, or other 2 3 recreational events or activities which are issued through a box 3 4 office or other entity which is operated by a state institution of 4 5 higher education with institutional employees or by a municipality 5 6 with municipal employees; 6 7 19. The first Fifteen Thousand Dollars ($15,000.00) each year 7 8 from sales of tangible personal property by fire departments 8 9 organized pursuant to Titles 11, 18, or 19 of the Oklahoma Statutes 9 10 for the purposes of raising funds for the benefit of the fire 10 11 department. Fire departments selling tangible personal property for 11 12 the purposes of raising funds shall be limited to no more than six 12 13 (6) days each year to raise such funds in order to receive the 13 14 exemption granted by this paragraph; 14 15 20. Sales of tangible personal property or services to any Boys 15 16 & Girls Clubs of America affiliate in this state which is not 16 17 affiliated with the Salvation Army and which is exempt from taxation 17 18 pursuant to the provisions of the Internal Revenue Code, 26 U.S.C., 18 19 Section 501(c)(3); 19 20 21. Sales of tangible personal property or services to any 20 21 organization, which takes court-adjudicated juveniles for purposes