(A) There is hereby specifically exempted from the tax levied by this subchapter the gross receipts or gross proceeds exempted from the State Sales Tax Code, being 68 O.S. §§ 1350 et seq., inclusive, but not exclusive of, and derived from the:
(1) Sale of gasoline or motor fuel on which the motor fuel tax, gasoline excise tax, or special fuels tax levied by state law has been paid;
(2) Sale of motor vehicles or any optional equipment or accessories attached to motor vehicles on which the State Motor Vehicle Excise Tax levied by state law has been paid;
(3) Sale of a crude petroleum or natural or casinghead gas and other products subject to gross production tax under state law. This exemption shall not apply when such products are sold to consumer or user for consumption or use, except when used for injection into the earth for the purpose of promoting or facilitating the production of oil or gas. This division (A) shall not operate to increase or repeal the gross production tax levied by the laws of the state; and
(4) Sale of aircraft on which the tax levied pursuant to 68 O.S. §§ 6001 through 6004 has been paid.
(Prior Code, § 7-207)
(B) There are hereby specifically exempted from the tax levied by this subchapter:
(1) Sale of tangible personal property or services to the United States government or to the state, any political subdivision of the state or any agency of a political subdivision of the state; provided, all sales to contractors in connection with the performance of any contract with the United States government, state, or any of its political subdivisions shall not be exempted from the tax levied by this subchapter, except as hereinafter provided;
(2) Sales of property to agents appointed or contracted with by agencies or instrumentalities of the United States government if ownership and possession of such property transfers immediately to the United States government;
(3) Sales made directly by county, district, or state fair authorities of the state, upon the premises of the fair authority, for the sole benefit of the fair authority;
(4) Sale of food in cafeterias or lunch rooms of elementary schools, high schools, colleges, or universities which are operated primarily for teachers and pupils, and are not operated primarily for the public or for profit;
(5) Dues paid to fraternal, religious, civic, charitable, or educational societies or organizations by regular members thereof, provided, such societies or organizations operate under what is commonly termed the lodge plan or system, and provided such societies or organizations do not operate for a profit which inures to the benefit of any individual member or members thereof to the exclusion of other members;
(6) Sale of tangible personal property or services to or by churches, except sales made in the course of business for profit or savings, competing with other persons engaged in the same or similar business;
(7) The amount of proceeds received from the sale of admission tickets which is separately stated on the ticket of admission for the repayment of money borrowed by any accredited state-supported college or university for the purpose of constructing or enlarging any facility to be used for the staging of an athletic event, a theatrical production, or any other form of entertainment, edification, or cultural cultivation to which entry is gained with a paid admission ticket. Such facilities include, but are not limited to, athletic fields, athletic stadiums, field houses, amphitheaters, and theaters. To be eligible for this sales tax exemption, the amount separately stated on the admission ticket shall be a surcharge which is imposed, collected, and used for the sole purpose of servicing or aiding in the servicing of debt incurred by the college or university to effect the capital improvements hereinbefore described;
(8) Sales of tangible personal property or services to the Board of Trustees organizations or similar state supervisory organizations of the Boy Scouts of America, Girl Scouts of U.S.A., and the Campfire Girls shall be exempt from sales tax;
(9) Sale of tangible personal property or services to any county, municipality, public school district, the institutions of the state system of higher education and the Grand River Dam Authority, or to any person with whom any of the above named subdivisions or agencies of the state has duly entered into a public contract pursuant to law necessary for carrying out such public contract or to any subcontractor to such a public contract. Any person making purchases on behalf of such subdivision or agency of the state shall certify, in writing, on the copy of the invoice or sales ticket to be retained by the vendor that the purchases are made for and on behalf of such subdivision or agency of the state and set out the name of such public subdivision or agency;
(10) Sales of tangible personal property or services to private institutions of higher education and private elementary and secondary institutions of education accredited by the State Department of Education or registered by the State Board of Education for purposes of participating in federal programs or accredited as defined by the State Regents for Higher Education which are exempt from taxation pursuant to the provisions of § 501(c)(3) of the Internal Revenue Code, including materials, supplies, and equipment used in the construction and improvement of buildings and other structures owned by the institutions and operated for educational purposes. Any person, firm, agency, or entity making purchases on behalf of any institution, agency, or subdivision in the state, shall certify in writing, on the copy of the invoice of sales ticket the nature of the purchases, and violation of this act shall be a misdemeanor as set forth in § 37.99(B);
(11) Tuition and educational fees paid to private institutions of higher education and private elementary and secondary institutions of education accredited by the State Department of Education or registered by the State Board of Education for purposes of participating in federal programs or accredited as defined by the State Regents for Higher Education which are exempt from taxation pursuant to the provisions of the § 501(c)(3) of the Internal Revenue Code; and
(12) Sales of tangible personal property made by public or private school for grade levels kindergarten through twelfth grade, a public school district, public school board, public school student group or organization, or public school district personnel for purposes of raising finds for the benefit of such school, school district, school board, student group, or organization. For purposes of this division (B)(12), PUBLIC OR PRIVATE SCHOOL shall mean any public or private institution of education accredited by the State Department of Education or registered by the State Board of Education for purposes of participating in federal programs. Sale of tangible personal property in this division (B)(12) shall not include sale of admission tickets or concessions at athletic events.
(Prior Code, § 7-208)
(C) There are hereby specifically exempted from the tax levied by this subchapter:
(1) Transportation of school pupils to and from elementary schools or high schools in motor or other vehicles;
(2) Transportation of persons where the fare of each person does not exceed $1, or local transportation of persons within the corporate limits of a municipality except by taxicab;
(3) Carrier sales of newspapers and periodicals made directly to consumers, other sales of newspapers and periodicals where any individual transaction does not exceed $0.75. A CARRIER is a person who regularly delivers newspapers or periodicals to subscribers on an assigned route;
(4) Sales for resale to persons engaged in the business of reselling the articles purchased, whether within or without the state, provided that such sales to residents of the state are made to persons to whom sales tax permits have been issued as provided in this subchapter. This exemption shall not apply to the sales of articles made to persons holding permits when such persons purchase items for their use, and which they are not regularly engaged in the business of reselling; neither shall this exemption apply to sales of tangible personal property to peddlers, solicitors, and other salespeople who do not have an established place of business and a sales tax permit;
(5) Sales of advertising space in newspapers and periodicals, and billboard advertising service, and any advertising through the electronic media, including radio, television, and cable television;
(6) Eggs, feed, supplies, machinery, and equipment purchased by persons regularly engaged in the business of raising worms, fish, and insects or any other form of terrestrial or aquatic animal life, and used for the purpose of raising the same for marketing. This exemption shall only be granted and extended to the purchaser when the items are to be used and in fact are used in the raising of animal life as set out above. Each purchaser shall certify, in writing, on the invoice or sales ticket retained by the vendor that he or she is regularly engaged in the business of raising such animal life, and that the items purchased will be used only in such business. The vendor shall certify to the State Tax Commission that the price of the items has been reduced to grant the full benefit of the exemption. Violation hereof by the purchaser or vendor shall be a misdemeanor;
(7) Sales of medicine or drugs prescribed for the treatment of human beings by a person licensed to prescribe the medicine or drugs. This exemption shall not apply to proprietary or patent medicines;
(8) Transfers of title or possession of empty, partially filled, or filled returnable oil drums to any person who is not regularly engaged in the business of selling, reselling, or otherwise transferring empty, partially filled, or filled returnable oil drums;
(9) Sales of food or food products for home consumption which are purchased in whole or in part with coupons issued pursuant to the federal food stamp program, as authorized by 7 U.S.C. §§ 2011 through 2029, as to that portion purchased with such coupons. The exemption provided for such sales shall be inapplicable to such sales upon the effective date of any federal law that removes the requirement of the exemption as a condition for participation by the state in the Federal Food Stamp Program; and
(10) Nothing herein shall be construed as limiting or prohibiting the town from levying and collecting taxes on the sale of natural or artificial gas and electricity, whether sold for residential or commercial purposes. Any sales tax levied by the town on natural or artificial gas and electricity shall be in effect regardless of ordinance or contractual provisions referring to previously imposed state sales tax on such items.
(Prior Code, § 7-209)
(D) There are hereby specifically exempted from the tax levied by 68 O.S. §§ 1350 et seq., the State Sales Tax Code:
(1) Sales of agricultural products produced in the state by the producer thereof directly to the consumer or user when such articles are sold at or from a farm and not from some other place of business, as follows:
(a) Farm, orchard, or garden products; and
(b) Dairy products sold by a dairy producer or farmer who owns all the cows from which the dairy products offered for sale are produced; provided, the provisions of this division (D) shall not be construed as exempting sales by florists, nursery operators, or chicken hatcheries, or sales of dairy products by any other business except as set out herein.
(2) Livestock, including cattle, horses, mules, or other domestic or draft animals, sold by the producer by private treaty or at a special livestock sale;
(3) Sale of baby chicks, turkey poults, and starter pullets used in the commercial production of chickens, turkeys, and eggs, provided that the purchaser certifies, in writing, on the copy of the invoice or sales ticket to be retained by the vendor that the pullets will be used primarily for egg production;
(4) (a) Sale of salt, grains, tankage, oyster shells, mineral supplements, limestone, and other generally recognized animal feeds for the following purposes and subject to the following limitations:
1. Feed which is fed to poultry and livestock, including breeding stock and wool-bearing stock, for the purpose of producing eggs, poultry, milk, or meat for human consumption;
2. Feed purchased in the state for the purpose of being fed to and which is fed by the purchaser to horses, mules, or other domestic or draft animals used directly in the producing and marketing of agricultural products; and
3. Any stock tonics, water purifying products, stock sprays, disinfectants, or other such agricultural supplies.
(b) POULTRY shall not be construed to include any fowl other than domestic fowl kept and raised for the market or production of eggs. LIVESTOCK shall not be construed to include any pet animals such as dogs, cats, birds, or such other fur-bearing animals. This exemption shall only be granted and extended where the purchaser of feed that is to be used and in fact is used for a purpose that would bring about an exemption hereunder executes an invoice or sales ticket in duplicate on a form to be prescribed by the State Tax Commission. The purchaser may demand and receive a copy of the invoice or sales ticket, and the vendor shall retain a copy;
(5) Sales of items to be and in fact used in the production of agricultural products. Sale of the following items shall be subject to the following limitations:
(a) Sales of agricultural fertilizer to any person regularly engaged, for profit, in the business of farming or ranching;
(b) Sales of agricultural fertilizer to any person engaged in the business of applying such materials on a contract or custom basis to land owned or leased and operated by persons regularly engaged, for profit, in the business of farming or ranching. In addition to providing the vendor proof of eligibility, as provided in 68 O.S. § 1358.1, the State Sales Tax Code, the purchaser shall provide the name or names of such owner or lessee and operator, and the location of the lands on which said materials are to be applied to each such land;
(c) Sales of agricultural fertilizer, pharmaceuticals, and biologicals to persons engaged in the business of applying such materials on a contract or custom basis shall not be considered to be sales to contractors under this division (D), and said sales shall not be considered to be taxable sales within the meaning of the State Sales Tax Code. As used in this division (D)(5)(c), AGRICULTURAL FERTILIZER, PHARMACEUTICALS, and BIOLOGICALS mean any substance sold and used for soil enrichment or soil corrective purposes, or for promoting the growth and productivity of plants or animals;
(d) Sales of agricultural seed or plants to any person regularly engaged, for profit, in the business of farming or ranching. This division (D) shall not be construed as exempting from sales tax seed which is packaged and sold for use in noncommercial flower and vegetable gardens;
(e) 1. Sales of agricultural chemical pesticides to any person regularly engaged, for profit in the business of farming or ranching. For the purposes of this division (D)(5)(e), AGRICULTURAL CHEMICAL PESTICIDES shall include any substance or mixture of substances intended for preventing, destroying, repelling, or mitigating any insect, snail, slug, rodent, bird, nematode, fungus, weed, or any other form of terrestrial or aquatic plant or animal life, or virus, bacteria, or other microorganism, except viruses, bacteria, or other microorganisms on or in living humans, or any substance or mixture of substances intended for use as a plant regulator, defoliant, or desiccant.
2. The exemption provided in this division (D)(5)(e) shall only be granted and extended to the purchaser where the items are to be used and in fact are used in the production of agricultural products.
(f) Sale of farm machinery, repair parts thereto or fuel, oil, lubricants, and other substances used for operation and maintenance of the farm machinery to be used directly on a farm or ranch in the production, cultivation, planting, sowing, harvesting, processing, spraying, preservation, or irrigation of any livestock, poultry, agricultural, or dairy products produced from such lands. The exemption specified in this division (D)(5)(f) shall apply to such farm machinery, repair parts or fuel, oil, lubricants, and other substances used by persons engaged in the business of custom production, cultivation, planting, sowing, harvesting, processing, spraying, preservation, or irrigation of any livestock, poultry, agricultural, or dairy products for farmers or ranchers. The exemption provided for herein shall not apply to motor vehicles;
(g) Sales of supplies, machinery, and equipment to persons regularly engaged in the business of raising evergreen trees for retail sale in which such trees are cut down on the premises by the consumer purchasing such tree. This exemption shall only be granted and extended when the items in fact are used in the raising of such evergreen trees; and
(h) 1. Sales of materials, supplies, and equipment to an agricultural permit holder or to any person with whom the permit holder has contracted to construct facilities which are or which will be used directly in the production of any livestock, including, but not limited to, facilities used in the production and storage of feed for livestock owned by the permit holder. Any person making purchases on behalf of the agricultural permit holder shall certify, in writing, on the copy of the invoice or sales ticket to be retained by the vendor that the purchases are made for and on behalf of such permit holder and set out the name and permit number of such holder.
2. As used in this section:
a. AGRICULTURAL PRODUCTS shall include horses; and
b. RANCHING or RANCH shall include the business, or facilities for the business, of raising horses.
3. Exemptions for agriculture, and proof of eligibility are as follows.
a. In order to qualify for any exemption authorized by 68 O.S. § 1358 of the State Sales Tax Code, at the time of sale, the person to whom the sale is made shall be required to furnish the vendor proof of eligibility for the exemption as required by this division (D)(5)(h)3.
b. All vendors shall honor the proof of eligibility for sales tax exemption as authorized by this division (D)(5)(h)3. and sales to a person providing such proof shall be exempt from the tax levied by this division (D)(5)(h)3.
c. The agricultural exemption permit, the size and design of which shall be prescribed by the State Tax Commission, shall constitute proof of eligibility for sales tax exemptions. The permit shall be obtained by listing personal property used in farming or ranching by the person with the County Assessor each year as provided by law. If the Assessor determines that the personal property is correctly listed and assessed for ad valorem taxation, and the County Treasurer certifies whether the person has delinquent accounts appearing on the personal property tax lien docket in the County Treasurer’s office, the Assessor shall certify the assessment upon a form prescribed by the State Tax Commission. One copy shall be retained by the Assessor, one copy shall be forwarded to the State Tax Commission and one copy shall be given to the person listing the personal property. Upon verification that the applicant qualifies for the exemptions, and that the applicant has no delinquent accounts appearing on the personal property tax lien docket in the office of the County Treasurer, a permit shall be issued as prescribed by this division (D)(5)(h)3. The permit shall be renewable every three years in the manner provided by this section.
d. A person who does not otherwise qualify for a permit pursuant to division (D)(5)(h)3.c. above, except as provided in division (D)(5)(h)3.e. below, shall file with the State Tax Commission an application for an agricultural exemption permit constituting proof of eligibility for the sales tax exemptions, setting forth such information as the Tax Commission may require. The application shall be certified by the applicant that the applicant is engaged in custom farming operations or in the business of farming or ranching. If the applicant is a corporation, the application shall be certified by a legally constituted officer thereof.
e. Except as provided in this division (D)(5)(e), for a person who is a resident of another state and who is engaged in custom farming operations in the state, the person shall provide the vendor proof of residency, the name, address, and telephone number of the person engaging the custom farmer and certification on the face of the invoice, under the penalty of perjury, that the property purchased shall be used in agricultural production as proof of eligibility for the sales tax exemption. Any person who is a resident of another state and who is engaged in custom farming operations in the state and who owns property in the state, shall obtain proof of eligibility as provided in division (D)(5)(h)3.c. or (D)(5)(h)3.d. above.
f. If an agricultural exemption permit holder purchases tangible personal property from a vendor on a regular basis, the permit holder may furnish the vendor proof of eligibility as provided for in division (D)(5)(h)3.c. or (D)(5)(h)3.d. above, and the vendor may subsequently make sales of tangible personal property to the permit holder without requiring proof of eligibility for each subsequent sale. Provided, the permit holder shall notify the vendor of all purchases which are not exempt from sales tax, and remit the applicable amount of tax thereon. If the permit holder fails to notify the vendor of purchases not exempt from sales tax, then sufficient grounds shall exist for the State Tax Commission to cancel the agricultural exemption permit of the permit holder who so failed to notify the vendor.
(Prior Code, § 7-210)
(E) There are hereby specifically exempted from the tax levied:
(1) Sales of goods, wares, merchandise, tangible personal property, machinery, and equipment to a manufacturer for use in a manufacturing operation. Goods, wares, merchandise, property, machinery, and equipment used in a non-manufacturing activity or process shall not be eligible for the exemption provided for in this division (E) by virtue of the activity or process being performed in conjunction with or integrated into a manufacturing operation;
(2) Ethyl alcohol, when sold and used for the purpose of blending same with motor fuel on which motor fuel tax is levied;
(3) Sales of containers when sold to a person regularly engaged in the business of reselling empty or filled containers, or when purchased for the purpose of packaging raw products of farm, garden, or orchard for resale to the consumer or processor. This exemption shall not apply to the sale of any containers used more than once and which are ordinarily known as returnable containers, except returnable soft drink bottles and the cartons, crates, pallets, and containers used to transport returnable soft drink bottles. Each and every transfer of title or possession of such returnable containers in the state to any person who is not regularly engaged in the business of selling, reselling, or otherwise transferring empty or filled containers shall be taxable under this division (E). Additionally, this exemption shall not apply to the sale of labels or other materials delivered along with items sold but which are not necessary or absolutely essential to the sale of the sold merchandise;
(4) Sales of or transfers of title to, or possession of any containers, after June 30, 1987, used or to be used more than once and which are ordinarily known as returnable containers and which do or will contain beverages, defined by 37A O.S. § 1-103, or water for human consumption and the cartons, crates, pallets, and containers used to transport such returnable containers;
(5) Sale of tangible personal property when sold by the manufacturer to a person who transports it to a state other than the state for immediate, and exclusive use in a state other than this state. Provided, no sales at a retail outlet shall qualify for the exemption under this division (E)(5);
(6) Machinery, equipment, fuels, and chemicals or other materials incorporated into and directly used or consumed in the process of treatment to substantially reduce the volume or harmful properties of hazardous waste at treatment facilities specifically permitted pursuant to the State Hazardous Waste Management Act, being 27A O.S. §§ 2-7-101 et seq., and operated at the place of waste generation, or facilities approved by the Department of Environmental Quality for the cleanup of a site of contamination. The term HAZARDOUS WASTE may include low-level radioactive waste for the purpose of this division (E)(6);
(7) (a) Sales of tangible personal property to a qualified manufacturer or distributor to be consumed or incorporated in a new manufacturing or distribution facility or to expand an existing manufacturing or distribution facility. For purposes of this division (E)(7)(a), sales made to a contractor or subcontractor that has previously entered into a contractual relationship with a qualified manufacturer or distributor for construction or expansion of a manufacturing or distribution facility shall be considered sales made to a qualified manufacturer or distributor.
(b) For the purposes of this division (E)(7), QUALIFIED MANUFACTURER OR DISTRIBUTOR means:
1. Any manufacturing enterprise whose total cost of construction of a new or expanded facility exceeds the sum of $5,000,000, and in which at least 100 new full-time-equivalent employees, as certified by the State Employment Security Commission, are added and maintained for a period of at least 36 months as a direct result of the new or expanded facility;
2. Any manufacturing enterprise whose total cost of construction of a new or expanded facility exceeds the sum of $10,000,000, and the combined cost of construction material, machinery, equipment, and other tangible personal property exempt from sales tax under the provisions of this division (E)(7)(b)2. exceeds the sum of $50,000,000 and in which at least 75 new full-time-equivalent employees, as certified by the State Employment Security Commission, are added and maintained for a period of at least 36 months as a direct result of the new or expanded facility;
3. Any manufacturing enterprise whose total cost of construction of an expanded facility exceeds the sum of $300,000,000, and in which the manufacturer has and maintains an average employment level of at least 1,750 full-time-equivalent employees, as certified by the Employment Security Commission; or
4. a. Any enterprise primarily engaged in the general wholesale distribution of groceries defined or classified in the North American Industry Classification System (NAICS) manual under Industry Groups No. 4244 and 4245, and which has at least 75% of its total sales to in-state customers or buyers, and whose total cost of construction of a new or expanded facility exceeds the sum of $40,000,000 with such construction commencing on or after July 1, 2005, and before December 31, 2005, and which at least 50 new full-time-equivalent employees, as certified by the State Employment Security Commission, are added and maintained for a period of at least 36 months as a direct result of the new or expanded facility.
b. For purposes of this division (E)(7)(b)4.b., the total cost of construction shall include building and construction material and engineering and architectural fees or charges directly associated with the construction of a new or expanded facility. The total cost of construction shall not include attorney’s fees. For purposes of division (E)(7)(b)3. above, the total cost of construction shall also include the cost of qualified depreciable property and labor services performed in the construction of an expanded facility. The employment requirement of this division (E)(7)(b)4.b. can be satisfied by the employment of a portion of the required number of new full-time-equivalent employees at a manufacturing or distribution facility that is related to or supported by the new or expanded manufacturing or distribution facility as long as both facilities are owned by one person or business entity. For purposes of this division (E)(7)(b)4.b., MANUFACTURING FACILITY shall mean building and land improvements used in manufacturing as defined by the Standard Industrial Classification Code, and shall also mean building and land improvements used for the purpose of packing, repackaging, labeling, or assembling for distribution to market, products at least 70% of which are made in the state by the same company but at an off-site, in-state manufacturing or distribution facility or facilities. It shall not include a retail outlet unless the retail outlet is operated in conjunction with, and on the same site or premises as, the manufacturing facility. Up to 10% of the square feet of a manufacturing or distribution facility building may be devoted to office space used to provide clerical support for the manufacturing operation. Such 10% may be in a separate building as long as it is part of the same contiguous tract of property on which the manufacturing or distribution facility is located. Only sales of tangible personal property made after June 1, 1988, shall be eligible for the exemption provided by this division (E)(7)(b)4.b. The exemption authorized pursuant to division (E)(7)(b)4.a. above shall only become effective when the governing body of the municipality in which the enterprise is located approves a resolution expressing the municipality’s support for the construction for such new or expanded facility. Upon approval by the municipality, the municipality shall forward a copy of such resolution to the State Tax Commission.
(8) Sales of tangible personal property purchased and used by a licensed radio or television station in broadcasting. This exemption shall not apply unless such machinery and equipment is used directly in the manufacturing process, is necessary for the proper production of a broadcast signal or is such that the failure of the machinery or equipment to operate would cause broadcasting to cease. This exemption begins with the equipment used in producing live programming or the electronic equipment directly behind the satellite receiving dish or antenna, and ends with the transmission of the broadcast signal from the broadcast antenna system. For purposes of this division (E)(8), PROPER PRODUCTION shall include, but not be limited to, machinery or equipment required by Federal Communications Commission rules and regulations;
(9) Sales of tangible personal property purchased or used by a licensed cable television operator in cablecasting. This exemption shall not apply unless such machinery and equipment is used directly in the manufacturing process, is necessary for the proper production of a cablecast signal, or is such that the failure of the machinery or equipment to operate would cause cablecasting to cease. This exemption begins with the equipment used in producing local programming or the electronic equipment behind the satellite receiving dish, microwave tower, or antenna, and ends with the transmission of the signal from the cablecast head-end system. For purposes of this division (E)(9), PROPER PRODUCTION shall include, but not be limited to, machinery or equipment required by Federal Communications Commission rules and regulations;
(10) Sales of packaging materials for use in packing, shipping, or delivering tangible personal property for sale when sold to a producer of agricultural products. This exemption shall not apply to the sale of any packaging material which is ordinarily known as a returnable container;
(11) Sales of any pattern used in the process of manufacturing iron, steel, or other metal castings. The exemption provided by this division (E)(11) shall be applicable irrespective of ownership of the pattern provided that such pattern is used in the commercial production of metal castings;
(12) Deposits or other charges made and which are subsequently refunded for returnable cartons, crates, pallets, and containers used to transport cement and cement products;
(13) Beginning January 1, 1998, machinery, electricity, fuels, explosives, and materials, excluding chemicals, used in the mining of coal in the state; and
(14) Deposits, rent, or other charges made for returnable cartons, crates, pallets, and containers used to transport mushrooms or mushroom products from a farm for resale to the consumer or processor.
(a) For the refund of certain state and local sales taxes for manufacturers.
1. In order to administer the exemption for sales to a qualified manufacturer or distributor, there shall be made a sales tax refund for state and local sales taxes paid by qualified manufacturers or distributors for tangible personal property purchased to be consumed or incorporated in the construction of a new manufacturing or distribution facility, or to expand an existing manufacturing or distribution facility in the state from the account created by this division (E)(14). Provided, no claim for a refund shall be filed before July 1, 2006.
2. The State Tax Commission shall transfer each month from sales tax collected the amount which the Commission estimates to be necessary to make the sales tax refund provided by this division (E)(14) to an account designated as the Commission determines.
3. Any refund shall be paid from the account prescribed by this division (E)(14) at the time the claim for refund is approved by the Tax Commission. The amount of the refund shall not exceed the total state and local sales taxes paid together with accrued interest upon such total. The amount of interest paid to a qualified manufacturer or distributor upon the principal amount of any refund made to such manufacturer or distributor for purposes of administering the exemption shall be determined according to the amount earned as invested by the State Treasurer’s office. The interest rate shall accrue upon the amount transferred to the account.
4. For purposes of this division (E)(14), state and local sales taxes paid by a contractor or subcontractor for tangible personal property purchased by that contractor or subcontractor to be consumed or incorporated in the construction of a new or expanded manufacturing facility pursuant to a contract with a qualified manufacturer or distributor shall, upon proper showing, be refunded to the qualified manufacturer or distributor.
5. The qualified manufacturer or distributor shall file with the Tax Commission the following documentation for any refund claimed:
a. Invoices indicating the amount of state and local sales tax billed;
b. Affidavit of each vendor that state and local sales tax billed has not been audited, rebated, or refunded to the qualified manufacturer but rather the sales tax charged has been collected by the vendor and remitted to the Tax Commission; and
c. All additional documentation required to be submitted pursuant to rules promulgated by the Tax Commission.
6. In the event that state and local sales tax was paid by a contractor or subcontractor, the qualified manufacturer or distributor shall file with the Tax Commission all documentation required in division (E)(14)(a)5. above, but in lieu of the affidavit of each vendor the qualified manufacturer or distributor shall file, for any refund claimed, an affidavit from the contractor or subcontractor stating that the sales tax refund of the qualified manufacturer or distributor is based on state and local sales tax paid by the contractor or subcontractor on tangible personal property purchased to be consumed or incorporated in the construction of a new or expanded business activity, and that the amount of state and local sales tax claimed was paid to the vendor and no credit, refund, or rebate has been claimed by the contractor or subcontractor.
7. Only sales of tangible personal property made after June 1, 1988, shall be eligible for the refund established by this division (E)(14).
8. The qualified manufacturer or distributor shall file, within 36 months of the date of the first purchase which is exempt from taxation, with the Tax Commission a certification issued by the Employment Security Commission in order to qualify for the refund authorized by this division (E)(14).
9. Notwithstanding the provisions of any state tax law, the amount refunded under this division (E)(14) shall be assessed if the number of full-time-equivalent employees drops below the number, at any time within 36 months of the date certification is issued by the State Employment Security Commission.
(b) For the manufacturer exemption permit, the following shall apply.
1. In order to qualify for the exemption, at the time of sale, the person to whom the sale is made, provided the purchaser is a resident of the state, shall be required to furnish the vendor proof of eligibility for the exemption as required by this division (E)(14). All vendors shall honor the proof of eligibility for sales tax exemption as authorized under this section, and sales to a person providing such proof shall be exempt from the tax levied.
2. Each resident manufacturer wishing to claim the exemption shall be required to secure from the State Tax Commission a manufacturer exemption permit, the size and design of which shall be prescribed by the Tax Commission. This permit shall constitute proof of eligibility for the exemption. Each such manufacturer shall file with the Tax Commission an application for an exemption permit, setting forth such information as the Tax Commission may require. The application shall be signed by the owner of the business or representative of the business entity and as a natural person, and, in the case of a corporation, as a legally constituted officer thereof.
3. Each manufacturer exemption permit issued shall be valid for a period of three years from the date of issuance. If a manufacturer applying for a manufacturer exemption permit is already the holder of a manufacturer’s sales tax permit issued at the time of initial application, the manufacturer exemption permit shall be issued with an expiration date which corresponds with the expiration date of the manufacturer’s sales tax permit. Thereafter, the Tax Commission shall issue the exemption permits at the same time of issuance or renewal of the manufacturer’s sales tax permit issued.
4. The Tax Commission shall honor all manufacturer’s limited exemption certificates issued prior to the effective date of this act. However, holders of such certificates shall apply for a manufacturer exemption permit pursuant to the provisions of this section at the same time they apply for issuance or renewal of a manufacturer’s sales tax permit.
(Prior Code, § 7-211)
(F) There are hereby specifically exempted from the tax levied in this division (F):
(1) The transfer of tangible personal property, as follows:
(a) From one corporation to another corporation pursuant to a reorganization. As used in this division (F)(1), the term REORGANIZATION means a statutory merger or consolidation, or the acquisition by a corporation of substantially all of the properties of another corporation when the consideration is solely all or a part of the voting stock of the acquiring corporation, or of its parent or subsidiary corporation;
(b) In connection with the winding up, dissolution, or liquidation of a corporation only when there is a distribution in kind to the shareholders of the property of such corporation;
(c) To a corporation for the purpose of organization of such corporation where the former owners of the property transferred are immediately after the transfer in control of the corporation, and the stock or securities received by each is substantially in proportion to his interest in the property prior to the transfer;
(d) To a partnership in the organization of such partnership if the former owners of the property transferred are immediately after the transfer, members of such partnership and the interest in the partnership, received by each, is substantially in proportion to his or her interest in the property prior to the transfer;
(e) From a partnership to the members thereof when made in kind in the dissolution of such partnership;
(f) To a limited liability company in the organization of the limited liability company if the former owners of the property transferred are, immediately after the transfer, members of the limited liability company and the interest in the limited liability company received by each is substantially in proportion to the interest in the property prior to the transfer; and
(g) From a limited liability company to the members thereof when made in kind in the dissolution of the limited liability company.
(2) Sale of an interest in tangible personal property to a partner or other person who, after such sale, owns a joint interest in such tangible personal property where the State Sales or Use Tax has previously been paid on such tangible personal property.
(Prior Code, § 7-212) Penalty, see § 37.99
Statutory reference:
Definitions, see 68 O.S. § 6001
Exemptions, see 68 O.S. § 6003
Levy of tax; interest, see 68 O.S. § 6002
Report on transfer of legal ownership of aircraft; cancellation or suspension of license, see 68 O.S. § 6004