Oklahoma Statutes
Title 68. Revenue and Taxation
§68-1357v3. Exemptions – General.

Exemptions – General.

There are hereby specifically exempted from the tax levied by the Oklahoma Sales Tax Code:
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 One Dollar ($1.00), or local transportation of persons within the corporate limits of a municipality except by taxicabs;
3. 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 this state are made to persons to whom sales tax permits have been issued as provided in the Oklahoma Sales Tax Code. 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 salespersons who do not have an established place of business and a sales tax permit. The exemption provided by this paragraph shall apply to sales of motor fuel or diesel fuel to a Group Five vendor, but the use of such motor fuel or diesel fuel by the Group Five vendor shall not be exempt from the tax levied by the Oklahoma Sales Tax Code. The purchase of motor fuel or diesel fuel is exempt from sales tax when the motor fuel is for shipment outside this state and consumed by a common carrier by rail in the conduct of its business. The sales tax shall apply to the purchase of motor fuel or diesel fuel in Oklahoma by a common carrier by rail when such motor fuel is purchased for fueling, within this state, of any locomotive or other motorized flanged wheel equipment;
4. Sales of advertising space in newspapers and periodicals;
5. Sales of programs relating to sporting and entertainment events, and sales of advertising on billboards (including signage, posters, panels, marquees, or on other similar surfaces, whether indoors or outdoors) or in programs relating to sporting and entertainment events, and sales of any advertising, to be displayed at or in connection with a sporting event, via the Internet, electronic display devices, or through public address or broadcast systems. The exemption authorized by this paragraph shall be effective for all sales made on or after January 1, 2001;
6. Sales of any advertising, other than the advertising described by paragraph 5 of this section, via the Internet, electronic display devices, or through the electronic media, including radio, public address or broadcast systems, television (whether through closed circuit broadcasting systems or otherwise), and cable and satellite television, and the servicing of any advertising devices;
7. Eggs, feed, supplies, machinery and equipment purchased by persons regularly engaged in the business of raising worms, fish, any insect or any other form of terrestrial or aquatic animal life and used for the purpose of raising 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 the purchaser 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 Oklahoma 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;
8. Sale of natural or artificial gas and electricity, and associated delivery or transmission services, when sold exclusively for residential use. Provided, this exemption shall not apply to any sales tax levied by a city or town, or a county, or any other jurisdiction in this state;
9. In addition to the exemptions authorized by Section 1357.6 of this title, sales of drugs sold pursuant to a prescription written for the treatment of human beings by a person licensed to prescribe the drugs, and sales of insulin and medical oxygen. Provided, this exemption shall not apply to over-the-counter drugs;
10. Transfers of title or possession of empty, partially filled, or filled returnable oil and chemical 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;
11. Sales of one-way utensils, paper napkins, paper cups, disposable hot containers and other one-way carry out materials to a vendor of meals or beverages;
12. 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 Sections 2011 through 2029 of Title 7 of the United States Code, 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;
13. Sales of food or food products, or any equipment or supplies used in the preparation of the food or food products to or by an organization which:
14.a.Sales of tangible personal property or services to or by organizations which are exempt from taxation pursuant to the provisions of Section 501(c)(3) of the Internal Revenue Code, 26 U.S.C., Section 501(c)(3), and:
15. Sales of tangible personal property or services to children's homes which are located on church-owned property and are operated by organizations exempt from taxation pursuant to the provisions of the Internal Revenue Code, 26 U.S.C., Section 501(c)(3);
16. Sales of computers, data processing equipment, related peripherals and telephone, telegraph or telecommunications service and equipment for use in a qualified aircraft maintenance or manufacturing facility. For purposes of this paragraph, "qualified aircraft maintenance or manufacturing facility" means a new or expanding facility primarily engaged in aircraft repair, building or rebuilding whether or not on a factory basis, whose total cost of construction exceeds the sum of Five Million Dollars ($5,000,000.00) and which employs at least two hundred fifty (250) new full-time-equivalent employees, as certified by the Oklahoma Employment Security Commission, upon completion of the facility. In order to qualify for the exemption provided for by this paragraph, the cost of the items purchased by the qualified aircraft maintenance or manufacturing facility shall equal or exceed the sum of Two Million Dollars ($2,000,000.00);
17. Sales of tangible personal property consumed or incorporated in the construction or expansion of a qualified aircraft maintenance or manufacturing facility as defined in paragraph 16 of this section. For purposes of this paragraph, sales made to a contractor or subcontractor that has previously entered into a contractual relationship with a qualified aircraft maintenance or manufacturing facility for construction or expansion of such a facility shall be considered sales made to a qualified aircraft maintenance or manufacturing facility;
18. Sales of the following telecommunications services:
19. Sales of railroad track spikes manufactured and sold for use in this state in the construction or repair of railroad tracks, switches, sidings and turnouts;
20. Sales of aircraft and aircraft parts provided such sales occur at a qualified aircraft maintenance facility. As used in this paragraph, "qualified aircraft maintenance facility" means a facility operated by an air common carrier, including one or more component overhaul support buildings or structures in an area owned, leased or controlled by the air common carrier, at which there were employed at least two thousand (2,000) full-time-equivalent employees in the preceding year as certified by the Oklahoma Employment Security Commission and which is primarily related to the fabrication, repair, alteration, modification, refurbishing, maintenance, building or rebuilding of commercial aircraft or aircraft parts used in air common carriage. For purposes of this paragraph, "air common carrier" shall also include members of an affiliated group as defined by Section 1504 of the Internal Revenue Code, 26 U.S.C., Section 1504. Beginning July 1, 2012, sales of machinery, tools, supplies, equipment and related tangible personal property and services used or consumed in the repair, remodeling or maintenance of aircraft, aircraft engines, or aircraft component parts which occur at a qualified aircraft maintenance facility;
21. Sales of machinery and equipment purchased and used by persons and establishments primarily engaged in computer services and data processing:
Eligibility for the exemption set out in this paragraph shall be established, subject to review by the Tax Commission, by annually filing an affidavit with the Tax Commission stating that the facility so qualifies and such information as required by the Tax Commission. For purposes of determining whether annual gross revenues are derived from sales to out-of-state buyers or consumers, all sales to the federal government shall be considered to be to an out-of-state buyer or consumer;
22. Sales of prosthetic devices to an individual for use by such individual. For purposes of this paragraph, "prosthetic device" shall have the same meaning as provided in Section 1357.6 of this title, but shall not include corrective eye glasses, contact lenses or hearing aids;
23. Sales of tangible personal property or services to a motion picture or television production company to be used or consumed in connection with an eligible production. For purposes of this paragraph, "eligible production" means a documentary, special, music video, or a television commercial or television program that will serve as a pilot for or be a segment of an ongoing dramatic or situation comedy series filmed or taped for network or national or regional syndication or a feature-length motion picture intended for theatrical release or for network or national or regional syndication or broadcast. The provisions of this paragraph shall apply to sales occurring on or after July 1, 1996. In order to qualify for the exemption, the motion picture or television production company shall file any documentation and information required to be submitted pursuant to rules promulgated by the Tax Commission;
24. Sales of diesel fuel sold for consumption by commercial vessels, barges and other commercial watercraft;
25. Sales of tangible personal property or services to tax-exempt independent nonprofit biomedical research foundations that provide educational programs for Oklahoma science students and teachers and to tax-exempt independent nonprofit community blood banks headquartered in this state;
26. Effective May 6, 1992, sales of wireless telecommunications equipment to a vendor who subsequently transfers the equipment at no charge or for a discounted charge to a consumer as part of a promotional package or as an inducement to commence or continue a contract for wireless telecommunications services;
27. Effective January 1, 1991, leases of rail transportation cars to haul coal to coal-fired plants located in this state which generate electric power;
28. Beginning July 1, 2005, sales of aircraft engine repairs, modification, and replacement parts, sales of aircraft frame repairs and modification, aircraft interior modification, and paint, and sales of services employed in the repair, modification and replacement of parts of aircraft engines, aircraft frame and interior repair and modification, and paint;
29. Sales of materials and supplies to the owner or operator of a ship, motor vessel or barge that is used in interstate or international commerce if the materials and supplies:
30. Sales of tangible personal property made at estate sales at which such property is offered for sale on the premises of the former residence of the decedent by a person who is not required to be licensed pursuant to the Transient Merchant Licensing Act, or who is not otherwise required to obtain a sales tax permit for the sale of such property pursuant to the provisions of Section 1364 of this title; provided:
31. Beginning January 1, 2004, sales of electricity and associated delivery and transmission services, when sold exclusively for use by an oil and gas operator for reservoir dewatering projects and associated operations commencing on or after July 1, 2003, in which the initial water-to-oil ratio is greater than or equal to five-to-one water-to-oil, and such oil and gas development projects have been classified by the Corporation Commission as a reservoir dewatering unit;
32. Sales of prewritten computer software that is delivered electronically. For purposes of this paragraph, "delivered electronically" means delivered to the purchaser by means other than tangible storage media;
33. Sales of modular dwelling units when built at a production facility and moved in whole or in parts, to be assembled on-site, and permanently affixed to the real property and used for residential or commercial purposes. The exemption provided by this paragraph shall equal forty-five percent (45%) of the total sales price of the modular dwelling unit. For purposes of this paragraph, "modular dwelling unit" means a structure that is not subject to the motor vehicle excise tax imposed pursuant to Section 2103 of this title;
34. Sales of tangible personal property or services to persons who are residents of Oklahoma and have been honorably discharged from active service in any branch of the Armed Forces of the United States or Oklahoma National Guard and who have been certified by the United States Department of Veterans Affairs or its successor to be in receipt of disability compensation at the one-hundred-percent rate and the disability shall be permanent and have been sustained through military action or accident or resulting from disease contracted while in such active service or the surviving spouse of such person if the person is deceased and the spouse has not remarried; provided, sales for the benefit of the person to a spouse of the eligible person or to a member of the household in which the eligible person resides and who is authorized to make purchases on the person's behalf, when such eligible person is not present at the sale, shall also be exempt for purposes of this paragraph. The Oklahoma Tax Commission shall issue a separate exemption card to a spouse of an eligible person or to a member of the household in which the eligible person resides who is authorized to make purchases on the person's behalf, if requested by the eligible person. Sales qualifying for the exemption authorized by this paragraph shall not exceed Twenty-five Thousand Dollars ($25,000.00) per year per individual while the disabled veteran is living. Sales qualifying for the exemption authorized by this paragraph shall not exceed One Thousand Dollars ($1,000.00) per year for an unremarried surviving spouse. Upon request of the Tax Commission, a person asserting or claiming the exemption authorized by this paragraph shall provide a statement, executed under oath, that the total sales amounts for which the exemption is applicable have not exceeded Twenty-five Thousand Dollars ($25,000.00) per year per living disabled veteran or One Thousand Dollars ($1,000.00) per year for an unremarried surviving spouse. If the amount of such exempt sales exceeds such amount, the sales tax in excess of the authorized amount shall be treated as a direct sales tax liability and may be recovered by the Tax Commission in the same manner provided by law for other taxes, including penalty and interest;
35. Sales of electricity to the operator, specifically designated by the Corporation Commission, of a spacing unit or lease from which oil is produced or attempted to be produced using enhanced recovery methods, including, but not limited to, increased pressure in a producing formation through the use of water or saltwater if the electrical usage is associated with and necessary for the operation of equipment required to inject or circulate fluids in a producing formation for the purpose of forcing oil or petroleum into a wellbore for eventual recovery and production from the wellhead. In order to be eligible for the sales tax exemption authorized by this paragraph, the total content of oil recovered after the use of enhanced recovery methods shall not exceed one percent (1%) by volume. The exemption authorized by this paragraph shall be applicable only to the state sales tax rate and shall not be applicable to any county or municipal sales tax rate;
36. Sales of intrastate charter and tour bus transportation. As used in this paragraph, "intrastate charter and tour bus transportation" means the transportation of persons from one location in this state to another location in this state in a motor vehicle which has been constructed in such a manner that it may lawfully carry more than eighteen persons, and which is ordinarily used or rented to carry persons for compensation. Provided, this exemption shall not apply to regularly scheduled bus transportation for the general public;
37. Sales of vitamins, minerals and dietary supplements by a licensed chiropractor to a person who is the patient of such chiropractor at the physical location where the chiropractor provides chiropractic care or services to such patient. The provisions of this paragraph shall not be applicable to any drug, medicine or substance for which a prescription by a licensed physician is required;
38. Sales of goods, wares, merchandise, tangible personal property, machinery and equipment to a web search portal located in this state which derives at least eighty percent (80%) of its annual gross revenue from the sale of a product or service to an out-of-state buyer or consumer. For purposes of this paragraph, "web search portal" means an establishment classified under NAICS code 519130 which operates websites that use a search engine to generate and maintain extensive databases of Internet addresses and content in an easily searchable format;
39. Sales of tangible personal property consumed or incorporated in the construction or expansion of a facility for a corporation organized under Section 437 et seq. of Title 18 of the Oklahoma Statutes as a rural electric cooperative. For purposes of this paragraph, sales made to a contractor or subcontractor that has previously entered into a contractual relationship with a rural electric cooperative for construction or expansion of a facility shall be considered sales made to a rural electric cooperative;
40. Sales of tangible personal property or services to a business primarily engaged in the repair of consumer electronic goods, including, but not limited to, cell phones, compact disc players, personal computers, MP3 players, digital devices for the storage and retrieval of information through hard-wired or wireless computer or Internet connections, if the devices are sold to the business by the original manufacturer of such devices and the devices are repaired, refitted or refurbished for sale by the entity qualifying for the exemption authorized by this paragraph directly to retail consumers or if the devices are sold to another business entity for sale to retail consumers;
41. On or after July 1, 2019, and prior to July 1, 2024, sales or leases of rolling stock when sold or leased by the manufacturer, regardless of whether the purchaser is a public services corporation engaged in business as a common carrier of property or passengers by railway, for use or consumption by a common carrier directly in the rendition of public service. For purposes of this paragraph, "rolling stock" means locomotives, autocars and railroad cars and "sales or leases" includes railroad car maintenance and retrofitting of railroad cars for their further use only on the railways;
42. Sales of gold, silver, platinum, palladium or other bullion items such as coins and bars and legal tender of any nation, which legal tender is sold according to its value as precious metal or as an investment. As used in the paragraph, "bullion" means any precious metal, including, but not limited to, gold, silver, platinum and palladium, that is in such a state or condition that its value depends upon its precious metal content and not its form. The exemption authorized by this paragraph shall not apply to fabricated metals that have been processed or manufactured for artistic use or as jewelry; and
43. Subject to the other requirements of this paragraph and the requirements of Section 2 of this act, sale, lease, rental, storage, use or other consumption of qualifying broadband equipment by providers of Internet service or subsidiaries if the property is directly used or consumed by the provider or subsidiary in or during the distribution of broadband Internet service.
Added by Laws 1981, c. 313, § 2, emerg. eff. June 29, 1981. Amended by Laws 1981, c. 351, § 1, operative Jan. 1, 1982; Laws 1985, c. 161, § 2, eff. July 1, 1985; Laws 1987, c. 7, § 1, operative Sept. 30, 1987; Laws 1988, c. 142, § 3, emerg. eff. April 25, 1988; Laws 1988, c. 190, § 1, eff. June 1, 1988; Laws 1989, c. 167, § 5, eff. July 1, 1989; Laws 1990, c. 280, § 2, emerg. eff. May 25, 1990; Laws 1991, 1st Ex. Sess., c. 1, § 4, emerg. eff. Jan. 18, 1991; Laws 1991, 1st Ex. Sess., c. 2, § 4, emerg. eff. Jan. 18, 1991; Laws 1991, c. 342, § 15, emerg. eff. June 15, 1991; Laws 1992, c. 383, § 2, emerg. eff. June 9, 1992; Laws 1993, c. 53, § 1, eff. July 1, 1993; Laws 1993, c. 275, § 11, eff. July 1, 1993; Laws 1994, c. 2, § 23, emerg. eff. March 2, 1994; Laws 1994, c. 278, § 15, eff. Sept. 1, 1994; Laws 1995, c. 337, § 5, emerg. eff. June 9, 1995; Laws 1996, c. 342, § 3, eff. July 1, 1996; Laws 1997, c. 2, § 16, emerg. eff. Feb. 26, 1997; Laws 1997, c. 190, § 2, eff. July 1, 1997; Laws 1997, c. 294, § 16, eff. July 1, 1997; Laws 1998, c. 5, § 22, emerg. eff. March 4, 1998; Laws 1998, c. 301, § 5, eff. Nov. 1, 1998; Laws 1999, c. 163, § 1, emerg. eff. May 17, 1999; Laws 1999, c. 390, § 9, emerg. eff. June 8, 1999; Laws 2000, c. 6, § 15, emerg. eff. March 20, 2000; Laws 2000, c. 337, § 2, eff. July 1, 2000; Laws 2001, c. 402, § 1, eff. July 1, 2001; Laws 2002, c. 22, § 26, emerg. eff. March 8, 2002; Laws 2002, c. 163, § 1, eff. July 1, 2002; Laws 2002, c. 385, § 1, eff. July 1, 2002; Laws 2003, c. 3, § 63, emerg. eff. March 19, 2003; Laws 2003, c. 413, § 9, eff. Nov. 1, 2003; Laws 2004, c. 535, § 8, eff. Nov. 1, 2004; Laws 2005, c. 381, § 9, eff. July 1, 2005; Laws 2006, c. 16, § 58, emerg. eff. March 29, 2006; Laws 2006, 2nd Ex. Sess., c. 44, § 5, eff. July 1, 2007; Laws 2007, c. 155, § 9, eff. Nov. 1, 2007; Laws 2007, c. 253, § 1, eff. July 1, 2007; Laws 2008, c. 436, § 3, eff. July 1, 2009; Laws 2009, c. 2, § 26, eff. July 1, 2009; Laws 2010, c. 419, § 5, eff. Nov. 1, 2010; Laws 2012, c. 230, § 2, emerg. eff. May 9, 2012; Laws 2013, c. 15, § 82, emerg. eff. April 8, 2013; Laws 2013, c. 364, § 1, eff. Nov. 1, 2013; Laws 2014, c. 401, § 2; Laws 2015, c. 54, § 18, emerg. eff. April 10, 2015; Laws 2019, c. 241, § 1, eff. July 1, 2019; Laws 2021, c. 512, § 1, eff. July 1, 2021.
NOTE: Laws 1991, c. 337, § 2 repealed by Laws 1992, c. 383, § 4, emerg. eff. June 9, 1992. Laws 1993, c. 246, § 2 repealed by Laws 1994, c. 2, § 34, emerg. eff. March 2, 1994. Laws 1996, c. 289, § 2 repealed by Laws 1997, c. 2, § 26, emerg. eff. Feb. 26, 1997. Laws 1997, c. 252, § 2 repealed by Laws 1998, c. 5, § 29, emerg. eff. March 4, 1998. Laws 1999, c. 243, § 1 and Laws 1999, c. 329, § 1 repealed by Laws 2000, c. 6, § 33, emerg. eff. March 20, 2000. Laws 2001, c. 358, § 15 repealed by Laws 2002, c. 22, § 34, emerg. eff. March 8, 2002. Laws 2002, c. 382, § 2 repealed by Laws 2003, c. 3, § 64, emerg. eff. March 19, 2003. Laws 2005, c. 293, § 1 repealed by Laws 2006, c. 16, § 59, emerg. eff. March 29, 2006. Laws 2005, c. 295, § 1 repealed by Laws 2006, c. 16, § 60, emerg. eff. March 29, 2006. Laws 2005, c. 383, § 1 repealed by Laws 2006, c. 16, § 61, emerg. eff. March 29, 2006. Laws 2005, c. 479, § 14 repealed by Laws 2006, c. 16, § 62, emerg. eff. March 29, 2006. Laws 2006, c. 281, § 28 repealed by Laws 2006, 2nd Ex. Sess., c. 44, § 6, eff. July 1, 2007. Laws 2006, c. 272, § 1 repealed by Laws 2006, 2nd Ex. Sess., c. 44, § 7, eff. July 1, 2007. Laws 2007, c. 143, § 1 repealed by Laws 2007, c. 253, § 2, eff. July 1, 2007. Laws 2008, c. 406, § 1 repealed by Laws 2009, c. 2, § 27, eff. July 1, 2009. Laws 2012, c. 233, § 1 repealed by Laws 2013, c. 15, § 83, emerg. eff. April 8, 2013. Laws 2014, c. 358, § 1 repealed by Laws 2015, C. 54, § 19, emerg. eff. April 10, 2015. Laws 2014, c. 429, § 2 repealed by Laws 2015, c. 54, § 20, emerg. eff. April 10, 2015.

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