Okla. Stat. tit. 68, § 68-1352

Definitions.

As used in the Oklahoma Sales Tax Code:

1. “Alcoholic beverages” means beverages that are suitable for

human consumption and contain one-half of one percent (0.5%) or more

of alcohol by volume;

2. “Bottled water” means water that is placed in a safety

sealed container or package for human consumption. Bottled water is

calorie-free and does not contain sweeteners or other additives

except that it may contain:

a. antimicrobial agents,

b. fluoride,

c. carbonation,

d. vitamins, minerals, and electrolytes,

e. oxygen,

f. preservatives, and

g. only those flavors, extracts, or essences derived from

a spice or fruit;

3. “Bundled transaction” means the retail sale of two or more

products, except real property and services to real property, where

the products are otherwise distinct and identifiable, and the

products are sold for one nonitemized price. A bundled transaction

does not include the sale of any products in which the sales price

varies, or is negotiable, based on the selection by the purchaser of

the products included in the transaction. As used in this

paragraph:

a. “distinct and identifiable products” does not include:

(1) packaging such as containers, boxes, sacks, bags,

and bottles, or other materials such as wrapping,

labels, tags, and instruction guides, that

accompany the retail sale of the products and are

incidental or immaterial to the retail sale

thereof, including but not limited to, grocery

sacks, shoeboxes, dry cleaning garment bags and

express delivery envelopes and boxes,

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(2) a product provided free of charge with the

required purchase of another product. A product

is provided free of charge if the sales price of

the product purchased does not vary depending on

the inclusion of the product provided free of

charge, or

(3) items included in the definition of gross

receipts or sales price, pursuant to this

section,

b. “one nonitemized price” does not include a price that

is separately identified by product on binding sales

or other supporting sales-related documentation made

available to the customer in paper or electronic form

including, but not limited to, an invoice, bill of

sale, receipt, contract, service agreement, lease

agreement, periodic notice of rates and services, rate

card, or price list.

A transaction that otherwise meets the definition of a

bundled transaction shall not be considered a bundled

transaction if it is:

(1) the retail sale of tangible personal property and

a service where the tangible personal property is

essential to the use of the service, and is

provided exclusively in connection with the

service, and the true object of the transaction

is the service,

(2) the retail sale of services where one service is

provided that is essential to the use or receipt

of a second service and the first service is

provided exclusively in connection with the

second service and the true object of the

transaction is the second service,

(3) a transaction that includes taxable products and

nontaxable products and the purchase price or

sales price of the taxable products is de

minimis. For purposes of this subdivision, “de

minimis” means the seller’s purchase price or

sales price of taxable products is ten percent

(10%) or less of the total purchase price or

sales price of the bundled products. Sellers

shall use either the purchase price or the sales

price of the products to determine if the taxable

products are de minimis. Sellers may not use a

combination of the purchase price and sales price

of the products to determine if the taxable

products are de minimis. Sellers shall use the

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full term of a service contract to determine if

the taxable products are de minimis, or

(4) the retail sale of exempt tangible personal

property and taxable tangible personal property

where:
combination of the purchase price and sales price

of the products to determine if the taxable

products are de minimis. Sellers shall use the

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full term of a service contract to determine if

the taxable products are de minimis, or

(4) the retail sale of exempt tangible personal

property and taxable tangible personal property

where:

(a) the transaction includes food and food

ingredients, drugs, durable medical

equipment, mobility enhancing equipment,

over-the-counter drugs, prosthetic devices

or medical supplies, and

(b) the seller’s purchase price or sales price

of the taxable tangible personal property is

fifty percent (50%) or less of the total

purchase price or sales price of the bundled

tangible personal property. Sellers may not

use a combination of the purchase price and

sales price of the tangible personal

property when making the fifty percent (50%)

determination for a transaction;

4. “Business” means any activity engaged in or caused to be

engaged in by any person with the object of gain, benefit, or

advantage, either direct or indirect;

5. “Candy” means a preparation of sugar, honey, or other

natural or artificial sweeteners in combination with chocolate,

fruits, nuts, or other ingredients or flavorings in the form of

bars, drops, or pieces. Candy shall not include any preparation

containing flour or requiring refrigeration;

6. “Commission” or “Tax Commission” means the Oklahoma Tax

Commission;

7. “Computer” means an electronic device that accepts

information in digital or similar form and manipulates it for a

result based on a sequence of instructions;

8. “Computer software” means a set of coded instructions

designed to cause a computer or automatic data processing equipment

to perform a task;

9. “Consumer” or “user” means a person to whom a taxable sale

of tangible personal property is made or to whom a taxable service

is furnished. Consumer or user includes all contractors to whom a

taxable sale of materials, supplies, equipment, or other tangible

personal property is made or to whom a taxable service is furnished

to be used or consumed in the performance of any contract;

10. “Contractor” means any person who performs any improvement

upon real property and who, as a necessary and incidental part of

performing such improvement, incorporates tangible personal property

belonging to or purchased by the person into the real property being

improved;

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11. “Dietary supplements” means any product, other than

tobacco, intended to supplement the diet that:

a. contains one or more of the following dietary

ingredients:

(1) a vitamin,

(2) a mineral,

(3) an herb or other botanical,

(4) an amino acid,

(5) a dietary substance to supplement the diet by

increasing the total dietary intake, or
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11. “Dietary supplements” means any product, other than

tobacco, intended to supplement the diet that:

a. contains one or more of the following dietary

ingredients:

(1) a vitamin,

(2) a mineral,

(3) an herb or other botanical,

(4) an amino acid,

(5) a dietary substance to supplement the diet by

increasing the total dietary intake, or

(6) a concentrate, metabolite, constituent, extract,

or combination of any ingredient described in

divisions (1) through (5) of this subparagraph,

b. is intended for ingestion in tablet, capsule, powder,

softgel, gelcap, or liquid form, or, if not intended

for ingestion in such form, is not represented as

conventional food and is not represented for use as a

sole item of a meal or of the diet, and

c. is required to be labeled as a dietary supplement,

identifiable by the label and as required pursuant to

Section 101.36 of Title 21 of the Code of Federal

Regulations;

12. “Drug” means a compound, substance or preparation, and any

component of a compound, substance or preparation:

a. recognized in the official United States Pharmacopeia,

official Homeopathic Pharmacopoeia of the United

States, or official National Formulary, and supplement

to any of them,

b. intended for use in the diagnosis, cure, mitigation,

treatment, or prevention of disease, or

c. intended to affect the structure or any function of

the body;

13. “Electronic” means relating to technology having

electrical, digital, magnetic, wireless, optical, electromagnetic,

or similar capabilities;

14. “Established place of business” means the location at which

any person regularly engages in, conducts, or operates a business in

a continuous manner for any length of time, that is open to the

public during the hours customary to such business, in which a stock

of merchandise for resale is maintained, and which is not exempted

by law from attachment, execution, or other species of forced sale

barring any satisfaction of any delinquent tax liability accrued

under the Oklahoma Sales Tax Code;

15. “Fair authority” means:

a. any county, municipality, school district, public

trust or any other political subdivision of this

state, or

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b. any not-for-profit corporation acting pursuant to an

agency, operating or management agreement which has

been approved or authorized by the governing body of

any of the entities specified in subparagraph a of

this paragraph which conduct, operate or produce a

fair commonly understood to be a county, district or

state fair;

16. “Food and food ingredients” means substances, whether in

liquid, concentrated, solid, frozen, dried, or dehydrated form, that

are sold for ingestion or chewing by humans and are consumed for

their taste or nutritional value. Food and food ingredients shall

include bottled water, candy, and soft drinks. Food and food

ingredients shall not include:

a. alcoholic beverages,

b. dietary supplements,

c. marijuana, usable marijuana, or marijuana-infused

products,

d. prepared food, or

e. tobacco;

17. “Food sold with eating utensils provided by the seller”

means food sold by a seller who meets the following requirements:

a. for a seller with a prepared food sales percentage of

greater than seventy-five percent (75%), the seller

makes eating utensils available to purchasers or, if a

food item is bottled water, candy, or soft drinks, the

seller gives or hands the eating utensils to

purchasers or makes plates, bowls, glasses, or cups

that are necessary for the purchaser to receive the

food available to purchasers. If a food item has four

or more servings packaged as one food item sold for a

single price, the seller must give or hand eating

utensils to the purchaser. Serving sizes must be

determined based on a label on an item sold, or if no

label is available, then a seller shall determine the
s, bowls, glasses, or cups

that are necessary for the purchaser to receive the

food available to purchasers. If a food item has four

or more servings packaged as one food item sold for a

single price, the seller must give or hand eating

utensils to the purchaser. Serving sizes must be

determined based on a label on an item sold, or if no

label is available, then a seller shall determine the

reasonable number of servings in an item, or

b. for a seller with a prepared food sales percentage of

seventy-five percent (75%) or less, the seller’s

business practice is to give or hand eating utensils

to purchasers. Eating utensils necessary for the

purchaser to receive the food, such as bowls and cups,

need only be made available to purchasers.

Provided, food sold with eating utensils provided by the seller

does not include food items that have a utensil placed in a package

with the food items by a person other than the seller, and that

other person’s North American Industry Classification System (NAICS)

classification code is that of a manufacturer, subsector 311. If

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the packager has any other NAICS classification code, the seller is

considered to have provided the eating utensil;

18. a. “Gross receipts”, “gross proceeds” or “sales price”

means the total amount of consideration, including

cash, credit, property and services, for which

personal property or services are sold, leased or

rented, valued in money, whether received in money or

otherwise, without any deduction for the following:

(1) the seller’s cost of the property sold,

(2) the cost of materials used, labor or service

cost,

(3) interest, losses, all costs of transportation to

the seller, all taxes imposed on the seller, and

any other expense of the seller,

(4) charges by the seller for any services necessary

to complete the sale, other than delivery and

installation charges,

(5) delivery charges and installation charges, unless

separately stated on the invoice, billing or

similar document given to the purchaser, and

(6) credit for any trade-in.

b. Such term shall not include:

(1) discounts, including cash, term, or coupons that

are not reimbursed by a third party that are

allowed by a seller and taken by a purchaser on a

sale,

(2) interest, financing, and carrying charges from

credit extended on the sale of personal property

or services, if the amount is separately stated

on the invoice, bill of sale or similar document

given to the purchaser, and

(3) any taxes legally imposed directly on the

consumer that are separately stated on the

invoice, bill of sale or similar document given

to the purchaser.

c. Such term shall include consideration received by the

seller from third parties if:

(1) the seller actually receives consideration from a

party other than the purchaser and the

consideration is directly related to a price

reduction or discount on the sale,

(2) the seller has an obligation to pass the price

reduction or discount through to the purchaser,

(3) the amount of the consideration attributable to

the sale is fixed and determinable by the seller

at the time of the sale of the item to the

purchaser, and

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(4) one of the following criteria is met:

(a) the purchaser presents a coupon, certificate

or other documentation to the seller to

claim a price reduction or discount where

the coupon, certificate or documentation is

authorized, distributed or granted by a

third party with the understanding that the

third party will reimburse any seller to

whom the coupon, certificate or

documentation is presented,

(b) the purchaser identifies himself or herself

to the seller as a member of a group or

organization entitled to a price reduction

or discount; provided, a “preferred

customer” card that is available to any

patron does not constitute membership in

such a group, or
e understanding that the

third party will reimburse any seller to

whom the coupon, certificate or

documentation is presented,

(b) the purchaser identifies himself or herself

to the seller as a member of a group or

organization entitled to a price reduction

or discount; provided, a “preferred

customer” card that is available to any

patron does not constitute membership in

such a group, or

(c) the price reduction or discount is

identified as a third-party price reduction

or discount on the invoice received by the

purchaser or on a coupon, certificate or

other documentation presented by the

purchaser;

19. a. “Maintaining a place of business in this state” means

and shall be presumed to include:

(1) (a) utilizing or maintaining in this state,

directly or by subsidiary, an office,

distribution house, sales house, warehouse,

or other physical place of business, whether

owned or operated by the vendor or any other

person, other than a common carrier acting

in its capacity as such, or

(b) having agents operating in this state,

whether the place of business or agent is

within this state temporarily or permanently

or whether the person or agent is authorized

to do business within this state, and

(2) the presence of any person, other than a common

carrier acting in its capacity as such, that has

substantial nexus in this state and that:

(a) sells a similar line of products as the

vendor and does so under the same or a

similar business name,

(b) uses trademarks, service marks or trade

names in this state that are the same or

substantially similar to those used by the

vendor,

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(c) delivers, installs, assembles or performs

maintenance services for the vendor,

(d) facilitates the vendor’s delivery of

property to customers in the state by

allowing the vendor’s customers to pick up

property sold by the vendor at an office,

distribution facility, warehouse, storage

place or similar place of business

maintained by the person in this state, or

(e) conducts any other activities in this state

that are significantly associated with the

vendor’s ability to establish and maintain a

market in this state for the vendor’s sale.

b. The presumptions in divisions (1) and (2) of

subparagraph a of this paragraph may be rebutted by

demonstrating that the person’s activities in this

state are not significantly associated with the

vendor’s ability to establish and maintain a market in

this state for the vendor’s sales.

c. Any ruling, agreement or contract, whether written or

oral, express or implied, between a person and

executive branch of this state, or any other state

agency or department, stating, agreeing or ruling that

the person is not maintaining a place of business in

this state or is not required to collect sales and use

tax in this state despite the presence of a warehouse,

distribution center or fulfillment center in this

state that is owned or operated by the vendor or an

affiliated person of the vendor shall be null and void

unless it is specifically approved by a majority vote

of each house of the Legislature;

20. “Manufacturing” means and includes the activity of

converting or conditioning tangible personal property by changing

the form, composition, or quality of character of some existing

material or materials, including natural resources, by procedures

commonly regarded by the average person as manufacturing,

compounding, processing or assembling, into a material or materials

with a different form or use. Manufacturing does not include

extractive industrial activities such as mining, quarrying, logging,

and drilling for oil, gas and water, nor oil and gas field

processes, such as natural pressure reduction, mechanical

separation, heating, cooling, dehydration and compression;

21. “Manufacturing operation” means the designing,

manufacturing, compounding, processing, assembling, warehousing, or
Manufacturing does not include

extractive industrial activities such as mining, quarrying, logging,

and drilling for oil, gas and water, nor oil and gas field

processes, such as natural pressure reduction, mechanical

separation, heating, cooling, dehydration and compression;

21. “Manufacturing operation” means the designing,

manufacturing, compounding, processing, assembling, warehousing, or

preparing of articles for sale as tangible personal property. A

manufacturing operation begins at the point where the materials

enter the manufacturing site and ends at the point where a finished

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product leaves the manufacturing site. Manufacturing operation does

not include administration, sales, distribution, transportation,

site construction, or site maintenance. Extractive activities and

field processes shall not be deemed to be a part of a manufacturing

operation even when performed by a person otherwise engaged in

manufacturing;

22. “Manufacturing site” means a location where a manufacturing

operation is conducted, including a location consisting of one or

more buildings or structures in an area owned, leased, or controlled

by a manufacturer;

23. “Over-the-counter drug” means a drug that contains a label

that identifies the product as a drug as required by 21 C.F.R.,

Section 201.66. The over-the-counter-drug label includes:

a. a “Drug Facts” panel, or

b. a statement of the “active ingredient(s)” with a list

of those ingredients contained in the compound,

substance or preparation;

24. “Person” means any individual, company, partnership, joint

venture, joint agreement, association, mutual or otherwise, limited

liability company, corporation, estate, trust, business trust,

receiver or trustee appointed by any state or federal court or

otherwise, syndicate, this state, any county, city, municipality,

school district, any other political subdivision of the state, or

any group or combination acting as a unit, in the plural or singular

number;

25. “Prepared food” means:

a. food sold in a heated state or that is heated by the

seller,

b. two or more food ingredients mixed or combined by the

seller for sale as a single item, or

c. food sold with eating utensils provided by the seller,

including plates, knives, forks, spoons, glasses,

cups, napkins, or straws, but does not include a

container or packaging used to transport the food.

Prepared food shall not include food sold by a seller whose primary

North American Industry Classification System (NAICS) classification

is manufacturing in Sector 311, except subsector 3118, food sold in

an unheated state by weight or volume as a single item, and food

sold that ordinarily requires additional cooking, not including just

reheating, by the consumer prior to consumption;

26. “Prescription” means an order, formula or recipe issued in

any form of oral, written, electronic, or other means of

transmission by a duly licensed “practitioner” as defined in Section

1357.6 of this title;

27. “Prewritten computer software” means computer software,

including prewritten upgrades, which is not designed and developed

by the author or other creator to the specifications of a specific

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purchaser. The combining of two or more prewritten computer

software programs or prewritten portions thereof does not cause the

combination to be other than prewritten computer software.

Prewritten software includes software designed and developed by the

author or other creator to the specifications of a specific

purchaser when it is sold to a person other than the purchaser.

Where a person modifies or enhances computer software of which the

person is not the author or creator, the person shall be deemed to

be the author or creator only of such person’s modifications or

enhancements. Prewritten software or a prewritten portion thereof
by the

author or other creator to the specifications of a specific

purchaser when it is sold to a person other than the purchaser.

Where a person modifies or enhances computer software of which the

person is not the author or creator, the person shall be deemed to

be the author or creator only of such person’s modifications or

enhancements. Prewritten software or a prewritten portion thereof

that is modified or enhanced to any degree, where such modification

or enhancement is designed and developed to the specifications of a

specific purchaser, remains prewritten software; provided, however,

that where there is a reasonable, separately stated charge or an

invoice or other statement of the price given to the purchaser for

such modification or enhancement, such modification or enhancement

shall not constitute prewritten computer software;

28. “Repairman” means any person who performs any repair

service upon tangible personal property of the consumer, whether or

not the repairman, as a necessary and incidental part of performing

the service, incorporates tangible personal property belonging to or

purchased by the repairman into the tangible personal property being

repaired;

29. “Sale” means the transfer of either title or possession of

tangible personal property for a valuable consideration regardless

of the manner, method, instrumentality, or device by which the

transfer is accomplished in this state, or other transactions as

provided by this paragraph, including but not limited to:

a. the exchange, barter, lease, or rental of tangible

personal property resulting in the transfer of the

title to or possession of the property,

b. the disposition for consumption or use in any business

or by any person of all goods, wares, merchandise, or

property which has been purchased for resale,

manufacturing, or further processing,

c. the sale, gift, exchange, or other disposition of

admission, dues, or fees to clubs, places of

amusement, or recreational or athletic events or for

the privilege of having access to or the use of

amusement, recreational, athletic or entertainment

facilities,

d. the furnishing or rendering of services taxable under

the Oklahoma Sales Tax Code, and

e. any use of motor fuel or diesel fuel by a supplier, as

defined in Section 500.3 of this title, upon which

sales tax has not previously been paid, for purposes

other than to propel motor vehicles over the public

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highways of this state. Motor fuel or diesel fuel

purchased outside the state and used for purposes

other than to propel motor vehicles over the public

highways of this state shall not constitute a sale

within the meaning of this paragraph;

30. “Sale for resale” means:

a. a sale of tangible personal property to any purchaser

who is purchasing tangible personal property for the

purpose of reselling it within the geographical limits

of the United States of America or its territories or

possessions, in the normal course of business either

in the form or condition in which it is purchased or

as an attachment to or integral part of other tangible

personal property,

b. a sale of tangible personal property to a purchaser

for the sole purpose of the renting or leasing, within

the geographical limits of the United States of

America or its territories or possessions, of the

tangible personal property to another person by the

purchaser, but not if incidental to the renting or

leasing of real estate,

c. a sale of tangible goods and products within this

state if, simultaneously with the sale, the vendor

issues an export bill of lading, or other

documentation that the point of delivery of such goods

for use and consumption is in a foreign country and

not within the territorial confines of the United

States. If the vendor is not in the business of

shipping the tangible goods and products that are
le of tangible goods and products within this

state if, simultaneously with the sale, the vendor

issues an export bill of lading, or other

documentation that the point of delivery of such goods

for use and consumption is in a foreign country and

not within the territorial confines of the United

States. If the vendor is not in the business of

shipping the tangible goods and products that are

purchased from the vendor, the buyer or purchaser of

the tangible goods and products is responsible for

providing an export bill of lading or other

documentation to the vendor from whom the tangible

goods and products were purchased showing that the

point of delivery of such goods for use and

consumption is a foreign country and not within the

territorial confines of the United States, or

d. a sale of any carrier access services, right of access

services, telecommunications services to be resold, or

telecommunications used in the subsequent provision

of, use as a component part of, or integrated into,

end-to-end telecommunications service;

31. “Soft drinks” means any nonalcoholic beverages that contain

natural or artificial sweeteners. Soft drinks shall not include

beverages that contain:

a. milk or milk products,

b. soy, rice, oat, or similar milk substitutes, or

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c. greater than fifty percent (50%) of vegetable or fruit

juice by volume;

32. “Tangible personal property” means personal property that

can be seen, weighed, measured, felt, or touched or that is in any

other manner perceptible to the senses. Tangible personal property

includes electricity, water, gas, steam and prewritten computer

software. This definition shall be applicable only for purposes of

the Oklahoma Sales Tax Code;

33. “Taxpayer” means any person liable to pay a tax imposed by

the Oklahoma Sales Tax Code;

34. “Tax period” or “taxable period” means the calendar period

or the taxpayer’s fiscal period for which a taxpayer has obtained a

permit from the Tax Commission to use a fiscal period in lieu of a

calendar period;

35. “Tax remitter” means any person required to collect,

report, or remit the tax imposed by the Oklahoma Sales Tax Code. A

tax remitter who fails, for any reason, to collect, report, or remit

the tax shall be considered a taxpayer for purposes of assessment,

collection, and enforcement of the tax imposed by the Oklahoma Sales

Tax Code; and

36. “Vendor” means:

a. any person making sales of tangible personal property

or services in this state, the gross receipts or gross

proceeds from which are taxed by the Oklahoma Sales

Tax Code,

b. any person maintaining a place of business in this

state and making sales of tangible personal property

or services, whether at the place of business or

elsewhere, to persons within this state, the gross

receipts or gross proceeds from which are taxed by the

Oklahoma Sales Tax Code,

c. any person who solicits business by employees,

independent contractors, agents, or other

representatives in this state, and thereby makes sales

to persons within this state of tangible personal

property or services, the gross receipts or gross

proceeds from which are taxed by the Oklahoma Sales

Tax Code, or

d. any person, pursuant to an agreement with the person

with an ownership interest in or title to tangible

personal property, who has been entrusted with the

possession of any such property and has the power to

designate who is to obtain title, to physically

transfer possession of, or otherwise make sales of the

property.