Okla. Stat. tit. 68, § 68-1357v3

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;

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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
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;

Oklahoma Statutes - Title 68. Revenue and Taxation Page 550

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:

a. is 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 which provides and

delivers prepared meals for home consumption to

elderly or homebound persons as part of a program

commonly known as “Meals on Wheels” or “Mobile Meals”,

or

b. is 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 which receives federal

funding pursuant to the Older Americans Act of 1965,

as amended, for the purpose of providing nutrition

programs for the care and benefit of elderly persons;

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:

(1) are primarily involved in the collection and

distribution of food and other household products

to other organizations that facilitate the

distribution of such products to the needy and

such distributee organizations 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), or
26 U.S.C., Section 501(c)(3),

and:

(1) are primarily involved in the collection and

distribution of food and other household products

to other organizations that facilitate the

distribution of such products to the needy and

such distributee organizations 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), or

(2) facilitate the distribution of such products to

the needy.

b. Sales made in the course of business for profit or

savings, competing with other persons engaged in the

same or similar business shall not be exempt under

this paragraph;

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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:

a. Interstate and International “800 service”. “800

service” means a “telecommunications service” that

allows a caller to dial a toll-free number without

incurring a charge for the call. The service is

typically marketed under the name “800”, “855”, “866”,

“877” and “888” toll-free calling, and any subsequent

numbers designated by the Federal Communications

Commission,

b. Interstate and International “900 service”. “900

service” means an inbound toll telecommunications

service purchased by a subscriber that allows the

subscriber’s customers to call in to the subscriber’s

prerecorded announcement or live service. 900 service

does not include the charge for: collection services

provided by the seller of the telecommunications

services to the subscriber, or service or product sold

by the subscriber to the subscriber’s customer. The

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service is typically marketed under the name “900”

service, and any subsequent numbers designated by the

Federal Communications Commission,

c. Interstate and International “private communications

service”. “Private communications service” means a

telecommunications service that entitles the customer

to exclusive or priority use of a communications

channel or group of channels between or among

termination points, regardless of the manner in which

such channel or channels are connected, and includes
ral Communications Commission,

c. Interstate and International “private communications

service”. “Private communications service” means a

telecommunications service that entitles the customer

to exclusive or priority use of a communications

channel or group of channels between or among

termination points, regardless of the manner in which

such channel or channels are connected, and includes

switching capacity, extension lines, stations and any

other associated services that are provided in

connection with the use of such channel or channels,

d. “Value-added nonvoice data service”. “Value-added

nonvoice data service” means a service that otherwise

meets the definition of telecommunications services in

which computer processing applications are used to act

on the form, content, code or protocol of the

information or data primarily for a purpose other than

transmission, conveyance, or routing,

e. Interstate and International telecommunications

service which is:

(1) rendered by a company for private use within its

organization, or

(2) used, allocated or distributed by a company to

its affiliated group,

f. Regulatory assessments and charges including charges

to fund the Oklahoma Universal Service Fund, the

Oklahoma Lifeline Fund and the Oklahoma High Cost

Fund, and

g. Telecommunications nonrecurring charges including but

not limited to the installation, connection, change,

or initiation of telecommunications services which are

not associated with a retail consumer sale;

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,

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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:

a. as defined under Industrial Group Numbers 7372 and

7373 of the Standard Industrial Classification (SIC)

Manual, latest version, which derive at least fifty

percent (50%) of their annual gross revenues from the

sale of a product or service to an out-of-state buyer

or consumer, and

b. as defined under Industrial Group Number 7374 of the

SIC Manual, latest version, which derive at least

eighty percent (80%) of their annual gross revenues

from the sale of a product or service to an out-of-

state buyer or consumer.

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
least

eighty percent (80%) of their annual gross revenues

from the sale of a product or service to an out-of-

state buyer or consumer.

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

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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:

a. are loaded on the ship, motor vessel, or barge and

used in the maintenance and operation of the ship,

motor vessel, or barge, or

b. enter into and become component parts of the ship,

motor vessel, or barge;

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:
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:

a. such sale or event may not be held for a period

exceeding three (3) consecutive days,

b. the sale must be conducted within six (6) months of

the date of death of the decedent, and

c. the exemption allowed by this paragraph shall not be

allowed for property that was not part of the

decedent’s estate;

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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:

a. 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 and registered

with the veterans registry created by the Oklahoma

Department of Veterans Affairs; provided, that if the

veteran received the sales tax exemption prior to

November 1, 2020, he or she shall be required to

register with the veterans registry prior to July 1,

2023, in order to remain qualified, or

b. the surviving spouse of the person in subparagraph a

of this paragraph if the person is deceased and the

spouse has not remarried and the surviving spouse of a

person who is determined by the United States

Department of Defense or any branch of the United

States military to have died while in the line of duty

if the spouse has not remarried. Sales for the

benefit of an eligible person to a spouse of the

eligible person or to a member of the household in

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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
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. The Tax

Commission shall promulgate any rules necessary to

implement the provisions of this paragraph, which

shall include rules providing for the disclosure of

information about persons eligible for the exemption

authorized in this paragraph to the Oklahoma

Department of Veterans Affairs, as authorized in

Section 205 of this title;

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

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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-
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

Oklahoma Statutes - Title 68. Revenue and Taxation Page 558

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, 2029, sales

or leases of rolling stock, 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; and

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.