Okla. Stat. tit. 68, § 68-1359

There are hereby specifically exempted from the tax levied by

Section 1350 et seq. of this title:

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 nonmanufacturing activity or

process as set forth in paragraph 14 of Section 1352 of this title

shall not be eligible for the exemption provided for in this

subsection by virtue of the activity or process being performed in

conjunction with or integrated into a manufacturing operation.

For the purposes of this paragraph, sales made to any person,

firm or entity that has entered into a contractual relationship for

the construction and improvement of manufacturing goods, wares,

merchandise, property, machinery and equipment for use in a

manufacturing operation shall be considered sales made to a

manufacturer which is defined or classified in the North American

Industry Classification System (NAICS) Manual under Industry Group

No. 324110. Such purchase shall be evidenced by a copy of the sales

ticket or invoice to be retained by the vendor indicating that the

purchases are made for and on behalf of such manufacturer and set

out the name of such manufacturer as well as include a copy of the

Manufacturing Exemption Permit of the manufacturer. Any person who

wrongfully or erroneously certifies that purchases are being made on

behalf of such manufacturer or who otherwise violates this paragraph

shall be guilty of a misdemeanor and upon conviction thereof shall

be fined an amount equal to double the amount of sales tax involved

or incarcerated for not more than sixty (60) days or both;

2. Ethyl alcohol when sold and used for the purpose of blending

same with motor fuel on which motor fuel tax is levied by Section

500.4 of this title;

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

Oklahoma Statutes - Title 68. Revenue and Taxation Page 589

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 this 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 Code.

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 used or to be used more than once and which are

ordinarily known as returnable containers and which do or will

contain beverages 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

Oklahoma for immediate and exclusive use in a state other than

Oklahoma. Provided, no sales at a retail outlet shall qualify for

the exemption under this paragraph;

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 Oklahoma Hazardous Waste Management Act and operated

at the place of waste generation, or facilities approved by the
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 Oklahoma Hazardous Waste Management Act 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 paragraph;

7. Except as otherwise provided by subsection I of Section 3658

of this title pursuant to which the exemption authorized by this

paragraph may not be claimed, 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 paragraph, 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. For the purposes of this paragraph, "qualified

manufacturer or distributor" means:

a. any manufacturing enterprise whose total cost of

construction of a new or expanded facility exceeds the

Oklahoma Statutes - Title 68. Revenue and Taxation Page 590

sum of Five Million Dollars ($5,000,000.00) and in

which at least one hundred (100) new full-time-

equivalent employees, as certified by the Oklahoma

Employment Security Commission, are added and

maintained for a period of at least thirty-six (36)

months as a direct result of the new or expanded

facility,

b. any manufacturing enterprise whose total cost of

construction of a new or expanded facility exceeds the

sum of Ten Million Dollars ($10,000,000.00) and the

combined cost of construction material, machinery,

equipment and other tangible personal property exempt

from sales tax under the provisions of this paragraph

exceeds the sum of Fifty Million Dollars

($50,000,000.00) and in which at least seventy-five

(75) new full-time-equivalent employees, as certified

by the Oklahoma Employment Security Commission, are

added and maintained for a period of at least thirty-

six (36) months as a direct result of the new or

expanded facility,

c. any manufacturing enterprise whose total cost of

construction of an expanded facility exceeds the sum

of Three Hundred Million Dollars ($300,000,000.00) and

in which the manufacturer has and maintains an average

employment level of at least one thousand seven

hundred fifty (1,750) full-time-equivalent employees,

as certified by the Employment Security Commission, or

d. 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

seventy-five percent (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 Forty Million Dollars ($40,000,000.00) with

such construction commencing on or after July 1, 2005,

and before December 31, 2005, and which at least fifty

new full-time-equivalent employees, as certified by

the Oklahoma Employment Security Commission, are added

and maintained for a period of at least thirty-six
whose total cost of

construction of a new or expanded facility exceeds the

sum of Forty Million Dollars ($40,000,000.00) with

such construction commencing on or after July 1, 2005,

and before December 31, 2005, and which at least fifty

new full-time-equivalent employees, as certified by

the Oklahoma Employment Security Commission, are added

and maintained for a period of at least thirty-six

(36) months as a direct result of the new or expanded

facility.

For purposes of this paragraph, 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

Oklahoma Statutes - Title 68. Revenue and Taxation Page 591

construction shall not include attorney fees. For purposes of

subparagraph c of this paragraph, the total cost of construction

shall also include the cost of qualified depreciable property as

defined in Section 2357.4 of this title and labor services performed

in the construction of an expanded facility. For the purpose of

subparagraph d of this paragraph, the total cost of construction

shall also include the cost of all parking, security and dock

structures or facilities necessary to manage, process or secure

vehicles used to receive and/or distribute groceries through such a

facility. The employment requirement of this paragraph 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 section, "manufacturing facility" shall mean building and

land improvements used in manufacturing as defined in Section 1352

of this title 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 seventy percent (70%)

of which are made in Oklahoma 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 ten percent (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 ten percent (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

paragraph. The exemption authorized pursuant to subparagraph d of

this paragraph 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 Oklahoma 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

Oklahoma Statutes - Title 68. Revenue and Taxation Page 592

satellite receiving dish or antenna, and ends with the transmission
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

Oklahoma Statutes - Title 68. Revenue and Taxation Page 592

satellite receiving dish or antenna, and ends with the transmission

of the broadcast signal from the broadcast antenna system. For

purposes of this paragraph, "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 paragraph, "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

paragraph 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 this state;

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;

15. Sales of tangible personal property and services used or

consumed in all phases of the extraction and manufacturing of

crushed stone and sand, including but not limited to site

preparation, dredging, overburden removal, explosive placement and

detonation, onsite material hauling and/or transfer, material

washing, screening and/or crushing, product weighing and site

reclamation;

16. Sale, use or consumption of paper stock and other raw

materials which are manufactured into commercial printed material in

Oklahoma Statutes - Title 68. Revenue and Taxation Page 593

this state primarily for use and delivery outside this state. For

the purposes of this section, "commercial printed material" shall

include magazines, catalogs, retail inserts and direct mail; and

17. Beginning on the effective date of this act and ending on

December 31, 2029, sales of machinery and equipment, including but

not limited to, servers and computers, racks, power distribution

units, cabling, switchgear, transformers, substations, software, and

network equipment, and electricity used for commercial mining of

digital assets purposes in a colocation facility.

For purposes of this paragraph:

a. "blockchain technology" means shared or distributed

data structures or digital ledgers governed by

consensus protocols and maintained by peer-to-peer

networks that:
ribution

units, cabling, switchgear, transformers, substations, software, and

network equipment, and electricity used for commercial mining of

digital assets purposes in a colocation facility.

For purposes of this paragraph:

a. "blockchain technology" means shared or distributed

data structures or digital ledgers governed by

consensus protocols and maintained by peer-to-peer

networks that:

(1) Store digital transactions, and

(2) Verify and secure transactions cryptographically,

b. "colocation facility" means a facility or facilities

located in this state and utilized in the commercial

mining of digital assets or in hosting persons engaged

in the commercial mining of digital assets through

utilization of the facility's infrastructure,

including servers and network hardware powered by

Internet bandwidth, electricity, and other services

generally required for such mining operations.

Provided, no facility shall qualify as a "colocation

facility" unless the facility has entered into a load

reduction agreement,

c. "commercial mining of digital assets" means the

process through which blockchain technology is used to

mine digital assets at a colocation facility,

d. "digital assets" means a type of virtual currency that

utilizes blockchain technology and that:

(1) can be digitally traded between users, or

(2) can be converted or exchanged for legal tender,

and

e. "load reduction agreement" means an agreement between

the customer and the local electric cooperative,

municipality, electric utility, or market operator

to temporarily reduce or curtail the customer's use of

electric power in order to respond to inclement

weather or other adverse conditions,

f. "mine" or "mining" means the process through which

blockchain transactions are verified and accepted by

adding the transactions to a blockchain ledger, which

involves solving complex and mathematical

cryptographic problems associated with a block

containing transaction data.

Oklahoma Statutes - Title 68. Revenue and Taxation Page 594