Okla. Stat. tit. 68, § 68-2817

Use value

A. All taxable personal property, except intangible personal

property, personal property exempt from ad valorem taxation, or

household personal property, shall be listed and assessed each year

at its fair cash value, estimated at the price it would bring at a

fair voluntary sale, as of January 1.

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The fair cash value of household personal property shall be

valued at ten percent (10%) of the appraised value of the

improvement to the residential real property within which such

personal property is located as of January 1 each year. The

assessment of household personal property as provided by this

section may be altered by the taxpayer listing such property at its

actual fair cash value. For purposes of establishing the value of

household personal property, pursuant to the requirement of Section

8 of Article X of the Oklahoma Constitution, the percentage of value

prescribed by this section for the household personal property shall

be presumed to constitute the fair cash value of the personal

property.

Stocks of goods, wares, and merchandise shall be assessed at the

value of the average amount on hand during the preceding year, or

the average amount on hand during the part of the preceding year the

stock of goods, wares, or merchandise was at its January 1 location.

Provided, persons primarily engaged in selling lumber and other

building materials including cement and concrete, except for home

centers classified under Industry No. 444110 of the North American

Industrial Classification Systems (NAICS) Manual, shall be assessed

at the average value of the inventory on hand as of January 1 of

each year and the value of the inventory on hand as of December 31

of the same year.

B. All taxable real property shall be assessed annually as of

January 1, at its fair cash value, estimated at the price it would

bring at a fair voluntary sale for:

1. The highest and best use for which the property was actually

used during the preceding calendar year; or

2. The highest and best use for which the property was last

classified for use if not actually used during the preceding

calendar year.

When improvements upon residential real property are divided by

a taxing jurisdiction line, those improvements shall be valued and

assessed in the taxing jurisdiction in which the physical majority

of those improvements are located.

The Ad Valorem Division of the Oklahoma Tax Commission shall be

responsible for the promulgation of rules which shall be followed by

each county assessor of the state, for the purposes of providing for

the equitable use valuation of locally assessed real property in

this state. Agricultural land and nonresidential improvements

necessary or convenient for agricultural purposes shall be assessed

for ad valorem taxation based upon the highest and best use for

which the property was actually used, or was previously classified

for use, during the calendar year next preceding January 1 on which

the assessment is made.

C. The use value of agricultural land shall be based on the

income capitalization approach using cash rent. The rental income

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shall be calculated using the direct capitalization method based

upon factors including, but not limited to:

1. Soil types, as depicted on soil maps published by the

Natural Resources Conservation Service of the United States

Department of Agriculture;

2. Soil productivity indices approved by the Ad Valorem

Division of the Tax Commission;

3. The specific agricultural purpose of the soil based on use

categories approved by the Ad Valorem Division of the Tax

Commission; and

4. A capitalization rate to be determined annually by the Ad

Valorem Division of the Tax Commission based on the sum of the

average first mortgage interest rate charged by the Federal Land
y indices approved by the Ad Valorem

Division of the Tax Commission;

3. The specific agricultural purpose of the soil based on use

categories approved by the Ad Valorem Division of the Tax

Commission; and

4. A capitalization rate to be determined annually by the Ad

Valorem Division of the Tax Commission based on the sum of the

average first mortgage interest rate charged by the Federal Land

Bank for the immediately preceding five (5) years, weighted with the

prevailing rate or rates for additional loans or equity, and the

effective tax rate.

The final use value will be calculated using the soil

productivity indices and the agricultural use classification as

defined by rules promulgated by the State Board of Equalization.

This subsection shall not be construed in a manner which is

inconsistent with the duties, powers, and authority of the Board as

to valuation of the counties as fixed and defined by Section 21 of

Article X of the Oklahoma Constitution.

However, in calculating the use value of buffer strips as

defined in Section 2817.2 of this title, exclusive consideration

shall be based only on income from production agriculture from such

buffer strips, not including federal or state subsidies, when valued

as required by subsection C of Section 2817.2 of this title.

D. The use value of nonresidential improvements on agricultural

land shall be based on the cost approach to value estimation using

currently updated cost manuals published by the Marshall and Swift

Company or similar cost manuals approved by the Ad Valorem Division

of the Tax Commission. The use value estimates for the

nonresidential improvements shall take obsolescence and depreciation

into consideration in addition to necessary adjustments for local

variations in the cost of labor and materials. This section shall

not be construed in a manner which is inconsistent with the duties,

powers, and authority of the Board as to equalization of valuation

of the counties as determined and defined by Section 21 of Article X

of the Oklahoma Constitution.

The use value of facilities used for poultry production shall be

determined according to the following procedures:

1. The Ad Valorem Division of the Tax Commission is hereby

directed to develop a standard system of valuation of both real and

personal property of such facilities, which shall be used by all

county assessors in this state, under which valuation based on the

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following shall be presumed to be the fair cash value of the

property:

a. for real property, a ten-year depreciation schedule,

at the end of which the residual value is twenty

percent (20%) of the value of the facility during its

first year of operation, and

b. for personal property, a five-year depreciation

schedule, at the end of which the residual value is

zero;

2. Such facilities shall be valued only in comparison to other

facilities used exclusively for poultry production. Such a facility

which is no longer used for poultry production shall be deemed to

have no productive use;

3. During the first year such a facility is placed on the tax

rolls, its fair cash value shall be presumed to be the lesser of the

actual purchase price or the actual documented cost of construction;

and

4. For the purpose of determining the valuation of

nonresidential improvements used for poultry production, the

provisions of this subsection shall be applicable and such

improvements shall not be considered to be commercial property.

E. The value of investment in property used exclusively by an

oil refinery that is used wholly as a facility, device, or method

for the desulphurization of gasoline or diesel fuel as defined in

Section 2817.3 of this title shall not be included in the

capitalization used in the determination of fair market value of

such oil refinery if such property would qualify as exempt property
property.

E. The value of investment in property used exclusively by an

oil refinery that is used wholly as a facility, device, or method

for the desulphurization of gasoline or diesel fuel as defined in

Section 2817.3 of this title shall not be included in the

capitalization used in the determination of fair market value of

such oil refinery if such property would qualify as exempt property

pursuant to Section 2902 of this title, whether or not an

application for such exemption is made by an otherwise qualifying

manufacturing concern owning the property described by Section

2817.3 of this title.

F. The use value of a lot in any platted addition or a

subdivision in a city, town, or county zoned for residential,

commercial, industrial, or other use shall be deemed to be the fair

cash value of the underlying tract of land platted, divided by the

number of lots contained in the platted addition or subdivision

until the lot shall have been conveyed to a bona fide purchaser or

the lot with building or buildings located thereon shall have been

occupied other than as a sales office by the owner thereof, or shall

have been leased, whichever event shall first occur. One who

purchases a lot for the purposes of constructing and selling a

building on such lot shall not be deemed to be a bona fide purchaser

for purposes of this section. However, if the lot is held for a

period longer than two (2) years before construction, then the

assessor may consider the lot to have been conveyed to a bona fide

purchaser. The cost of any land or improvements to any real

property required to be dedicated to public use including, but not

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limited to, streets, curbs, gutters, sidewalks, storm or sanitary

sewers, utilities, detention or retention ponds, easements, parks,

or reserves shall not be utilized by the county assessor in the

valuation of any real property for assessment purposes.

G. The transfer of real property without a change in its use

classification shall not require a reassessment thereof based

exclusively upon the sale value of the property. However, if the

county assessor determines:

1. That by reason of the transfer of a property there is a

change in the actual use or classification of the property; or

2. That by reason of the amount of the sales consideration it

is obvious that the use classification prior to the transfer of the

property is not commensurate with and would not justify the amount

of the sales consideration of the property;

then the assessor shall, in either event, reassess the property for

the new use classification for which the property is being used, or,

the highest and best use classification for which the property may,

by reason of the transfer, be classified for use.

H. When the term "fair cash value" or the language "fair cash

value, estimated at the price it would bring at a fair voluntary

sale" is used in the Ad Valorem Tax Code, in connection with and in

relation to the assessment of real property, it is defined to mean

and shall be given the meaning ascribed and assigned to it in this

section and when the term or language is used in the Code in

connection with the assessment of personal property it shall be

given its ordinary or literal meaning.

I. Where any real property is zoned for a use by a proper

zoning authority, and the use of the property has not been changed,

the use and not zoning shall determine assessment. Any reassessment

required shall be effective January 1 following the change in use.

Taxable real property need not be listed annually with the county

assessor.

J. If any real property shall become taxable after January 1 of

any year, the county assessor shall assess the same and place it

upon the tax rolls for the next ensuing year. When any building is

constructed upon land after January 1 of any year, the value of the
ll be effective January 1 following the change in use.

Taxable real property need not be listed annually with the county

assessor.

J. If any real property shall become taxable after January 1 of

any year, the county assessor shall assess the same and place it

upon the tax rolls for the next ensuing year. When any building is

constructed upon land after January 1 of any year, the value of the

building shall be added by the county assessor to the assessed

valuation of the land upon which the building is constructed at the

fair cash value thereof for the next ensuing year. However, after

the building has been completed it shall be deemed to have a value

for assessment purposes of the fair cash value of the materials used

in such building only, until the building and the land on which the

building is located shall have been conveyed to a bona fide

purchaser or shall have been occupied or used for any purpose other

than as a sales office by the owner thereof, or shall have been

leased, whichever event shall first occur. The county assessor

shall continue to assess the building based upon the fair market

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value of the materials used therein until the building and land upon

which the building is located shall have been conveyed to a bona

fide purchaser or is occupied or used for any purpose other than as

a sales office by the owner thereof, or is leased, whichever event

shall first occur.

K. In the event improvements on land or personal property

located therein or thereon are destroyed or partially destroyed, or

the land itself is impaired or partially impaired by fire,

lightning, storm, winds, floodwaters, overflow of streams, or other

cause (all such destruction or impairments being referred to herein

as "damage") during any year, the county assessor shall determine

the amount of damage and shall reassess the property for that year

at the fair cash value of the property, taking into account the

actual loss of functional use of the property occasioned by such

damage. The assessor shall make the appropriate value adjustments

to the property for that tax year up to the time at which the

assessor publishes the "Assessor's Report to the Excise Board" as

required by subsection D of Section 2867 of this title. After such

time, adjustments can be made only by the county board of tax roll

corrections and only after the assessor has certified the tax roll

for that year. The board secretary shall notify property owners in

advance of the time and place at which the value adjustment to their

property will be heard by the board. The board of tax roll

corrections is authorized only to approve or reject the value

adjustment submitted by the county assessor.

L. All taxable personal property used in the exploration of

oil, natural gas, or other minerals including drilling equipment and

rigs, shall be assessed annually at the value set forth in the first

Hadco International monthly bulletin published for the tax year,

using the appropriate depth rating assigned to the drawworks by its

manufacturer and the actual condition of the rig.

M. The value of taxable tangible personal property used in

commercial disposal systems of waste materials from the production

of oil and gas shall not include any contract rights or leases for

the use of such systems nor any value associated with the wellbore

or non-recoverable down-hole material including casing.