2006 Oklahoma Code - Title 68. — Revenue and Taxation
OKLAHOMA STATUTES
TITLE 68.
REVENUE AND TAXATION
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§68-12-1213. Renumbered as § 1213 of this title by Laws 1965, c. 215, § 2.
§68-21-103. Renumbered as § 2103 of this title by Laws 1965, c. 215, § 3.
§68101. Tax code.
The several tax laws recodified as Tax Codes, together with this act, shall be known as the Oklahoma Tax Code.
Laws 1965, c. 235, § 1, emerg. eff. June 17, 1965.
§68102. Creation Duties, powers and authority Membership Appointment and confirmation Removal Term Vacancies Residency Administrator.
The "Oklahoma Tax Commission" is hereby created, and shall possess such duties, powers and authority as are hereinafter defined, and as are now or as may hereafter be conferred upon it by law. The Tax Commission shall consist of three (3) persons to be appointed by the Governor of the State of Oklahoma by and with the consent of the State Senate of the State of Oklahoma. No more than two (2) members of the Tax Commission shall be, or shall have been in the previous six (6) months, members of the same political party. The members of the Tax Commission shall not be subject to removal from office at the will and pleasure of the Governor, but may be removed only for cause and in the manner provided by law for the removal of state officials not subject to impeachment under the provision of Section 1, Article VIII, of the Constitution.
The members of the Oklahoma Tax Commission as now constituted shall continue to serve until the members of the Tax Commission created by this act are duly appointed, confirmed and qualified. Within twenty (20) days after the effective date of this act, the Governor shall appoint a new Tax Commission with the term of office of one member to expire on the second Monday of January 1955, the term of office of the second member to expire on the second Monday of January 1957, and the term of office of the third member to expire on the second Monday of January 1959. Except as set out above the term of office of each member of said Commission shall be for six (6) years with the term of office of one member of the Tax Commission expiring on the second Monday of January of each oddnumbered year. Provided, however, that a member of the Commission shall continue to serve after the expiration of his term of office until his successor is appointed, confirmed and qualified. In the event of a vacancy in the membership of the Tax Commission before the expiration of any term of office, the Governor shall fill such vacancy for the unexpired term within twenty (20) days, and no member of the Commission shall be entitled to draw any salary or perform any service until his appointment is confirmed by the Senate, if the Senate then be in session. If the Senate be not in session, then such member may serve and draw his salary until some special or regular session convenes; and if his appointment is then not confirmed within twenty (20) days, he shall cease to perform such services and cease to draw a salary.
Each member of the Tax Commission shall, at the time of his appointment, be a resident and citizen of the State of Oklahoma, and shall devote all of his time to the administration of the affairs of the Tax Commission. The Governor shall at the time of making the initial appointments, and also at the time of making each appointment to fill a vacancy on the Commission as provided by this act, designate one member to serve as Chairman, one member to serve as Vice Chairman and one member to serve as Secretary.
The Oklahoma Tax Commission shall appoint an administrator who shall serve at the pleasure of the Commission and who shall be the administrative officer of the Commission and manage the activities of the employees provided for in Sections 104 and 105 of this title.
Amended by Laws 1986, c. 223, § 32, operative July 1, 1986; Laws 1987, c. 236, § 140, emerg. eff. July 20, 1987.
§68-102.1. Salaries.
A. For any period commencing on or after January, 1995, the annual salary of an officer of the Oklahoma Tax Commission shall be increased by the percentage or amount provided for salary increases for employees of the Oklahoma Tax Commission for each fiscal year beginning with Fiscal Year 1995, if such employee salary increases are authorized by the Legislature.
B. From and after the beginning date of a term of office which commences in, or after January 1997, the annual salary, payable monthly, of the officers of the Tax Commission shall be as follows:
Chairman $85,000.00
Vice-Chairman $84,500.00
Secretary-Member $84,500.00
C. Effective January 2005, from and after the beginning date of a term of office which commences in or after January 2003, the annual salary, payable to the officers of the Tax Commission shall be equal to that paid to a judge of the Workers' Compensation Court.
D. All such salaries shall be payable monthly out of monies available for expenditure for such purpose.
Added by Laws 1967, c. 238, § 1, emerg. eff. May 4, 1967. Amended by Laws 1974, c. 311, § 3, emerg. eff. May 31, 1974; Laws 1976, c. 232, § 6, emerg. eff. June 15, 1976; Laws 1978, c. 266, § 7, emerg. eff. May 10, 1978; Laws 1979, c. 264, § 8, emerg. eff. June 5, 1979; Laws 1980, c. 269, § 6, emerg. eff. June 11, 1980; Laws 1981, c. 333, § 13, eff. July 1, 1981; Laws 1982, c. 350, § 15, emerg. eff. June 2, 1982; Laws 1985, c. 345, § 8, emerg. eff. July 30, 1985; Laws 1986, c. 223, § 33, operative July 1, 1986; Laws 1989, c. 279, § 14, operative July 1, 1989; Laws 1992, c. 367, § 21, eff. July 1, 1992; Laws 1997, c. 384, § 10, emerg. eff. June 11, 1997; Laws 1998, c. 396, § 1, emerg. eff. June 10, 1998; Laws 2002, c. 389, § 3, emerg. eff. June 4, 2002.
§68102.2. Political activities by members of Tax Commission prohibited.
No member of the Oklahoma Tax Commission shall, directly or indirectly, solicit, receive or in any manner be concerned in soliciting or receiving any assessment, subscription or contribution for any political organization, candidacy or other political purpose. No member of said Commission shall be a member of any national, state or local committee of a political party, or an officer or a member of a committee of a partisan political club, or a candidate for nomination or election to any paid public office, or take part in the management or affairs of any political party or in any political campaign, except to exercise his right as a citizen privately to express his opinion and to cast his vote. Laws 1969 C. 335, Sec. 1.
Laws 1969, c. 335, § 1.
§68102.3. Additional duties and compensation for commissioners.
In addition to their other duties, the members of the Oklahoma Tax Commission shall make a continuous study of the critical national energy crisis to determine its impact on the tax revenues of Oklahoma, particularly the revenues derived from the gross production taxes and gasoline and other motor fuel taxes and also to determine and project the degree of the consequent erosion of the present tax structure of the state which will be caused by the gradual change from the use of oil and natural gas as a basic fuel for energy. The Commission shall make periodic appraisals concerning the several taxes directly related to the fuels presently used by motor vehicles and other modes of travel and for heating and cooling, as well as the tax paid by those engaged in the business of producing oil and gas, as the use of substitute types of fuels evolve which undoubtedly will result in substantial changes in the types and size of vehicles used in the business activities of many taxpayers.
The Commission shall also develop such econometric models as are deemed necessary, compile data and other information as to the possible rate of decline in tax revenue and report to the Governor, Speaker of the House of Representatives and President Pro Tempore of the Senate by the second Tuesday of every year, to insure the availability of revenue to properly operate and carry on the functions of state and local government.
For the performance of such additional duties, the members of said Commission not receiving the maximum salary provided in Section 102.1 of Title 68 of the Oklahoma Statutes shall be compensated as follows:
The Chairman of said Commission shall receive Eleven Thousand Five Hundred Dollars ($11,500.00) per annum and the Vice Chairman and SecretaryMember of said Commission shall each receive Fifteen Thousand Five Hundred Dollars ($15,500.00) per annum, payable monthly. Provided, it is the intent hereof that no member of said Commission shall receive total compensation greater than that provided in Section 102.1 of Title 68 of the Oklahoma Statutes as amended.
Laws 1974, c. 309, § 4, emerg. eff. May 31, 1974; Laws 1975, c. 247, § 7, emerg. eff. June 2, 1975; Laws 1976, c. 232, § 7, emerg. eff. June 15, 1976; Laws 1978, c. 266, § 8, emerg. eff. May 10, 1978; Laws 1979, c. 264, § 9, emerg. eff. June 5, 1979; Laws 1980, c. 269, § 7, emerg. eff. June 11, 1980.
§68-103. Conduct of hearings - Production of books and records - Perjury.
In the performance of its duties, as defined by law, the Tax Commission, or any member thereof, shall have the power to administer oaths, to conduct hearings, and to compel the attendance of witnesses and the production of the books, records and papers of any person, firm, association or corporation.
Any person, or any member of any firm or association, or any official, agent or employee of any corporation, who shall fail or refuse to testify, or who shall fail or refuse to produce any books, records or papers which the Commission shall require; or who shall fail or refuse to permit the examination of the same; or who shall fail or refuse to furnish any other evidence or information which the Commission, or any member thereof, may require; or who shall fail or refuse to answer any question which may be put to him by said Commission, or any member thereof, touching the business, property, assets or effects of any such person, firm, association or corporation, or the valuation thereof or the income or profits therefrom, shall be guilty of a misdemeanor, and, upon conviction, shall be punished by a fine of not more than Five Hundred Dollars ($500.00), or by imprisonment in the jail of the county where such offense shall have been committed for not more than one (1) year, or by both such fine and imprisonment.
Any person, or member of any firm or association, or any official, agent or employee of any corporation, who shall knowingly make false answer to any question which may be put to him by the Commission, or any member thereof, touching the business, property, assets or effects of any such person, firm, association or corporation, or the valuation thereof or the income or profits therefrom; or who shall make or present any false affidavit concerning any list, schedule, statement, report or return, or for any other purpose, filed with the Commission or required to be filed by this Code or by any other law of the state, shall be guilty of the felony of perjury, and, upon conviction, shall be punished as provided by law.
Added by Laws 1965, c. 235, § 1, emerg. eff. June 17, 1965. Amended by Laws 1997, c. 133, § 550, eff. July 1, 1999.
NOTE: Laws 1998, 1st Ex.Sess., c. 2, § 23 amended the effective date of Laws 1997, c. 133, § 550 from July 1, 1998, to July 1, 1999.
§68104. Employees and expenses Bonds.
The Tax Commission may employ such employees and incur such expense as may be necessary for the proper discharge of its duties under the limitations and restrictions as hereinafter set out. All such employees who shall be required to handle public monies, or who shall be responsible therefor, shall give bonds for the honest and faithful performance of their duties, in such amounts as may be fixed by the Commission.
Laws 1965, c. 235, § 1.
§68105. Attorneys for Commission.
A. The Tax Commission shall employ a Chief Attorney to be designated "General Counsel" and other attorneys each to be designated "attorney" who shall be the legal advisors for the Commission and are authorized to appear for and represent the Commission in any and all litigation that may arise in the discharge of its duties.
B. The General Counsel or the district attorney shall initiate criminal actions for violations of the tax laws of this state in the district court of the county in which the defendant resides or maintains a place of business. The attorneys for the Tax Commission may prosecute such criminal actions or may, upon request of a district attorney, appear and assist in the prosecution of such actions initiated by the district attorney.
C. For purposes of this section, the term "tax laws of this state" means any law of the State of Oklahoma which levies, imposes, provides for administration of, or in any way relates to a tax, fee, or revenue raising property which is collected by or required to be deposited with the Commission.
D. The General Counsel and attorneys shall devote all of their time to the Commission and their salaries shall be fixed by the Commission.
Amended by Laws 1983, c. 275, § 3, emerg. eff. June 24, 1983; Laws 1984, c. 292, § 10, operative July 1, 1984; Laws 1985, c. 345, § 14, emerg. eff. July 30, 1985.
§68-105.1. Designation of peace officer to conduct personnel investigations and background checks.
The Oklahoma Tax Commission shall have the authority to designate as a peace officer the employee in the position of Director of Internal Affairs for the purpose of conducting personnel investigations and background checks. An employee designated as a peace officer pursuant to this section shall have the authority to review information contained in the files of federal, state or local law enforcement officials in order to conduct the investigations prescribed by this section. The employee designated as a peace officer shall not be authorized to carry a firearm nor shall be required to be certified pursuant to Section 3311 of Title 70 of the Oklahoma Statutes.
Added by Laws 1990, c. 339, § 1, emerg. eff. May 31, 1990.
§68106. Audit of books and accounts Reports Special audit Expenses.
The State Auditor and Inspector is hereby authorized and directed to make a continuous examination and audit of the books and accounts of the Tax Commission, making separate reports for each fiscal year ending June 30. Said report shall be distributed as follows:
1. One (1) copy to be filed with the Governor;
2. One (1) copy to be filed with the Tax Commission;
3. One (1) copy to be filed with the State Budget Director;
4. One (1) copy to be filed with the President Pro Tempore of the Senate;
5. One (1) copy to be filed with the Speaker of the House of Representatives;
6. One (1) copy to be filed with the Legislative Service Bureau; and
7. One (1) copy to be retained in the office of the State Auditor and Inspector as a public record.
The audit for each fiscal year shall, when possible, be completed by the close of the following fiscal year. It shall also be the duty of the State Auditor and Inspector to make a special audit at any time upon a written request of the Tax Commission or the Governor. The Tax Commission shall furnish the necessary office space for the employees of the State Auditor and Inspector making said audit and, to the extent of the amount included in the Tax Commission's appropriation therefor, the Tax Commission shall pay the expenses of such audits, including personal services, equipment and supplies, from said appropriation. The salaries of the head deputy in charge of such audit, and of his assistants, shall be the same as provided by law for the head deputy State Auditor and Inspector and assistant deputy State Auditors and Inspectors.
Amended by Laws 1985, c. 319, § 17, operative Oct. 1, 1985.
§68107. Disbursements to be within appropriations.
The total amount disbursed by the Tax Commission in any one fiscal year for the payment of salaries, expenses and incidentals shall not exceed the amount appropriated therefor by the Legislature.
Laws 1965, c. 235, § 1.
§68108. Schedule of fees and charges Transcripts and other services.
The Tax Commission shall have the authority to adopt and promulgate a schedule of fees and charges for services rendered relating to transcripts and certificates as to records; for transcripts for appeal and other services, involving the furnishing of copies of proceedings, files and records; and, in case of transcripts of records for appeal, the Commission may prescribe a reasonable charge therefor to be paid by the party demanding the record, which said fees and charges shall be credited to miscellaneous receipts of the Commission. Laws 1965 C. 235, Sec. 1.
Laws 1965, c. 235, § 1.
§68109. Legislative intent.
It is hereby declared to be the intention of the Legislature that the purpose of this act is to revise, amend and reenact those statutes set forth in full herein by deleting language and provisions contained in Section 3 through Section 10b of Title 68 O.S.1961, which provisions have long since become obsolete by reason of changing conditions or superseded by provisions of later laws, to make same consistent with present conditions and laws and to reenact same as a part of the Oklahoma Tax Code.
Laws 1965, c. 235, § 1.
§68110. Repealer.
68 O.S.1961, Sections 1, 3, 4, 5, 6, 7, 8, 9, 10, 10a and 10b, inclusive, are hereby repealed for the purpose of being revised, amended and reenacted as herein set forth. Laws 1965 C. 235, Sec. 1.
Laws 1965, c. 235, § 1.
§68112. Tax Commission Fund Credits for all miscellaneous receipts.
All miscellaneous receipts authorized by law to be charged and collected by the Oklahoma Tax Commission for furnishing of copies of transcripts, minutes or other recordings of proceedings, or reports or other information filed with the Commission, or any information authorized by law to be furnished shall be placed to the credit of the Oklahoma Tax Commission Fund.
Amended by Laws 1986, c. 269, § 17, operative July 1, 1986.
§68-113. Tax Commission Reimbursement Fund - Full-time employees.
There is hereby created in the State Treasury a revolving fund for the Oklahoma Tax Commission to be known as the "Tax Commission Reimbursement Fund". Said revolving fund shall consist of any funds received by the Tax Commission for data processing services or equipment rental and any funds received by the Tax Commission from any incorporated city, town, or county pursuant to a contractual agreement for the augmentation of the enforcement and collection of municipal or county taxes entered into pursuant to the provisions of Sections 1371 or 2702 of this title. The Tax Commission is authorized to hire full-time-equivalent employees as necessary to perform such duties as to fulfill contractual agreements authorized pursuant to Sections 1371 and 2702 of this title, however, such employees hired to perform such contractual duties shall be supported solely by funds in the Tax Commission Reimbursement Fund which are collected by the Tax Commission from incorporated cities, towns, and counties pursuant to such contractual agreements and such employees shall be terminated upon the discontinuation of such funds or inadequate funds to support such positions. Such full-time-equivalent employees shall be in the unclassified service and shall not be subject to any provisions of the Oklahoma Personnel Act or to any of the rules or regulations promulgated by the Office of Personnel Management except leave regulations. All fees collected and apportioned to this fund under the Oklahoma Vehicle License and Registration Act, Section 1101 et seq. of Title 47 of the Oklahoma Statutes, may be used by the Motor Vehicle Division of the Oklahoma Tax Commission to pay all costs incurred in the issuance of certificates of title and inspection of vehicles, including, but not limited to, additional computer costs for the Tax Commission and motor license agents and the check verification system authorized pursuant to the provisions of paragraph 1 of subsection A of Section 1144 of Title 47 of the Oklahoma Statutes or be used for capital expenditures as authorized by the Oklahoma State Legislature. For the fiscal year beginning July 1, 2004, disbursements from the fund shall be exempt from all agency budget limits.
Added by Laws 1985, c. 197, § 8, operative July 1, 1985. Amended by Laws 1986, c. 170, § 1, emerg. eff. May 9, 1986; Laws 1989, c. 290, § 13, emerg. eff. May 24, 1989; Laws 1990, c. 264, § 113, operative July 1, 1990; Laws 1997, c. 294, § 8, eff. July 1, 1997 ; Laws 2004, c. 504, § 16, eff. July 1, 2004.
§68114. Payment of fees for employees in performance of duties.
The Oklahoma Tax Commission may expend monies to pay membership fees for Commission members or employees of the Commission in regional or national tax associations as the Commission deems in the best interest of this state for education and training in tax administration, practices, and procedures, and any other fees required to be paid by an employee in the performance of his official duties.
Added by Laws 1986, c. 269, § 10, operative July 1, 1986.
§68116. Mineral interests in land Taxation of owners, heirs, devisees or assigns Publication of information from estate tax records Confidentiality Fees Revolving fund.
For the purpose of assisting the public in locating owners of mineral interests and other property, or the heirs, devisees and assigns of such owners, the Oklahoma Tax Commission is authorized and directed to make available to the public, by display or by request by mail or otherwise, reports from an annual listing, for the years when an index is available, of the names of decedents from its estate tax records, the date of death, address, county in which the probate was conducted and the number assigned to the probate.
All other information of the Commission shall remain confidential, as prescribed in Section 205 of Title 68 of the Oklahoma Statutes or as otherwise provided by law.
The Commission is authorized to prescribe procedures and may assess reasonable fees to cover costs of the services rendered, and may establish a revolving fund for such revenues, which may be a continuing fund not subject to fiscal limitations.
Added by Laws 1988, c. 146, § 1, operative July 1, 1988.
§68-117. Electronic access to data and reports.
The Oklahoma Tax Commission, upon request, shall provide the Office of State Finance, the Oklahoma State Senate and the Oklahoma State House of Representatives electronic access to any aggregate data and reports used by the Oklahoma Tax Commission in developing revenue estimates and economic forecasts. The aggregate data and reports which will be made accessible pursuant to the provisions of this section shall not include any records or other information required by law to be kept confidential.
Added by Laws 1995, c. 325, § 4, eff. July 1, 1995.
§68-118. Written estimate of revenue gain or loss and written statement of recommendation as to proposed or actual tax law changes - Annual forecast of gross production tax revenues.
A. Upon receipt of a written request from a member or employee of the Legislature, the Oklahoma Tax Commission shall provide:
1. A written estimate of the revenue gain or loss to the state as a result of an actual or proposed change to a state tax law; and
2. A written statement of the Tax Commission's recommendation to the State Board of Equalization as to the change in the amount certified as available for appropriation by the Legislature as a result of an actual or proposed change to a state tax law.
The Tax Commission shall provide such estimate and statement within two (2) weeks of the date the request was received unless the member or employee of the Legislature specifies an earlier date. If the Tax Commission determines that it is unable to provide such estimate and statement within the time period required by this section, it shall provide a written explanation and date by which the estimate and statement will be provided to the member or employee.
B. For the purpose of providing an annual forecast of gross production tax revenues from the production of natural and casinghead gas to the Office of State Finance, the Tax Commission shall subscribe to appropriate reference materials which provide economic outlook of future gas prices that have most closely followed the historical trend of Oklahoma gas prices. To determine the average differential between the published forecasted prices and Oklahoma gas prices, the Tax Commission shall compare prices in at least twenty-four (24) of the immediate thirty-six (36) previous months of production. The Tax Commission shall utilize the procedures provided herein to forecast the collection of gross production tax revenues from the production of natural and casinghead gas for the fiscal year beginning July 1, 2005, and each fiscal year thereafter.
Added by Laws 1995, c. 325, § 5, eff. July 1, 1995. Amended by Laws 2003, c. 397, § 1; Laws 2005, c. 447, § 1.
§68201. Purpose of Article.
The purpose of this article, which may be cited as the "Uniform Tax Procedure Code", is to provide, so far as is possible, uniform procedures and remedies with respect to all state taxes. Unless otherwise expressly provided in any state tax law, heretofore or hereafter enacted, the provisions of this article shall control and shall be exclusive.
Laws 1965, c. 414, § 2, emerg. eff. July 7, 1965.
§68202. Definitions.
The terms defined in this section shall, in this article, be construed as follows:
(a) The term "Tax Commission" shall mean the Oklahoma Tax Commission;
(b) The term "state tax" shall mean any tax which is payable to, collectible by or administered by the Oklahoma Tax Commission;
(c) The term "state tax law" shall mean any law of the State of Oklahoma which levies, imposes, or relates to a state tax as herein defined;
(d) The term "taxpayer" shall mean:
(1) Any person owing or liable to pay any state tax;
(2) Any person required to file a report, a return, or remit any tax required by the provisions of any state tax law;
(3) Any person required to obtain a license or a permit or to keep any records under the provisions of any state tax law;
(e) The term "person" means an individual, trust, estate, fiduciary, partnership, limited liability company, or a corporation, and shall include any municipal subdivision of the state;
(f) The term "individual" means a natural person;
(g) The term "corporation" means an organization, other than a partnership, as hereinafter defined:
(1) Created or organized under the laws of Oklahoma;
(2) Qualified to do or doing business in Oklahoma, in a corporate or organized capacity, by virtue of creation or organization under the laws of the United States or of some state, territory or district, or of a foreign country;
(3) Associations, jointstock companies, insurance companies, including surety and bond companies;
(4) Business trusts, which shall mean and include common law trusts, such as Massachusetts trusts and every other business organization consisting essentially of an arrangement whereby property is conveyed to one or more trustees for purposes other than the protection and conservation of assets or the protection of debtholders; and
(5) National banking associations, state banks, and trust companies;
(h) The term "fiduciary" means a guardian, trustee, executor, administrator, receiver, conservator or any person, whether individual or corporate, acting in any fiduciary capacity for any person, trust or estate;
(i) The term "partnership" includes a syndicate, group, pool, joint venture or other unincorporated organization, through or by means of which any business, financial operation or venture is carried on, and which is not a trust or estate or classed as a corporation within the provisions of this article; and the term "partner" includes a member of such syndicate, group, pool, joint venture or organization;
(j) The term "limited liability company" means an organization other than a corporation or partnership which is organized pursuant to Section 2000 et seq. of Title 18 of the Oklahoma Statutes. Except as otherwise specifically provided, for all purposes under Title 68 of the Oklahoma Statutes, a domestic limited liability company shall be treated the same and taxed as a domestic partnership and a foreign limited liability company shall be treated the same and taxed as a foreign partnership, provided that such domestic or foreign limited liability companies are classified as partnerships for federal income tax purposes.
Laws 1965, c. 414, § 2, emerg. eff. July 7, 1965; Laws 1985, c. 182, § 1, emerg. eff. June 20, 1985; Laws 1993, c. 366, § 26, eff. Sept. 1, 1993.
§68203. Enforcement by Tax Commission Rules - Electronic filing.
The Oklahoma Tax Commission is hereby authorized to enforce the provisions of Section 201 et seq. of this title and to promulgate and enforce any reasonable rules with respect thereto. The Tax Commission may also prescribe, promulgate and enforce all necessary rules for the purpose of making and filing of all reports required under any state tax law, and such rules as may be necessary to ascertain and compute the tax payable by any taxpayer subject to taxation under any state tax law; and may, at all times, exercise such authority as may be necessary to administer and enforce each and every provision of any state tax law. The Tax Commission is further authorized to require any person filing a report or return required by the provisions of any state tax law to file the report or return by electronic means. The Tax Commission is also authorized to allow a taxpayer to file a return on paper that is required by this title to be filed electronically.
Added by Laws 1965, c. 414, § 2, emerg. eff. July 7, 1965. Amended by Laws 2003, c. 472, § 2.
§68204. Records of official acts of Commission Fees.
The Tax Commission shall keep a record of all its official acts, and shall preserve copies of all rules, regulations, decisions and orders made by it. Copies of any rule, regulation, decision or order made by it in the administration of this article or any state tax law may be authenticated under its official seal and, when so authenticated, shall be evidence in all courts of this state of the same weight and force as the original thereof. For authenticating any such copy the Tax Commission shall be paid a fee of One Dollar ($1.00), said fee to be apportioned to the General Revenue Fund of the state the same as are other fees. Under no circumstances shall the Tax Commission furnish copies of records which it may by law be prohibited from making public.
Laws 1965, c. 414, § 2.
§68-205. Records and files of Commission confidential and privileged - Exceptions - Annual report.
A. The records and files of the Oklahoma Tax Commission concerning the administration of the Uniform Tax Procedure Code or of any state tax law shall be considered confidential and privileged, except as otherwise provided for by law, and neither the Tax Commission nor any employee engaged in the administration of the Tax Commission or charged with the custody of any such records or files nor any person who may have secured information from the Tax Commission shall disclose any information obtained from the records or files or from any examination or inspection of the premises or property of any person.
B. Except as provided in paragraph 26 of subsection C of this section, neither the Tax Commission nor any employee engaged in the administration of the Tax Commission or charged with the custody of any such records or files shall be required by any court of this state to produce any of the records or files for the inspection of any person or for use in any action or proceeding, except when the records or files or the facts shown thereby are directly involved in an action or proceeding pursuant to the provisions of the Uniform Tax Procedure Code or of the state tax law, or when the determination of the action or proceeding will affect the validity or the amount of the claim of the state pursuant to any state tax law, or when the information contained in the records or files constitutes evidence of violation of the provisions of the Uniform Tax Procedure Code or of any state tax law.
C. The provisions of this section shall not prevent the Tax Commission from disclosing the following information and no liability whatsoever, civil or criminal, shall attach to any member of the Tax Commission or any employee thereof for any error or omission in the disclosure of such information:
1. The delivery to a taxpayer or a duly authorized representative of the taxpayer of a copy of any report or any other paper filed by the taxpayer pursuant to the provisions of the Uniform Tax Procedure Code or of any state tax law;
2. The exchange of information that is not protected by the federal Privacy Protection Act, 42 U.S.C., Section 2000aa et seq., pursuant to reciprocal agreements entered into by the Tax Commission and other state agencies or agencies of the federal government;
3. The publication of statistics so classified as to prevent the identification of a particular report and the items thereof;
4. The examination of records and files by the State Auditor and Inspector or the duly authorized agents of the State Auditor and Inspector;
5. The disclosing of information or evidence to the Oklahoma State Bureau of Investigation, Attorney General, Oklahoma State Bureau of Narcotics and Dangerous Drugs Control, any district attorney, or agent of any federal law enforcement agency when the information or evidence is to be used by such officials to investigate or prosecute violations of the criminal provisions of the Uniform Tax Procedure Code or of any state tax law or of any federal crime committed against this state. Any information disclosed to the Oklahoma State Bureau of Investigation, Attorney General, Oklahoma State Bureau of Narcotics and Dangerous Drugs Control, any district attorney, or agent of any federal law enforcement agency shall be kept confidential by such person and not be disclosed except when presented to a court in a prosecution for violation of the tax laws of this state or except as specifically authorized by law, and a violation by the Oklahoma State Bureau of Investigation, Attorney General, Oklahoma State Bureau of Narcotics and Dangerous Drugs Control, district attorney, or agent of any federal law enforcement agency by otherwise releasing the information shall be a felony;
6. The use by any division of the Tax Commission of any information or evidence in the possession of or contained in any report or return filed with any other division of the Tax Commission;
7. The furnishing, at the discretion of the Tax Commission, of any information disclosed by its records or files to any official person or body of this state, any other state, the United States, or foreign country who is concerned with the administration or assessment of any similar tax in this state, any other state or the United States. The provisions of this paragraph shall include the furnishing of information by the Tax Commission to a county assessor to determine the amount of gross household income pursuant to the provisions of Section 8C of Article X of the Oklahoma Constitution or Section 2890 of this title. The Tax Commission shall promulgate rules to give guidance to the county assessors regarding the type of information which may be used by the county assessors in determining the amount of gross household income pursuant to Section 8C of Article X of the Oklahoma Constitution or Section 2890 of this title. The provisions of this paragraph shall also include the furnishing of information to the State Treasurer for the purpose of administration of the Uniform Unclaimed Property Act;
8. The furnishing of information to other state agencies for the limited purpose of aiding in the collection of debts owed by individuals to such requesting agencies;
9. The furnishing of information requested by any member of the general public and stated in the sworn lists or schedules of taxable property of public service corporations organized, existing, or doing business in this state which are submitted to and certified by the State Board of Equalization pursuant to the provisions of Section 2858 of this title and Section 21 of Article X of the Oklahoma Constitution, provided such information would be a public record if filed pursuant to Sections 2838 and 2839 of this title on behalf of a corporation other than a public service corporation;
10. The furnishing of information requested by any member of the general public and stated in the findings of the Tax Commission as to the adjustment and equalization of the valuation of real and personal property of the counties of the state, which are submitted to and certified by the State Board of Equalization pursuant to the provisions of Section 2865 of this title and Section 21 of Article X of the Oklahoma Constitution;
11. The furnishing of information to an Oklahoma wholesaler of low-point beer, licensed under the provisions of Section 163.1 et seq. of Title 37 of the Oklahoma Statutes, of the licensed retailers authorized by law to purchase low-point beer in this state or the furnishing of information to a licensed Oklahoma wholesaler of shipments by licensed manufacturers into this state;
12. The furnishing of information as to the issuance or revocation of any tax permit, license or exemption by the Tax Commission as provided for by law. Such information shall be limited to the name of the person issued the permit, license or exemption, the name of the business entity authorized to engage in business pursuant to the permit, license or exemption, the address of the business entity, and the grounds for revocation;
13. The posting of notice of revocation of any tax permit or license upon the premises of the place of business of any business entity which has had any tax permit or license revoked by the Tax Commission as provided for by law. Such notice shall be limited to the name of the person issued the permit or license, the name of the business entity authorized to engage in business pursuant to the permit or license, the address of the business entity, and the grounds for revocation;
14. The furnishing of information upon written request by any member of the general public as to the outstanding and unpaid amount due and owing by any taxpayer of this state for any delinquent tax, together with penalty and interest, for which a tax warrant or a certificate of indebtedness has been filed pursuant to law;
15. After the filing of a tax warrant pursuant to law, the furnishing of information upon written request by any member of the general public as to any agreement entered into by the Tax Commission concerning a compromise of tax liability for an amount less than the amount of tax liability stated on such warrant;
16. The disclosure of information necessary to complete the performance of any contract authorized by Sections 255 and 262 of this title to any person with whom the Tax Commission has contracted;
17. The disclosure of information to any person for a purpose as authorized by the taxpayer pursuant to a waiver of confidentiality. The waiver shall be in writing and shall be made upon such form as the Tax Commission may prescribe;
18. The disclosure of information required in order to comply with the provisions of Section 2369 of this title;
19. The disclosure to an employer, as defined in Sections 2385.1 and 2385.3 of this title, of information required in order to collect the tax imposed by Section 2385.2 of this title;
20. The disclosure to a plaintiff of a corporation's last-known address shown on the records of the Franchise Tax Division of the Tax Commission in order for such plaintiff to comply with the requirements of Section 2004 of Title 12 of the Oklahoma Statutes;
21. The disclosure of information directly involved in the resolution of the protest by a taxpayer to an assessment of tax or additional tax or the resolution of a claim for refund filed by a taxpayer, including the disclosure of the pendency of an administrative proceeding involving such protest or claim, to a person called by the Tax Commission as an expert witness or as a witness whose area of knowledge or expertise specifically addresses the issue addressed in the protest or claim for refund. Such disclosure to a witness shall be limited to information pertaining to the specific knowledge of that witness as to the transaction or relationship between taxpayer and witness;
22. The disclosure of information necessary to implement an agreement authorized by Section 2702 of this title when such information is directly involved in the resolution of issues arising out of the enforcement of a municipal sales tax ordinance. Such disclosure shall be to the governing body or to the municipal attorney, if so designated by the governing body;
23. The furnishing of information regarding incentive payments made pursuant to the provisions of Sections 3601 through 3609 of this title or incentive payments made pursuant to the provisions of Sections 3501 through 3508 of this title;
24. The furnishing to a prospective purchaser of any business, or his or her authorized representative, of information relating to any liabilities, delinquencies, assessments or warrants of the prospective seller of the business which have not been filed of record, established, or become final and which relate solely to the seller's business. Any disclosure under this paragraph shall only be allowed upon the presentment by the prospective buyer, or the buyer's authorized representative, of the purchase contract and a written authorization between the parties;
25. The furnishing of information as to the amount of state revenue affected by the issuance or granting of any tax permit, license, exemption, deduction, credit or other tax preference by the Tax Commission as provided for by law. Such information shall be limited to the type of permit, license, exemption, deduction, credit or other tax preference issued or granted, the date and duration of such permit, license, exemption, deduction, credit or other tax preference and the amount of such revenue. The provisions of this paragraph shall not authorize the disclosure of the name of the person issued such permit, license, exemption, deduction, credit or other tax preference, or the name of the business entity authorized to engage in business pursuant to the permit, license, exemption, deduction, credit or other tax preference; or
26. The examination of records and files of a person or entity by the Oklahoma State Bureau of Narcotics and Dangerous Drugs Control pursuant to a court order by a magistrate in whose territorial jurisdiction the person or entity resides, or where the Tax Commission records and files are physically located. Such an order may only be issued upon a sworn application by an agent of the Oklahoma State Bureau of Narcotics and Dangerous Drugs Control, certifying that the person or entity whose records and files are to be examined is the target of an ongoing investigation of a felony violation of the Uniform Controlled Dangerous Substances Act and that information resulting from such an examination would likely be relevant to that investigation. Any records or information obtained pursuant to such an order may only be used by the Oklahoma State Bureau of Narcotics and Dangerous Drugs Control in the investigation and prosecution of a felony violation of the Uniform Controlled Dangerous Substances Act. Any such order issued pursuant to this paragraph, along with the underlying application, shall be sealed and not disclosed to the person or entity whose records were examined, for a period of ninety (90) days. The issuing magistrate may grant extensions of such period upon a showing of good cause in furtherance of the investigation. Upon the expiration of ninety (90) days and any extensions granted by the magistrate, a copy of the application and order shall be served upon the person or entity whose records were examined, along with a copy of the records or information actually provided by the Tax Commission.
D. The Tax Commission shall cause to be prepared and made available for public inspection in the office of the Tax Commission in such manner as it may determine an annual list containing the name and post office address of each person, whether individual, corporate, or otherwise, making and filing an income tax return with the Tax Commission.
It is specifically provided that no liability whatsoever, civil or criminal, shall attach to any member of the Tax Commission or any employee thereof for any error or omission of any name or address in the preparation and publication of the list.
E. The Tax Commission shall prepare or cause to be prepared a report on all provisions of state tax law that reduce state revenue through exclusions, deductions, credits, exemptions, deferrals or other preferential tax treatments. The report shall be prepared not later than October 1 of each even-numbered year and shall be submitted to the Governor, the President Pro Tempore of the Senate and the Speaker of the House of Representatives. The Tax Commission may prepare and submit supplements to the report at other times of the year if additional or updated information relevant to the report becomes available. The report shall include, for the previous fiscal year, the Tax Commission's best estimate of the amount of state revenue that would have been collected but for the existence of each such exclusion, deduction, credit, exemption, deferral or other preferential tax treatment allowed by law. The Tax Commission may request the assistance of other state agencies as may be needed to prepare the report. The Tax Commission is authorized to require any recipient of a tax incentive or tax expenditure to report to the Tax Commission such information as requested so that the Tax Commission may provide the information to the Incentive Review Committee or fulfill its obligations as required by this subsection. The Tax Commission may require this information to be submitted in an electronic format. The Tax Commission may disallow any claim of a person for a tax incentive due to its failure to file a report as required under the authority of this subsection. The Tax Commission may consult with the Incentive Review Committee to develop a reporting system to obtain the information requested in a manner that is the least burdensome on the taxpayer.
F. It is further provided that the provisions of this section shall be strictly interpreted and shall not be construed as permitting the disclosure of any other information contained in the records and files of the Tax Commission relating to income tax or to any other taxes.
G. Unless otherwise provided for in this section, any violation of the provisions of this section shall constitute a misdemeanor and shall be punishable by the imposition of a fine not exceeding One Thousand Dollars ($1,000.00) or by imprisonment in the county jail for a term not exceeding one (1) year, or by both such fine and imprisonment, and the offender shall be removed or dismissed from office.
H. Offenses described in Section 2376 of this title shall be reported to the appropriate district attorney of this state by the Tax Commission as soon as the offenses are discovered by the Tax Commission or its agents or employees. The Tax Commission shall make available to the appropriate district attorney or to the authorized agent of the district attorney its records and files pertinent to prosecutions, and such records and files shall be fully admissible as evidence for the purpose of such prosecutions.
Added by Laws 1965, c. 414, § 2, emerg. eff. July 7, 1965. Amended by Laws 1976, c. 123, § 1, emerg. eff. May 18, 1976; Laws 1979, c. 30, § 115, emerg. eff. April 6, 1979; Laws 1983, c. 206, § 2, eff. July 1, 1984; Laws 1984, c. 103, § 1, eff. Nov. 1, 1984; Laws 1985, c. 356, § 1, emerg. eff. July 30, 1985; Laws 1986, c. 218, § 3, emerg. eff. June 9, 1986; Laws 1988, c. 281, § 13, operative July 1, 1988; Laws 1988, c. 330, § 16; Laws 1989, c. 249, § 5, emerg. eff. May 19, 1989; Laws 1990, c. 339, § 2, emerg. eff. May 31, 1990; Laws 1991, c. 293, § 5, emerg. eff. May 30, 1991; Laws 1993, c. 275, § 10, eff. July 1, 1993; Laws 1994, c. 80, § 1, eff. Sept. 1, 1994; Laws 1994, c. 385, § 1, eff. Sept. 1, 1994; Laws 1995, c. 1, § 23, emerg. eff. March 2, 1995; Laws 1995, c. 325, § 1, eff. July 1, 1995; Laws 1996, c. 3, § 12, emerg. eff. March 6, 1996; Laws 1997, c. 304, § 1, emerg. eff. May 29, 1997; Laws 1998, c. 385, § 1, eff. Nov. 1, 1998; Laws 1999, c. 10, § 37, eff. July 1, 1999; Laws 2000, c. 314, § 4, eff. July 1, 2000; Laws 2004, c. 303, § 2, eff. July 1, 2004; Laws 2005, c. 375, § 1, eff. Nov. 1, 2005.
NOTE: Laws 1994, c. 278, § 5 repealed by Laws 1995, c. 1, § 40, emerg. eff. March 2, 1995. Laws 1995, c. 274, § 52 repealed by Laws 1996, c. 3, § 25, emerg. eff. March 6, 1996.
§68205.1. Municipal sales tax Report of certain information.
A. To determine the actual municipal sales tax liability of any person engaged in any business upon which the Oklahoma excise tax is levied, the Oklahoma Tax Commission, not withstanding the provisions of Section 205 of this title, shall mail not less than quarterly to the governing body of each city or town that levies a municipal sales tax, a notice that the governing body may request the following report from the Commission. Said report shall contain only the following information:
1. A full and complete list of the names and addresses of persons who report doing business during the preceding calendar year within the boundary of the city or town and who have a sales tax permit; and
2. A full and complete list of such persons specified in paragraph 1 of this subsection who are more than sixty (60) days delinquent in remitting sales tax levied pursuant to the provisions of the Oklahoma Sales Tax Code.
B. Upon request by the governing body of a city or town that levies a municipal sales tax, the Oklahoma Tax Commission, notwithstanding the provisions of Section 205 of this title, shall release to such governing body such information or evidence necessary to be used by such body to prosecute violations of municipal sales tax ordinances. Such information or evidence shall include, but is not limited to, the following:
1. Certified copies of sales tax permit applications;
2. Certified copies of sales tax permits;
3. Certified copies of sales tax reports; and
4. Names of Tax Commission employees who may be potential witnesses for municipal prosecution purposes.
C. Except in reporting to the members of the governing body of the city or town, no city or town official or employee shall divulge any information gained from the Oklahoma Tax Commission except that the municipal prosecutor and other municipal enforcement personnel may receive all information necessary to enforce municipal sales tax ordinances.
D. Any city or town official or employee found in violation of this section shall be removed or dismissed from office in the manner provided by law. In addition, any violation of the provisions of this section shall constitute a misdemeanor and shall be punishable by the imposition of a fine not exceeding One Thousand Dollars ($1,000.00) or by imprisonment in the county jail for a term not exceeding one (1) year, or by both said fine and imprisonment.
Amended by Laws 1984, c. 102, § 2, emerg. eff. April 5, 1984; Laws 1985, c. 95, § 1, eff. Jan. 1, 1986; Laws 1986, c. 218, § 4, emerg. eff. June 9, 1986; Laws 1988, c. 281, § 14, operative July 1, 1988.
§68-205.2. Claims by state agencies or district courts against state income tax refunds.
A. A state agency or a district court seeking to collect a debt or final judgment of at least Fifty Dollars ($50.00) from an individual who has filed a state income tax return may file a claim with the Oklahoma Tax Commission requesting that the amount owed to the agency or a district court be deducted from any state income tax refund due to that individual. The claim shall be filed electronically in a form prescribed by the Tax Commission and shall contain information necessary to identify the person owing the debt, including the full name and Social Security number of the debtor.
1. Upon receiving a claim from a state agency or a district court, the Tax Commission shall notify the agency or the district court whether there are funds available to pay the claim. Provided, the Tax Commission need not report available funds of less than Fifty Dollars ($50.00).
2. The state agency or the district court shall send notice to the debtor by regular mail at the last-known address of the debtor as shown by the records of the Tax Commission when seeking to collect a debt not reduced to final judgment. The state agency or the district court shall send notice to the judgment debtor by first class mail at the last-known address of the judgment debtor as shown by the records of the Tax Commission when seeking to collect a final judgment. The notice shall state:
a. that a claim has been filed,
b. the basis for the claim,
c. that such state agency or district court has applied to the Tax Commission for any portion of the tax refund due to the debtor which would satisfy the debt or final judgment in full or in part,
d. that the debtor has the right to contest the claim by sending a written request to the state agency or the district court for a hearing to protest the claim and if the debtor fails to apply for a hearing within sixty (60) days after the receipt of the notice, the debtor shall be deemed to have waived his or her opportunity to contest the claim,
e. that a collection expense of five percent (5%) of the gross proceeds owed to the state agency or district court shall be charged to the debtor and withheld from the refund upon final determination of the debt or final judgment at the hearing or upon failure of the debtor to request a hearing, and
f. if the taxpayer settles the outstanding debt or final judgment with the agency or district court before the sixty (60) days expire, the agency or the district court shall notify the Tax Commission in writing or by electronic media that the claim has been released.
3. In the case of a joint return, the notice shall state:
a. the name of any taxpayer named in the return against whom no debt or final judgment is claimed,
b. the fact that a debt or final judgment is not claimed against the taxpayer,
c. the fact that the taxpayer is entitled to receive a refund if it is due regardless of the debt or final judgment asserted against the debtor,
d. that in order to obtain the refund due, the taxpayer must apply, in writing, for a hearing with the district court or the agency named in the notice within sixty (60) days after the date of the mailing of the notice, and
e. if the taxpayer against whom no debt or final judgment is claimed fails to apply in writing for a hearing within sixty (60) days after the mailing of the notice, the taxpayer shall have waived his or her right to a refund.
B. If the district court or agency asserting the claim receives a written request from the debtor or taxpayer against whom no debt or final judgment is claimed requesting a hearing, the agency or the district court shall grant a hearing according to the provisions of the Administrative Procedures Act, Section 250 et seq. of Title 75 of the Oklahoma Statutes. It shall be determined at the hearing whether the claimed sum is correct or whether an adjustment to the claim shall be made. Pending final determination at the hearing of the validity of the debt or final judgment asserted by the district court or the agency, no action shall be taken in furtherance of the collection of the debt or final judgment. Appeals from actions taken at the hearing shall be in accordance with the provisions of the Administrative Procedures Act.
C. Upon final determination at a hearing, as provided for in subsection B of this section, of the amount of the debt or final judgment or upon failure of the debtor or taxpayer against whom no debt or final judgment is claimed to request such a hearing, the district court or the agency shall submit in the manner prescribed by the Tax Commission notification of the action taken on the claim and a request that the amount owed including the collection expense be deducted from the tax refund due to the debtor and transferred to the district court or the agency. However, if the tax refund due is inadequate to pay the collection expense and debt or final judgment, the balance due the state agency or the district court shall be a continuing debt or final judgment until paid in full.
D. Upon receipt of notification provided in subsection C of this section, the Tax Commission shall:
1. Deduct from the refund five percent (5%) of the gross proceeds owed to the state agency or district court and distribute it by retaining two percent (2%) and transferring three percent (3%) to the district court or the state agency as an expense of collection. The two percent (2%) retained by the Tax Commission shall be deposited in the Oklahoma Tax Commission Fund;
2. Transfer the amount of debt or final judgment or so much thereof as is available to the state agency or the district court;
3. Notify the debtor in writing as to how the refund was applied; and
4. Refund to the debtor any balance remaining after deducting the collection expense and debt or final judgment.
E. The Tax Commission shall deduct from any state tax refund due to a taxpayer the amount of delinquent state tax, and penalty and interest thereon, which such taxpayer owes pursuant to any state tax law prior to payment of such refund.
F. The Tax Commission shall have first priority over all other agencies or district courts when the Tax Commission is collecting a debt or final judgment pursuant to the provisions of this section. Priority in multiple claims by other agencies or district courts pursuant to the provisions of this section shall be in the order in time, in which the Tax Commission receives the claim from the agencies and district courts required by the provisions of subsection A of this section.
G. The Tax Commission shall prescribe or approve forms and promulgate rules and regulations for implementing the provisions of this section.
H. The information obtained by an agency or by the district court from the Tax Commission pursuant to the provisions of this section shall be used only to aid in collection of the debt or final judgment owed to the agency or a district court. Disclosure of the information for any other purpose shall constitute a misdemeanor. Any agency or court employee or person convicted of violating this provision shall be subject to a fine not exceeding One Thousand Dollars ($1,000.00) or imprisonment in the county jail for a term not exceeding one (1) year, or both said fine and imprisonment and, if still employed by the agency or the courts, shall be dismissed from employment.
I. The Tax Commission may employ the procedures provided by this section in order to collect a debt owed to the Internal Revenue Service if the Internal Revenue Service requires such procedure as a condition to providing information to the Commission concerning federal income tax.
J. The provisions of this section shall not apply to claims filed under the provisions of Section 2906 or Section 5011 of this title.
Added by Laws 1983, c. 206, § 1, eff. July 1, 1984. Amended by Laws 1986, c. 269, § 18, operative July 1, 1986; Laws 1989, c. 249, § 6, eff. July 1, 1989; Laws 1992, c. 66, § 4, eff. July 1, 1992; Laws 1994, c. 29, § 1, eff. Sept. 1, 1994; Laws 1996, c. 146, § 1, eff. Nov. 1, 1996; Laws 1997, c. 403, § 20, eff. Nov. 1, 1997; Laws 2003, c. 472, § 3.
NOTE: Laws 1986, c. 218, § 5 repealed by Laws 1989, c. 249, § 49, eff. July 1, 1989.
§68205.3. Claims for collection of child support.
A. For purposes of Section 205.2 of Title 68 of the Oklahoma Statutes, a claim from a state agency shall include a claim filed by the Department of Human Services for the collection of child support and spousal support where authorized for recipients of aid to families with dependent children and for the collection of child support in behalf of any person who has applied for services from the Department of Human Services pursuant to the federal Social Security Act. Such claims shall have priority over claims filed pursuant to Section 205.2 of Title 68 of the Oklahoma Statutes.
B. The Oklahoma Tax Commission is required to provide the Department of Human Services, upon request by the Department, the home address and the Social Security number of the taxpayer.
C. The fee charged for such services of the Tax Commission pursuant to this section shall be Five Dollars ($5.00) or two percent (2%) of the amount actually collected, whichever is greater. D. Upon collection of such monies, the Oklahoma Tax Commission shall transfer the monies to the Department of Human Services. The Department of Human Services shall pay the fees charged by the Commission pursuant to subsection C of this section within sixty (60) days of the date such monies were transferred to the Department.
Added by Laws 1985, c. 297, § 32, operative Oct. 1, 1985.
§68-205.4. Tax incentives - Quantification of costs and benefits - Incentive Review Committee - Contents of review.
A. The Legislature hereby finds that a system to quantify the costs and benefits of existing tax incentives is necessary to determine the achievement of desired objectives in fiscal policy. This system must include a regular and comprehensive review of provisions of state tax incentives. For purposes of this section, "tax incentive" shall include special exclusions, credits, exemptions, or deductions that are not a part of the essential structure of the tax in question and are designed to reduce the tax liability for a special project. A tax incentive shall also include any provision of law that provides direct payment incentives and other measures designed to entice businesses to locate or expand in Oklahoma.
B. There is hereby created an Incentive Review Committee, which shall consist of nine (9) members, three each to be appointed by the Governor, the President Pro Tempore of the Senate and the Speaker of the House of Representatives. Each member shall serve a four-year term and can be reappointed up to three times. The Oklahoma Tax Commission and the Oklahoma Department of Commerce shall provide the staffing needs of the Committee. The Committee shall annually conduct a review of existing tax incentives in an individual tax code and may conduct an in-depth review of the cost and benefits of selected tax incentives. Committee review reports shall be submitted to the Governor, Speaker of the House of Representatives and the President Pro Tempore of the Senate. This review shall include:
1. An identification of the purpose of the tax incentive;
2. A determination of whether the potential revenue impact on the state can be quantified and if so, an estimate of the potential revenue impact on the state;
3. A determination of whether the economic gain to the state can be quantified and if so, an estimate of the economic gain measured in jobs, wages, investments, or other economic criteria;
4. An estimate of the effect on the distribution of the tax burden;
5. An estimate of the number of taxpayers receiving the benefit;
6. A determination of the growth potential of the industry eligible to claim the incentive;
7. A determination of the effectiveness in achieving the desired objective;
8. A determination of whether the tax incentive is the most fiscally effective means of achieving its stated purpose;
9. An analysis of the costs and burdens of administration;
10. An analysis of the competitive position of Oklahoma relative to other states with similar incentives;
11. A determination of the effectiveness of evoking a change in taxpayer behavior; and
12. A public hearing, at which persons receiving the incentives reviewed, or other interested parties, may testify.
Nothing in this section shall preclude the Committee from reviewing incentives outside the tax code selected for the annual review.
Added by Laws 2004, c. 303, § 1, eff. July 1, 2004.
§68206. Examinations or investigations.
(a) In the administration of this article or any state tax law, the Tax Commission may make, or cause to be made by its employees or agents, an examination or investigation of the place of business, the tangible personal property, equipment and facilities, and the books, records, papers, vouchers, accounts and documents of any taxpayer. It shall be the duty of every taxpayer and of every director, officer, agent, or employee of every taxpayer to exhibit to the Tax Commission, or to the employees or agents of such Tax Commission, the place of business, the tangible personal property, equipment and facilities, and the books, records, papers, vouchers, accounts and documents of such taxpayer, and to facilitate any such examination or investigation so far as it may be in his or her power so to do.
(b) When books, records, papers, vouchers, accounts or documents of a taxpayer are in the possession of any person, firm or corporation other than the taxpayer, any member of the Tax Commission may compel by subpoena the production of such books, records, papers, vouchers, accounts or documents by the party in possession for inspection by employees or agents of the Tax Commission. Failure to obey such a subpoena issued pursuant to this subsection shall be punishable in the same manner as provided for in Section 243 of this title.
(c) It shall be lawful for the Tax Commission, or for any employee or agent of the Tax Commission by it designated, to take the oath of any person signing any application, deposition, statement, report or return required by the Tax Commission in the administration of this article or of any state tax law.
Amended by Laws 1985, c. 356, § 2, emerg. eff. July 30, 1985.
§68206.1. Tax Commission Examinations and inspections outside state Compensation and expenses.
When it is deemed advisable by the Oklahoma Tax Commission to examine or inspect the books and records of any taxpayer at a location outside this state, the necessary and reasonable expenses of the Tax Commission or its employees incurred in the examination or inspection shall be reimbursed by the state. Reimbursements for all necessary and reasonable expenses provided for in this section may exceed the limits authorized by the State Travel Reimbursement Act.
Added by Laws 1983, c. 166, § 1, emerg. eff. June 6, 1983. Amended by Laws 1983, c. 275, § 4, emerg. eff. June 24, 1983; Laws 1984, c. 193, § 1, emerg. eff. May 14, 1984; Laws 1998, c. 301, § 1, eff. Nov. 1, 1998.
§68207. Hearings by Tax Commission.
(a) Incidental to the performance of its duties in the administration of this article or any state tax law, any member of the Tax Commission shall have the power to administer oaths, conduct hearings, and compel by subpoena the attendance of witnesses and the production of any books, records, or papers of any person, firm, or corporation. The Tax Commission may examine under oath any taxpayer, and the directors, officers, agents and employees of any taxpayer, as well as all other witnesses, relative to the business of such taxpayer in respect of any matter incident to the administration of this article or any state tax law.
(b) The fees of witnesses required by the Tax Commission to attend any hearing shall be the same as those allowed to witnesses appearing before district courts of this state. Such fees shall be paid in the manner provided for the payment of other expenses incident to the administration of this article or of any state tax law.
(c) Any person desiring a hearing before the Tax Commission shall file an application for such hearing, signed by himself or his duly authorized agent, setting out therein:
(1) A statement of the nature of the tax, the amount thereof in controversy, and the action of the Tax Commission complained of;
(2) A clear and concise assignment of each error alleged to have been committed by the Tax Commission;
(3) The argument and legal authority upon which each assignment of error is made; provided, that the applicant shall not be bound or restricted in such hearing, or on appeal, to the arguments and legal authorities contained and cited in said application;
(4) A statement of the relief sought by the taxpayer;
(5) A statement of the witnesses, so far as such witnesses are then known to the taxpayer, showing their names and addresses, and, if the taxpayer so desires, a request that such witnesses be subpoenaed;
(6) A verification by such person, or his duly authorized agent, that the statements and facts therein contained are true.
(d) If, in such application, the taxpayer shall request an oral hearing, the Tax Commission shall grant such hearing and shall, by written notice, advise the taxpayer of a date, which shall not be less than ten (10) days from the date of mailing such written notice, when such taxpayer may appear before the Tax Commission and present argument and evidence, oral or written. The Tax Commission shall, as soon as practicable thereafter, hold a hearing upon the matter and, pursuant to such hearing, shall, as soon as practicable, make an order confirming, modifying or vacating its prior determination, and shall send to the parties appearing before it at such hearing immediately a copy of such order.
Laws 1965, c. 414, § 2.
§68208. Notice of hearing.
Any notice required by this article, or any state tax law, to be given by the Tax Commission shall be in writing and may be served personally or by mail. If mailed, it shall be addressed to the person to be notified at the last-known address of such person. As used in this article or any other state tax law, "last-known address" shall mean the last address given for such person as it appears on the records of the division of the Tax Commission giving such notice, or if no address appears on the records of that division, the last address given as appears on the records of any other division of the Tax Commission. If no such address appears, the notice shall be mailed to such address as may reasonably be obtainable. The mailing of such notice shall be presumptive evidence of receipt of the same by the person to whom addressed. If the notice has been mailed as provided in this section, failure of the person to receive such notice shall neither invalidate nor be grounds for invalidating any action taken pursuant thereto, nor shall such failure relieve any taxpayer from any tax or addition to tax or any interest or penalties thereon.
Laws 1965, c. 414, § 2, emerg. eff. July 7, 1965; Laws 1989, c. 249, § 7, eff. July 1, 1989; Laws 1993, c. 146, § 6.
§68209. Notice to Commission's attorney before judicial hearing Costs.
No court of this state shall hear or try any case in which the Tax Commission is a party plaintiff, defendant or intervener, until it has been made to appear to said court that notice of the time and place of said hearing has been given by registered or certified mail, for at least ten (10) days, to the attorney of the Tax Commission. Such notice shall be given by the court clerk and the cost thereof taxed as court costs in the case.
Laws 1965, c. 414, § 2.
§68-210. Bonds.
(a) Any bond required to be filed to protect the State of Oklahoma under this article or any state tax law must be approved by the Tax Commission and shall be in such form and amount as such tax law shall require, or, in the absence of a specific requirement, in such amount as the Tax Commission may require, and shall be signed as surety by a surety company authorized to transact business in this state, or in lieu of such surety bond, there may be filed negotiable bonds or other obligations of the United States or of the State of Oklahoma of an actual market value not less than the amount fixed by such law or by the Tax Commission.
(b) Notwithstanding the limitation as to the amount of any bond fixed by any tax law requiring a bond, if a taxpayer:
1. Becomes delinquent in the payment of any tax;
2. Tenders a check in payment of a tax which check is returned unpaid because of insufficient funds; or
3. Is unable to furnish a financial statement that, in the judgment of the Tax Commission, indicates ability to properly discharge his liability for the tax currently accruing against such taxpayer;
then, in any of such events, the Tax Commission shall demand an additional bond of such taxpayer in an amount necessary, in the judgment of the Tax Commission, to protect the revenue of the State. Provided, that the penal sum of the additional bond and the bond furnished under the provisions of the law requiring such bond, may not, in total amount, exceed three (3) months' tax liability.
(c) If any bond or other instrument filed to protect the State of Oklahoma under this article or any state tax law is revoked or canceled by the issuer thereof, such issuer shall provide notice of such revocation or cancellation to the Oklahoma Tax Commission by certified mail.
Added by Laws 1965, c. 414, § 2, emerg. eff. July 7, 1965. Amended by Laws 1994, c. 278, § 6, eff. Sept. 1, 1994.
§68211. Return of deposited money or securities to taxpayer.
When, to secure compliance with the provisions of this article or any other State tax law, money or securities have been deposited with the Tax Commission, and the Tax Commission is satisfied that the taxpayer has complied with all tax laws and has, through independent payment or through authorization granted by the taxpayer to the Tax Commission to satisfy such tax indebtedness out of the money or securities deposited, paid all taxes due the State, then the Tax Commission shall return to the owner all or such part of the deposited money or securities as remains after the liquidation of taxpayer's tax liability.
If such money or securities have by the Tax Commission been deposited with the State Treasurer, then the Tax Commission shall, under the circumstances above stated, notify the Treasurer that the money or securities, or such part as the Tax Commission shall direct, should be returned to the owner.
Laws 1965, c. 414, § 2.
§68212. Cancellation or refusal of license or permit.
(a) The Tax Commission is authorized to cancel or to refuse the issuance, extension or reinstatement of any license, permit or duplicate copy thereof, under the provisions of any state tax law or other law, to any person, firm, or corporation who shall be guilty of:
(1) Violation of any of the provisions of this article;
(2) Violation of the provisions of any state tax law;
(3) Violation of the rules and regulations promulgated by the Tax Commission for the administration and enforcement of any state tax law, or
(4) Failure to observe or fulfill the conditions upon which the license or permit was issued, or
(5) Nonpayment of any delinquent tax or penalty.
(b) Before any license, permit or duplicate copy thereof may be canceled, or the issuance, reinstatement, or extension thereof refused, the Tax Commission shall give the owner of such license or permit, or applicant therefor, twenty (20) days' notice by registered mail or certified mail with return receipt requested, of a hearing before said Tax Commission, granting said person an opportunity to show cause why such action should not be taken. If the notice has been mailed as required by this section, failure of the person to have received actual notice of the hearing shall neither invalidate nor be grounds for invalidating any action taken at the hearing or pursuant to the hearing.
(c) Upon the cancellation of any license, permit, or duplicate copy thereof by the Tax Commission, all accrued taxes and penalties, although said taxes and penalties are not, at the time of the cancellation, due and payable under the terms of the state tax law imposing or levying such tax or taxes, shall become due and payable concurrently with the cancellation of such license, permit or duplicate copy thereof, and the licensee or permittee shall forthwith make a report covering the period of time not covered by preceding reports filed by said person and ending with the date of the cancellation and shall pay all such taxes and penalties.
(d) The Tax Commission may enter its order temporarily suspending any license, permit or duplicate copy thereof pending a final hearing before it on the subject of the cancellation of such license, permit or duplicate copy thereof, and may give notice of such temporary suspension at the same time that notice of its intention to cancel any license, permit or duplicate copy or to refuse the issuance, reinstatement or extension thereof is given, as provided by this section. After being given notice of any such order of suspension, it shall be unlawful for any person to continue to operate his business under any such suspended license, permit or duplicate copy thereof, and in the event any such person shall continue or threaten to continue such unlawful operations after having received proper notice of the suspension of his license, permit or duplicate copy thereof, upon complaint of the Tax Commission such person shall be enjoined from further operating or conducting such unlawful business pending final hearing by the Tax Commission. In all cases where injunction proceedings are brought under this article, the Commission shall not be required to furnish bond, and where notice of suspension of any license, permit or duplicate copy thereof has been given in accordance with the provisions of this section, no further notice shall be required before the issuance of a temporary restraining order.
Laws 1965, c. 414, § 2.
§68213. Notice to taxpayer on final determination of tax liability when security on file Forfeiture of bond and collection of amount due.
Where, as security for the payment of any state tax, the taxpayer has filed with the Tax Commission a bond, the Tax Commission shall, as soon as the tax has been finally determined to be due and payable, notify the taxpayer and his surety or sureties of such fact by sending to each of them, addressed to their respective post office addresses last known to the Tax Commission, a letter by registered or certified mail with return receipt requested.
If, within thirty (30) days after the mailing of such notice the amount due remains unpaid, the bond posted shall be forfeited and the Tax Commission shall proceed to collect the amount due thereunder, together with any penalties and costs incident thereto. It shall not be necessary to make the delinquent taxpayer a party to any suit that may be brought against his surety or sureties.
Laws 1965, c. 414, § 2.
§68214. Release of property from lien Execution and recording.
The Oklahoma Tax Commission may release any property from the lien of any warrant, certificate, judgment, or levy procured by it; provided, payment shall be made to the Tax Commission of such sum as it shall deem adequate consideration for such release, or a deposit shall be made with the Tax Commission of such security as it shall deem adequate to secure the payment of any debt evidenced by any such warrant, certificate, judgment, or levy, the lien of which is sought to be released. Provided further, however, the Tax Commission shall issue such releases without the payment of any consideration in cases where it determines that its warrant, certificate or judgment is clouding the title of such property by reason of error in the description of properties or similarity of names. Such release shall be filed in the office of the county clerk in which the lien is filed or same shall be recorded in any office in which conveyances of real estate may be recorded. Such release may be filed in the appropriate office of the county clerk by the taxpayer or by the Tax Commission. If such release is filed by the Tax Commission, the Tax Commission shall collect the filing fee, as authorized by statute, along with the other consideration for the release. The Tax Commission may file the release in the appropriate office of the county clerk by electronic means. Upon collection of the filing fees, the Tax Commission shall transmit the revenue to the State Treasurer to be deposited in the Oklahoma Tax Commission Fund. The revenue from the fees collected shall be remitted monthly by the Tax Commission to the appropriate county treasurers to be deposited in the appropriate fund of the county clerk's department.
Added by Laws 1965, c. 414, § 2, emerg. eff. July 7, 1965. Amended by Laws 1986, c. 218, § 6, emerg. eff. June 9, 1986; Laws 1993, c. 146, § 7; Laws 2003, c. 472, § 4.
§68215. Collection of taxes, penalties, in same manner as personal debt.
(a) The taxes, fees, interest, and penalties imposed or levied by any State tax law, or by this article, from the time the same shall become due, may be collected in the same manner as a personal debt of the taxpayer to the State of Oklahoma, recoverable in any court of competent jurisdiction in any action in the name of the State of Oklahoma, on relation of the Oklahoma Tax Commission. Such suit may be maintained and prosecuted, and all proceedings taken, to the same effect and extent as for the enforcement of a right of action for debt. All provisional remedies available in such actions shall be, and are hereby made, available to the State of Oklahoma in the enforcement of the payment of any state tax.
(b) The proceeds of any judgment or order obtained hereunder shall be paid to the Tax Commission.
Laws 1965, c. 414, § 2.
§68-216. Extension of time for filing return.
The Tax Commission, whenever in its judgment good cause exists and pursuant to written request, may grant a reasonable extension for the filing of any return required under any state tax law. The Tax Commission shall keep a record of every extension granted with the reason therefor. Except in the case of corporation income or franchise tax returns, if franchise tax returns are filed at the same time as the corporate income tax return, the time for filing any return may not extend in the aggregate later than one-half (1/2) the period of time for which any such return is filed under the particular state tax law involved nor may any such extension extend the date on which any payment of a state tax is due. An extension not to exceed seven (7) months for the filing of corporation income or franchise tax returns, if franchise tax returns are filed at the same time as the corporate income tax return, shall be allowed. Any extension granted for the corporate income tax return shall be deemed to cover the filing of a franchise tax return if a taxpayer elects to file the franchise tax return at the same time as the corporate income tax return. An extension shall not extend the date for payment of the state income or franchise tax due. In case an extension is granted, the taxpayer may file a tentative return on or before the date when the return is required by any state tax law showing the estimated amount of tax for the period covered by the return and may pay the estimated tax or the first installment thereof at the time of filing such tentative return and no interest or penalty shall attach or be payable on sums so paid in due course.
Added by Laws 1965, c. 414, § 2, emerg. eff. July 7, 1965. Amended by Laws 1983, c. 275, § 5, emerg. eff. June 24, 1983; Laws 1997, c. 249, § 1, eff. Sept. 1, 1998.
§68-216.1. Repealed by Laws 1999, c. 390, § 16, emerg. eff. June 8, 1999.
§68-216.2. Tax amnesty program.
For the purpose of encouraging the voluntary disclosure and payment of taxes owed to this state, the Oklahoma Tax Commission is hereby authorized and directed to establish a tax amnesty program during which penalties and one-half interest due on delinquent taxes assessed by the Tax Commission and imposed pursuant to the provisions of Title 68 of the Oklahoma Statutes and the Oklahoma Alcoholic Beverage Control Act shall be waived, except as provided herein. The amnesty program shall not include any penalties or interest that may have been assessed pursuant to the Ad Valorem Tax Code or the Motor Vehicle Excise Tax Code or penalties or interest assessed by an agency other than the Tax Commission. A taxpayer shall be entitled to a waiver of penalty and one-half interest due on taxes which are delinquent prior to August 15, 2002, if the taxpayer voluntarily files delinquent tax returns and pays the taxes and remaining interest due during the amnesty period. The amnesty period shall extend from August 15, 2002, through November 15, 2002. The waiver of penalties and one-half interest shall apply to:
1. The under-reporting of tax liabilities;
2. The nonpayment of taxes; and
3. The nonreporting of tax liabilities.
The Tax Commission shall promulgate rules detailing the terms and other conditions of this program.
The Tax Commission is authorized to expend necessary available funds to publicly advertise this program and shall be exempt from the provisions of Section 85.7 of Title 74 for the purpose of implementing this section.
Added by Laws 2002, c. 458, § 3, eff. July 1, 2002.
§68-217. Interest and penalties.
A. If any amount of tax imposed or levied by any state tax law, or any part of such amount, is not paid before such tax becomes delinquent, there shall be collected on the total delinquent tax interest at the rate of one and one-quarter percent (1 1/4%) per month from the date of the delinquency until paid.
B. Interest upon any amount of state tax determined as a deficiency, under the provisions of Section 221 of this title, shall be assessed at the same time as the deficiency and shall be paid upon notice and demand of the Oklahoma Tax Commission at the rate of one and one-quarter percent (1 1/4%) per month from the date prescribed in the state tax law levying such tax for the payment thereof to the date the deficiency is assessed.
C. If any tax due under state sales, use, tourism, mixed beverage gross receipts, or motor fuel tax laws, or any part thereof, is not paid within fifteen (15) days after such tax becomes delinquent a penalty of ten percent (10%) on the total amount of tax due and delinquent shall be added thereto, collected and paid. However, the Tax Commission shall not collect the penalty assessed if the taxpayer remits the tax within thirty (30) days of the mailing of a proposed assessment or voluntarily pays the tax upon the filing of an amended return.
D. If any tax due under any state tax law other than those specified in subsection C of this section, or any part thereof, is not paid within thirty (30) days after such tax becomes delinquent a penalty of ten percent (10%) on the total amount of tax due and delinquent shall be added thereto, collected and paid. However, the Tax Commission shall not collect the penalty assessed if the taxpayer remits the tax and interest within sixty (60) days of the mailing of a proposed assessment or voluntarily pays the tax upon the filing of an amended return.
E. If any part of any deficiency, arbitrary or jeopardy assessment made by the Tax Commission is based upon or occasioned by the taxpayer's negligence or by the failure or refusal of any taxpayer to file with the Tax Commission any report or return, as required by this title, or by any state tax law, within ten (10) days after a written demand for such report or return has been served upon any taxpayer by the Tax Commission by letter, the Tax Commission may assess and collect, as a penalty, twenty-five percent (25%) of the amount of the assessment. For purposes of this subsection, "negligence" shall mean the consistent understatement of income, consistent understatement of receipts or a system of recordkeeping by the taxpayer that consistently results in an inaccurate reporting of tax liability.
F. If any part of any deficiency is due to fraud with intent to evade tax, then fifty percent (50%) of the total amount of the deficiency, in addition to such deficiency, including interest as herein provided, shall be added, collected and paid.
G. All penalties or interest imposed by this title, or any state tax law, shall be recoverable by the Tax Commission as a part of the tax with respect to which they are imposed, the penalties bearing interest as provided in this section for the tax, and all penalties and interest shall be apportioned as provided for the apportionment of the tax on which such penalties or interest are collected.
H. Whenever an income tax refund is not paid to the taxpayer within ninety (90) days after the return is filed or due, whichever is later, with all documents as required by the Tax Commission, entitling the taxpayer to a refund, then the Tax Commission shall pay interest on the refund, at the same rate specified for interest on delinquent tax payments. The payment of interest on refunds provided for by this section shall apply to tax year 1987 and subsequent tax years. The Tax Commission shall not be required to pay interest on an income tax refund which is applied, in whole or in part, to a prior year tax liability pursuant to Section 2385.17 of this title or upon an income tax refund applied, in whole or in part, to satisfy a debt owed to the Internal Revenue Service of the United States or to a state agency, including the Oklahoma Tax Commission, as provided by Section 205.2 of this title.
For tax returns filed after January 1, 2004, whenever an income tax refund is not paid to the taxpayer within the following number of days after the income tax return is filed with all documents as required by the Tax Commission or after the income tax return is due, whichever is later, entitling the taxpayer to a refund, then the Tax Commission shall pay interest on the refund at the same rate specified for interest on delinquent tax payments:
1. For returns filed electronically, thirty (30) days; and
2. For all other returns, one hundred fifty (150) days.
Added by Laws 1965, c. 414, § 2, emerg. eff. July 7, 1965. Amended by Laws 1983, c. 13, § 1, emerg. eff. March 23, 1983; Laws 1988, c. 87, § 1, operative July 1, 1988; Laws 1988, c. 204, § 9, operative July 1, 1988; Laws 1989, c. 249, § 9, eff. July 1, 1989; Laws 1990, c. 339, § 12, eff. July 1, 1990; Laws 1991, c. 342, § 8, emerg. eff. June 15, 1991; Laws 1993, c. 146, § 8; Laws 1998, c. 385, § 2, eff. Nov. 1, 1998; Laws 2003, c. 472, § 5; Laws 2004, c. 535, § 1, eff. Nov. 1, 2004.
§68218. Remittance for taxes Dishonored checks.
A. All remittances of taxes and fees under any state tax law or this Code, shall be made payable to the Oklahoma Tax Commission, at Oklahoma City, Oklahoma, by bank draft, check, cashier's check, money order, money, or nationally recognized credit or debit card. The Tax Commission shall issue its receipt for cash or money payment to the taxpayer. If payment is made by a credit or debit card, the Oklahoma Tax Commission may add an amount equal to the amount of the service charge incurred, not to exceed four percent (4%) of the amount of such payment as a service charge for the acceptance of such card. For purposes of this paragraph, "nationally recognized credit or debit card" means any instrument or device, whether known as a credit card, credit plate, charge plate, debit card, or by any other name, issued with or without fee by an issuer for the use of the cardholder in obtaining goods, services or anything of value on credit which is accepted by over one thousand merchants in this state. The Oklahoma Tax Commission shall determine which nationally recognized cards will be accepted. However, the Oklahoma Tax Commission must ensure that no loss of state revenue will occur by the use of such card. The Oklahoma Tax Commission shall promulgate rules to allow for the orderly implementation of payment by credit or debit cards.
B. No remittance other than cash shall be final discharge of liability due the Tax Commission unless and until it shall have been paid in cash. All money collected shall be deposited with the State Treasurer to be distributed as provided by the state tax law under which the tax was levied.
C. There shall be assessed, in addition to any other penalties provided for by law, an administrative service fee of Twentyfive Dollars ($25.00) for each check returned to the Tax Commission or any agent thereof by reason of the refusal of the bank upon which such check was drawn to honor the same. However, the fee provided in this subsection shall not be assessed for any check returned because of "insufficient funds" unless the check has been presented to the bank two times and payment declined by the bank.
D. Upon the return of any check by reason of the refusal of the bank upon which such check was drawn to honor the same, the Tax Commission may file a bogus check complaint with the appropriate district attorney who shall refer the complaint to the Bogus Check Restitution Program established by Section 111 of Title 22 of the Oklahoma Statutes. Funds collected through the program after collection of the fee authorized by Section 114 of Title 22 of the Oklahoma Statutes for deposit in the Bogus Check Restitution Program Fund in the county treasury shall be transmitted to the Tax Commission and credited to the tax liability for which the returned check was drawn and to the administrative service fee provided by this section.
E. Any remittances for registration fees, license plates or decals or excise taxes as required by the provisions of the Oklahoma Vehicle License and Registration Act and Sections 2101 through 2110 of this title may be paid by a nationally recognized credit card pursuant to the provisions of Section 1144 of Title 47 of the Oklahoma Statutes.
Laws 1965, c. 414, § 2, emerg. eff. July 7, 1965; Laws 1968, c. 50, § 1, emerg. eff. March 18, 1968; Laws 1985, c. 179, § 69, operative July 1, 1985; Laws 1985, c. 356, § 3, emerg. eff. July 30, 1985; Laws 1986, c. 218, § 7, emerg. eff. June 9, 1986; Laws 1989, c. 284, § 4, emerg. eff. May 22, 1989; Laws 1991, c. 75, § 2, eff. Sept. 1, 1991; Laws 1993, c. 146, § 9.
§68-218.1. False or bogus check - Penalties.
A. Any person who shall knowingly give a false or bogus check, as defined in this section, of a value less than Five Hundred Dollars ($500.00) in payment or remittance of any taxes, fees, penalties, or interest levied pursuant to any state tax law shall be, upon conviction, guilty of a misdemeanor punishable by a fine not to exceed One Thousand Dollars ($1,000.00), or by imprisonment in the county jail for a term of not more than one (1) year, or by both such fine and imprisonment. If the value of the false or bogus check referred to in this subsection is Five Hundred Dollars ($500.00) or more, such person shall be, upon conviction, guilty of a felony punishable by a fine not to exceed Five Thousand Dollars ($5,000.00) or by imprisonment in the State Penitentiary for a term of not more than ten (10) years or by both such fine and imprisonment.
B. Any person who shall knowingly give two or more false or bogus checks, the total sum of which is Five Hundred Dollars ($500.00) or more, even though each separate instrument is written for less than Five Hundred Dollars ($500.00), in payment or remittance of any taxes, fees, penalties, or interest levied pursuant to any state tax law shall be, upon conviction, guilty of a felony punishable by a fine not to exceed Five Thousand Dollars ($5,000.00) or by imprisonment in the State Penitentiary for a term of not more than ten (10) years, or by both such fine and imprisonment.
C. For purposes of this section, the term "false or bogus check or checks" shall include any check or order which is not honored on account of insufficient funds of the maker to pay same, or because the check or order was drawn on a closed account or on a nonexistent account. The making, drawing, uttering or delivering of a check or order, the payment of which is refused by the drawee, shall be prima facie evidence of the knowledge of insufficient funds, a closed account, or a nonexistent account with such bank or other depository drawee. Said term shall not include any check or order not honored on account of insufficient funds if the maker or drawer shall pay the drawee thereof the amount due within five (5) days from the date the same is presented for payment nor any check or order that is not presented for payment within thirty (30) days after same is delivered and accepted.
Added by Laws 1986, c. 218, § 8, emerg. eff. June 9, 1986. Amended by Laws 1997, c. 133, § 551, eff. July 1, 1999; Laws 1999, 1st Ex.Sess., c. 5, § 401, eff. July 1, 1999; Laws 2001, c. 437, § 32, eff. July 1, 2001.
NOTE: Laws 1998, 1st Ex.Sess., c. 2, § 23 amended the effective date of Laws 1997, c. 133, § 551 from July 1, 1998, to July 1, 1999.
§68-219. Compounding, settlement or compromise of controversies, judicial approval in certain cases.
The Oklahoma Tax Commission is authorized to enter into an agreement to compound, settle or compromise any controversy relating to taxes collectible by the Tax Commission, or any admitted or established tax liability as to any tax collectible under any State Law in the following cases:
(1) In cases of controversy arising over the amount of tax due, or,
(2) In case of inability to pay, resulting from insolvency of the taxpayer.
In any case where the amount of any tax liability which has been admitted or established exceeds Ten Thousand Dollars ($10,000.00), no agreement to compound, settle or compromise such tax liability shall be effective until the settlement thereof shall have been approved by judgment of one of the judges of the district court of Oklahoma County, after a full hearing thereon.
Laws 1965, c. 414, § 2, emerg. eff. July 7, 1965; Laws 2005, c. 362, § 1, eff. Nov. 1, 2005.
§68-219.1. Abatement of tax liability and interest and penalties accruing thereto - Settlement agreement - Considerations.
A. In accordance with the provisions of the amendment to Section 5 of Article X of the Oklahoma Constitution as set forth in Senate Joint Resolution No. 32 of the 2nd Session of the 48th Oklahoma Legislature, the Oklahoma Tax Commission is hereby authorized to abate all or any portion of tax liability and interest and penalties accruing thereto, pursuant to a settlement agreement entered into with a taxpayer, if the Tax Commission finds, by clear and convincing evidence, that:
1. Collection of the tax liability and interest and penalties accruing thereto would reasonably result in the taxpayer declaring bankruptcy;
2. The tax is uncollectible due to insolvency of the taxpayer resulting from factors beyond the control of the taxpayer or for other similar cause beyond the control of the taxpayer;
3. The tax liability is attributable to actions of a person other than the taxpayer and it would be inequitable to hold the taxpayer liable for the tax liability; or
4. In cases of nonpayment of trust fund taxes, the taxes were not collected by the taxpayer from its customer and the taxpayer had a good faith belief that collection of the taxes was not required.
B. The Tax Commission may consider the following circumstances, in addition to any other aggravating or mitigating circumstances, in determining whether or not to enter into an agreement pursuant to the provisions of this section:
1. Whether the taxpayer has made efforts in good faith to comply with the tax laws of this state;
2. Whether the taxpayer has benefited from nonpayment of the tax; and
3. Involvement of the taxpayer in economic activity from which the tax liability originated.
C. All agreements entered into pursuant to the provisions of this section shall provide for the collection of all or a portion of the tax liability if at all possible, and in all cases collection of the tax liability shall take precedence over collection of interest and penalties.
D. Any abatement of tax liability authorized by this section shall only be granted by a unanimous vote of the members of the Tax Commission. The decision of the members of the Tax Commission in denying the abatement of any tax liability pursuant to this section shall be final and no right of appeal to any court may be taken from such decision.
E. In any case where the amount of tax liability to be abated pursuant to an agreement entered into pursuant to the provisions of this section exceeds Ten Thousand Dollars ($10,000.00), the agreement shall not become effective until it shall have been approved by one of the judges of the district court of Oklahoma County, after a full hearing thereon. Such judge shall be assigned to the matter by the chief judge on a rotating basis.
F. The provisions of this section shall not be construed to grant any legal right to any taxpayer for the abatement of any tax liability. A decision to grant abatement of tax liability pursuant to the provisions of this section shall be a discretionary act within the authority of the members of the Tax Commission.
G. No appointed or elected official shall be eligible to seek relief pursuant to any of the provisions of this section.
H. The Tax Commission shall promulgate rules to implement the provisions of this section.
Added by Laws 2002, c. 162, § 1, emerg. eff. April 30, 2002. Amended by Laws 2005, c. 362, § 2, eff. Nov. 1, 2005.
§68-220. Waiver or remission of interest or penalties.
A. The interest or penalty or any portion thereof ordinarily accruing by reason of a taxpayer's failure to file a report or return or failure to file a report or return in the correct form as required by any state tax law or by this Code or to pay a state tax within the statutory period allowed for its payment may be waived or remitted by the Oklahoma Tax Commission or its designee provided the taxpayer's failure to file a report or return or to pay the tax is satisfactorily explained to the Tax Commission or such designee, or provided such failure has resulted from a mistake by the taxpayer of either the law or the facts subjecting him to such tax, or inability to pay such interest or penalty resulting from insolvency.
B. The waiver or remission of all or any part of any such interest or penalties in excess of Ten Thousand Dollars ($10,000.00) shall not become effective unless approved by one of the judges of the district court of Oklahoma County after a full hearing thereon.
The application for the approval of such waiver or remission shall be filed in the office of the court clerk of the court at least twenty (20) days prior to the entry of the order of the judge finally approving or disapproving the waiver or remission. The order so entered shall be a final order of the district court of the county.
Added by Laws 1965, c. 414, § 2, emerg. eff. July 7, 1965. Amended by Laws 1989, c. 249, § 10, eff. July 1, 1989; Laws 1993, c. 146, § 10; Laws 1997, c. 294, § 9, eff. July 1, 1997; Laws 2005, c. 362, § 3, eff. Nov. 1, 2005.
§68-221. Reports or returns by taxpayer.
A. If any taxpayer shall fail to make any report or return as required by any state tax law, the Oklahoma Tax Commission, from any information in its possession or obtainable by it, may determine the correct amount of tax for the taxable period. If a report or return has been filed, the Tax Commission shall examine such report or return and make such audit or investigation as it may deem necessary. If, in cases where no report or return has been filed, the Tax Commission determines that there is a tax due for the taxable period, or if, in cases where a report or return has been filed, the Tax Commission shall determine that the tax disclosed by such report or return is less than the tax disclosed by its examination, it shall in writing propose the assessment of taxes or additional taxes, as the case may be, and shall mail a copy of the proposed assessment to the taxpayer at the taxpayer's lastknown address. Proposed assessments made in the name of the "Oklahoma Tax Commission" by its authorized agents shall be considered as the action of the Tax Commission.
B. Any assessment, correction or adjustment made as a result of an office audit shall be presumed to be the result of an audit of the report or return only, and such office audit shall not be deemed a verification of any item in the report or return unless the item shall have been made the subject of a hearing before the Tax Commission, and the correctness and amount of such item determined at such hearing; and such office audit shall not preclude the Tax Commission from subsequently making further adjustment, correction or assessment as a result of a field audit of the books and records of the taxpayer, wherever located, or upon disclosures from any source other than the return. In cases where no report or return has been filed, the assessment of the tax on any information available shall in no event preclude the assessment at any time on subsequently disclosed information.
C. Within sixty (60) days after the mailing of the aforesaid proposed assessment, the taxpayer may file with the Tax Commission a written protest under oath, signed by the taxpayer or the taxpayer's duly authorized agent, setting out therein:
1. A statement of the amount of deficiency as determined by the Tax Commission, the nature of the tax and the amount thereof in controversy;
2. A clear and concise assignment of each error alleged to have been committed by the Tax Commission;
3. The argument and legal authority upon which each assignment of error is made; provided, that the applicant shall not be bound or restricted in such hearing, or on appeal, to the arguments and legal authorities contained and cited in the application;
4. A statement of relief sought by the taxpayer; and
5. A verification by the taxpayer or the taxpayer's duly authorized agent that the statements and facts contained therein are true.
D. If in such written protest the taxpayer shall request an oral hearing, the Tax Commission shall grant such hearing, and shall, by written notice, advise the taxpayer of a date, which shall not be less than ten (10) days from the date of mailing of such written notice, when such taxpayer may appear before the Tax Commission and present arguments and evidence, oral or written, in support of the protest. Hearings shall be held as soon as practicable. In the event an oral hearing is not requested, the Tax Commission shall proceed without further notice to examine into the merits of the protest and enter an order in accordance with its findings. Upon request of any taxpayer and upon proper showing that the principle of law involved in the assessment of any tax is already pending before the courts for judicial determination, the taxpayer, upon agreement to abide by the decision of the court, may pay the tax so assessed under protest and such protest shall be resolved in accordance with the agreement to abide.
E. If the taxpayer fails to file a written protest within the sixty-day period herein provided for or within the period as extended by the Tax Commission, or if the taxpayer fails to file the notice required by Section 226 of this title within thirty (30) days from the date of mailing of an assessment, then the proposed assessment, without further action of the Tax Commission, shall become final and absolute. A taxpayer who fails to file a protest to an assessment of taxes within the time period prescribed by this section may, within one (1) year of the date the assessment becomes final, request the Tax Commission to adjust or abate the assessment if the taxpayer can demonstrate, by a preponderance of the evidence, that the assessment or some portion thereof is clearly erroneous. If the Tax Commission determines that the proper showing has been made, the assessment or portion thereof determined to be clearly erroneous shall be deemed not to have become final and absolute. No hearing to adjust or abate a clearly erroneous assessment may be granted after the Tax Commission's denial of such a request. An order of the Tax Commission denying a taxpayer's request to adjust or abate an assessment alleged to be clearly erroneous is not an appealable order under Section 225 of this title. No proceeding instituted by the Tax Commission to collect a tax liability may be stayed because of a request made by a taxpayer to adjust or abate an assessment alleged to be clearly erroneous.
F. The Tax Commission may in its discretion extend the time for filing a protest for any period of time not to exceed an additional ninety (90) days. Any extension granted shall not extend the period of time within which the notice required by Section 226 of this title may be filed.
G. Within a reasonable time after the hearing herein provided for, the Tax Commission shall make and enter an order in writing in which it shall set forth the disposition made of the protest and a copy of such order shall forthwith be mailed to the taxpayer. The order shall contain findings of fact and conclusions of law. After removing the identity of the taxpayer, the Tax Commission shall make the order available for public inspection and shall publish those orders the Tax Commission deems to be of precedential value. The taxpayer may within the time and in the manner provided for by Section 225 of this title, appeal to the Supreme Court, but in the event the taxpayer fails to so proceed, the order shall within thirty (30) days from the date a certified copy thereof is mailed to the taxpayer, become final. The provisions of Section 226 of this title shall not apply where a proposed assessment or an assessment of taxes has been permitted to become final.
H. In all instances where the proposed assessment or the assessment of taxes or additional taxes has been permitted to become final, a certified copy of the assessment may be filed in the office of the county clerk of any county in this state, and upon being so filed, the county clerk shall enter same upon the judgment docket in the same manner as provided for in connection with judgments of district courts. When an assessment is so filed and docketed, it shall have the same force and be subject to the same law as a judgment of the district court, and accordingly it shall constitute a lien on any real estate of the taxpayer located in the county wherein filed; and execution may issue and proceedings in aid of execution may be had the same as on judgments of district courts. Such lien is hereby released and extinguished upon the payment of such assessment, or, except as otherwise provided herein, upon the expiration of ten (10) years after the date upon which the assessment was filed in the office of the county clerk; provided, the Tax Commission may, prior to the release and extinguishment of such lien, refile the assessment one time in the office of the county clerk. An assessment so refiled shall continue the lien until payment of the assessment, or upon the expiration of ten (10) years after the date upon which the assessment was refiled in the office of the county clerk. The remedies provided in this subsection shall be in addition to other remedies provided by law. All active liens evidenced by an assessment filed with a county clerk's office prior to November 1, 1989, shall be released and extinguished if the assessment is not refiled prior to November 1, 2001.
I. In order to make more definite the intention of the Legislature in connection with the applicability or lack of applicability of the refund provisions of the tax statutes to those treating with proposed assessments and assessments that have become final, the Legislature being cognizant of the fact that such intent has been questioned, it is declared to be the intent of the Legislature that the refund provisions shall be without application to taxes where the amount thereof has been determined by an assessment, other than an assessment designated as an "office audit", that has become final.
Added by Laws 1965, c. 414, § 2, emerg. eff. July 7, 1965. Amended by Laws 1987, c. 236, § 199, emerg. eff. July 20, 1987; Laws 1989, c. 249, § 11, eff. July 1, 1989; Laws 1999, c. 407, § 1, eff. Nov. 1, 1999; Laws 2002, c. 458, § 1, eff. July 1, 2002.
§68-221.1. Date of postmark deemed to be date of delivery or of payment.
A. For any return, claim, statement, or other document required to be filed or any payment required to be made within a prescribed period or on or before a prescribed date under authority of any provision of a tax law of this state, the date of the postmark stamped on the cover in which the return, claim, statement, or other document or payment is mailed shall be deemed to be the date of delivery or the date of payment, as the case may be.
B. The provisions of this section shall apply only if:
1. The postmark date falls within the prescribed period or on or before the prescribed date for filing, including any extension, of the return, claim, statement, or other document or for making payment, including any extension granted for making such payment; and
2. The return, claim, statement, or other document or payment was, within the prescribed period or on or before the prescribed date for filing, deposited in the mail in the United States in an envelope or other appropriate wrapper, postage prepaid, properly addressed to the Oklahoma Tax Commission, agency, officer, or office with which the return, claim, statement, or other document is required to be filed, or to which the payment is required to be made.
C. The provisions of this section shall apply in the case of postmarks not made by the United States Postal Service only and to the extent provided by rules or regulations prescribed by the Tax Commission.
D. For purposes of this section, if any return, claim, statement, or other document or payment, is sent by United States registered mail, the registration shall be prima facie evidence that the return, claim, statement, or other document was delivered to the Tax Commission, agency, officer, or office to which addressed, and the date of registration shall be deemed the postmark date. The Tax Commission is authorized to provide by rules or regulations the extent to which the foregoing provisions of this subsection with respect to prima facie evidence of delivery and the postmark date shall apply to certified mail.
E. The provisions of this section shall not apply with respect to the filing of a document in, or the making of payment to, any court, or to currency or other medium of payment unless actually received and accounted for, or returns, claims, statements or other documents or payments which are required under any provision of a tax law or rules of this state to be delivered by any method other than by mailing.
F. Any reference in this section to the United States mail shall be treated as including a reference to any designated delivery service, and any reference in this section to a postmark by the United States Postal Service shall be treated as including a reference to any date recorded or marked as described in this subsection by a designated delivery service. For purposes of this section, the term "designated delivery service" means a delivery service provided by a trade or business if the service is designated by a rule of the Tax Commission for purposes of this section. The Tax Commission may designate a delivery service under the preceding sentence only if the Tax Commission determines that the service is available to the general public, is at least as timely and reliable on a regular basis as the United States mail, records electronically to its data base kept in the regular course of its business or marks on the cover in which any item referred to in this section is to be delivered, the date on which the item was given to the service for delivery, and meets all other criteria prescribed by the Tax Commission. The Tax Commission may provide a rule similar to the rule stated in the first sentence of this subsection with respect to any service provided by a designated delivery service which is substantially equivalent to United States registered or certified mail.
Added by Laws 1999, c. 293, § 25, eff. Nov. 1, 1999.
§68222. Procedure on default of taxpayer in enumerated matters.
(a) If any taxpayer shall fail or refuse to make any report or return as required by any state tax law, or shall fail or refuse to permit an examination of its books, records or papers, or to appear and answer questions within the scope of such investigation relating to any state tax, the Tax Commission may apply to the district court of the county wherein the taxpayer resides, or to any judge thereof, for an order requiring such taxpayer to make such report or return, or requiring the taxpayer, his agents or employees, to appear to answer such questions or permit such examination; and the court, or any Judge thereof, shall thereupon issue an order, upon such reasonable notice as shall be prescribed thereon, to be served upon said taxpayer or the agent of such taxpayer directing it to appear and testify and to produce such books, records and papers as may be required.
(b) Any person, or any member of any firm or association, failing to comply with such order, shall be guilty of contempt, and shall be punished as provided by law in cases of contempt; and the district court of the county in which such person resides shall have jurisdiction of contempt cases arising under this Section.
Laws 1965, c. 414, § 2.
§68-223. Limitation of time for assessment of taxes - Extension agreements - False or fraudulent or failure to file report or return.
A. No assessment of any tax levied under the provisions of any state tax law except as provided in this section, shall be made after the expiration of three (3) years from the date the return was required to be filed or the date the return was filed, whichever period expires the later, and no proceedings by tax warrant or in court without the previous assessment for the collection of such tax shall be begun after the expiration of such period. No assessment shall be required if a report or return, signed by the taxpayer, was filed and the liability evidenced by the report or return has not been paid. If the assessment has been made within the limitation period set forth in this subsection, the tax may be collected by tax warrant or court proceeding, but only if the tax warrant is issued or the proceeding begun within ten (10) years after the assessment of the tax has become final.
B. Where before the expiration of the time prescribed in subsection A of this section for the assessment of the tax, both the Tax Commission and the taxpayer have consented in writing to its assessment after such time, the tax may be assessed at any time prior to the expiration of the period agreed upon, and the period so agreed upon may be extended by subsequent agreements in writing made before the expiration of the period previously agreed upon. In those instances where the time to file a claim for a refund has not expired at the date the extension agreement is entered into, the entering into such an agreement shall automatically extend the period in which a refund may be allowed or a claim for a refund may be filed to the final date of such agreement.
C. In the case of either a false or a fraudulent report or return, or failure to file a report or return, as required under any state tax law, the Tax Commission is authorized to compute, determine and assess the estimated amount of tax due from any information in its possession, or a proceeding in court may be begun for the collection of such tax without assessment at any time.
Added by Laws 1965, c. 414, § 2, emerg. eff. July 7, 1965. Amended by Laws 1996, c. 34, § 1, emerg. eff. April 8, 1996; Laws 1999, c. 168, § 1, eff. Nov. 1, 1999.
§68224. Declaration of termination of taxable period and acceleration of assessment.
(a) If the Tax Commission, notwithstanding that a tax return or report, or the tax with respect thereto, may not yet be due, and whether prior to or after the close of the taxable period, believes that:
(1) The tax liability of any person, who has a bond on file with the Tax Commission to indemnify the state for the payment of any state tax, has accrued in excess of the amount of the bond, or
(2) A taxpayer intends to depart or remove from the state, or conceal himself or any of his property subject to a lien for the payment of any state tax, or
(3) A taxpayer intends to discontinue business, or
(4) A taxpayer intends to do any other act tending to prejudice or render wholly or partially ineffectual proceedings to compute, assess or collect any state tax, the Tax Commission shall by its order declare the taxable period of any State tax terminated for such person, and shall immediately assess the tax from any information in its possession, notify the taxpayer, and demand immediate payment thereof. In the event of any failure or refusal to pay the tax by the taxpayer upon the demand of the Tax Commission, the tax shall become delinquent and the Tax Commission shall proceed to collect the same as in other cases of delinquent tax.
(b) The order of the Tax Commission assessing the tax may be appealed from as provided in this article, or the taxpayer may furnish to the Tax Commission security that he will make any return or report thereafter required to be filed with the Tax Commission, and pay the tax with respect to the taxable period when due, as provided for by the general procedure pertaining to the tax involved. After security is approved and accepted, and such further and other security with respect to the tax or taxes covered thereby is given, as the Tax Commission shall, from time to time find necessary and require, the payment of such taxes shall not be enforced by any proceedings prior to the expiration of the time otherwise allowed for paying such taxes.
(c) In cases where the assessment here authorized is made prior to the close of the taxable period, and in case the taxpayer elects to pay his taxes rather than to file a bond as herein provided for, the taxpayer may pay to the Tax Commission the sum assessed, together with additions to the tax provided by law, and at the time of making such payment shall notify the Tax Commission of his intention, at the close of the taxable period to file suit for recovery as provided in this article. Upon receipt of such notice the amount paid shall be segregated and held until the termination of thirty (30) days following the close of the taxable period for which levied; and if within such period, namely within thirty (30) days following the close of the taxable period, taxpayer files suit for recovery, the fund so segregated shall be further held pending the final determination of such suit.
Laws 1965, c. 414, § 2.
§68-225. Appeals.
A. Any taxpayer aggrieved by any order, ruling, or finding of the Oklahoma Tax Commission directly affecting the taxpayer or aggrieved by a final order of the Tax Commission issued pursuant to subsection G of Section 221 of this title may appeal therefrom directly to the Supreme Court of Oklahoma.
B. Within thirty (30) days after the date of mailing to the taxpayer of the order, ruling, or finding complained of, the taxpayer desiring to appeal shall:
1. File a petition in error in the office of the Clerk of the Supreme Court; and
2. Request that the Tax Commission prepare for filing with the Supreme Court, within thirty (30) days, the record of the appeal, certified by the Secretary of the Tax Commission, and consisting of any citations, findings, judgments, motions, orders, pleadings and rulings, together with a transcript of all evidence introduced at any hearing relative thereto, or such portion of such citations, findings, judgments, motions, orders, pleadings, rulings, and evidence as the appealing parties and the Tax Commission may agree to be sufficient to present fully to the Court the questions involved.
C. Upon request of the taxpayer, the Tax Commission shall furnish the taxpayer a copy of the proceedings had in connection with the matter complained of.
D. If the appeal is from an order of the Tax Commission assessing a tax or an additional tax, a penalty, or interest, the Tax Commission, within thirty (30) days from the date of the filing of the petition in error, may request the Court to order the taxpayer to pay to the Tax Commission the amounts of tax, additional tax, any penalty assessed, and interest accrued through the date of the payment, as a condition precedent to the right of the taxpayer to make and prosecute an appeal, and a jurisdictional prerequisite to the Supreme Court having jurisdiction to hear and determine the appeal. If, upon a final determination of the appeal the order assessing a tax, penalty, or interest is reversed or modified and it is determined that the tax or part thereof was erroneously or illegally assessed, the amounts paid by the taxpayer, together with the interest thereon at the rate of three percent (3%) per annum, shall be refunded to the taxpayer by the Tax Commission.
E. If the appeal is from an order of the Tax Commission or a district court denying a refund of taxes previously paid and if upon final determination of the appeal, the order denying the refund is reversed or modified, the taxes previously paid, together with interest thereon from the date of the filing of the petition in error at the rate of three percent (3%) per annum, shall be refunded to the taxpayer by the Tax Commission.
F. Such refunds and interest thereon shall be paid by the Tax Commission out of monies in the Tax Commission clearing account from subsequent collections from the same source as the original tax assessment, provided that in the event there are insufficient funds for refunds from subsequent collections from the same source, the refund shall be paid by the Tax Commission from monies appropriated by the Legislature to the special refund reserve account for such purposes as hereinafter provided. There is hereby created within the official depository of the State Treasury an agency special account for the Tax Commission for the purpose of making such refunds as may be required under this section, not otherwise provided. This account shall consist of monies appropriated by the Legislature for the purpose of making refunds under this section.
G. In lieu of the cash payment provided for in subsection D of this section, the taxpayer may file with the Tax Commission, pursuant to Section 210 of this title, a bond in double the amount of the tax, additional tax, penalties and interest so assessed, conditioned that the taxpayer will faithfully and diligently prosecute such appeal to a final determination, and in the event the order of the Tax Commission be affirmed on appeal, will pay such tax, additional tax, penalties and interest, and costs so assessed against the taxpayer. Any bond submitted pursuant to this subsection must be approved by the Tax Commission as to form and amount and accepted within the time prescribed by the Court.
H. If the appeal be from an order, judgment, finding, or ruling of the Tax Commission other than one assessing a tax and from which a right of appeal is not otherwise specifically provided for in this article the Uniform Tax Procedure Code, any aggrieved taxpayer may appeal from that order, judgment, finding, or ruling as provided in this section and may supersede the effect of such order, judgment, ruling, or finding by filing with the Tax Commission a bond in an amount fixed by the Tax Commission payable to the State of Oklahoma conditioned that the appeal will faithfully and diligently be prosecuted to a final determination, and in the event the order, judgment, ruling, or finding of the Tax Commission be affirmed on appeal, that such person will immediately conform thereto.
I. This section shall be construed to provide to the taxpayer a legal remedy by action at law in any case where a tax, or the method of collection or enforcement thereof, or any order, ruling, finding, or judgment of the Tax Commission is complained of, or is sought to be enjoined in any action in any court of this state or the United States of America.
Added by Laws 1965, c. 414, § 2, emerg. eff. July 7, 1965. Amended by Laws 1978, c. 211, § 1, emerg. eff. April 19, 1978; Laws 1989, c. 249, § 12, eff. July 1, 1989; Laws 1991, c. 342, § 9, emerg. eff. June 15, 1991; Laws 1994, c. 278, § 7, eff. Sept. 1, 1994; Laws 1998, c. 385, § 3, eff. Nov. 1, 1998; Laws 1999, c. 293, § 26, eff. Nov. 1, 1999; Laws 2000, c. 314, § 5, eff. July 1, 2000; Laws 2002, c. 458, § 2, eff. July 1, 2002.
§68226. Action to recover taxes as additional remedy to aggrieved taxpayer.
(a) In addition to the right to a protest of a proposed assessment as authorized by Section 221 of this title, a right of action is hereby created to afford a remedy to a taxpayer aggrieved by the provisions of this article or of any other state tax law, or who resists the collection of or the enforcement of the rules or regulations of the Tax Commission relating to the collection of any state tax; however, such remedy shall be limited as prescribed by subsection (c) of this section.
(b) Within thirty (30) days from the date of mailing to the taxpayer of an assessment for taxes or additional taxes pursuant to Section 221 of this title by the Tax Commission, any such taxpayer shall pay the tax to the Tax Commission, and at the time of making such payment shall give notice to the Tax Commission of his intention to file suit for recovery of such tax. The taxpayer shall not be required to file suit within such thirtyday period in order to prosecute an action as authorized by this section; however, failure to file such suit within one (1) year from the date of mailing of the assessment shall result in the assessment becoming final and absolute. If the taxpayer prevails the Tax Commission shall, by cash voucher drawn by the Tax Commission upon its official depository clearing account or special refund reserve account with the State Treasurer, refund to the taxpayer the amount of tax determined not to be due pursuant to the final judgment of the court having jurisdiction, together with interest on such amount at the rate applicable to money judgments in civil cases from the date of payment by the taxpayer to the date of the refund by the Tax Commission. The refunds paid shall be payable as provided in Section 225(d). If the taxpayer prevails and the court determines that the position of the Tax Commission in the proceeding was not substantially justified, the court shall award the taxpayer a judgment for reasonable attorney fees, reasonable expenses of expert witnesses in connection with the proceeding and reasonable costs of any study, analysis, engineering report, test or project which is found by the court to be necessary for the preparation of the taxpayer's case.
(c) This section shall afford a legal remedy and right of action in any state or federal court having jurisdiction of the parties and the subject matter. It shall be construed to provide a legal remedy in the state or federal courts by action at law only in cases where the taxes complained of are claimed to be an unlawful burden on interstate commerce, or the collection thereof violative of any Congressional Act or provision of the Federal Constitution, or in cases where jurisdiction is vested in any of the Courts of the United States. In all actions brought hereunder service of process upon the Chairman of the Tax Commission shall be sufficient service, and the Tax Commission shall be the sole, necessary and proper party defendant in any such suit, and the State Treasurer shall not be a necessary or proper party thereto.
(d) Upon request of any taxpayer and upon proper showing that the principle of law involved in the assessment of any tax is already pending before the courts for judicial determination, the taxpayer, upon agreement to abide by the decision of the court, may pay the tax so assessed under protest, but need not file a suit.
Laws 1965, c. 414, § 2; Laws 1978, c. 211, § 2, emerg. eff. April 19, 1978; Laws 1989, c. 249, § 13, eff. July 1, 1989; Laws 1990, c. 339, § 16, emerg. eff. May 31, 1990.
§68227. Erroneous payments Claims for refund Demand for hearing.
(a) Any taxpayer who has paid to the State of Oklahoma, through error of fact, or computation, or misinterpretation of law, any tax collected by the Tax Commission may, as hereinafter provided, be refunded the amount of such tax so erroneously paid, without interest.
(b) Any taxpayer who has so paid any such tax may, within three (3) years from the date of payment thereof file with the Tax Commission a verified claim for refund of such tax so erroneously paid. The Tax Commission may accept an amended sales tax, withholding tax or other report or return as a verified claim for refund if the amended report or return establishes a liability less than the original report or return previously filed.
(c) Said claim so filed with the Tax Commission, except for an amended report or return, shall specify the name of the taxpayer, the time when and period for which said tax was paid, the nature and kind of tax so paid, the amount of the tax which said taxpayer claimed was erroneously paid, the grounds upon which a refund is sought, and such other information or data relative to such payment as may be necessary to an adjustment thereof by the Tax Commission. It shall be the duty of the Commission to determine what amount of refund, if any, is due as soon as practicable after such claim has been filed and advise the taxpayer about the correctness of his claim and the claim for refund shall be approved or denied by written notice to the taxpayer.
(d) If the claim for refund is denied, the taxpayer may file a demand for hearing with the Commission. The demand for hearing must be filed on or before the thirtieth day after the date the notice of denial was mailed. If the taxpayer fails to file a demand for hearing, the claim for refund shall be barred.
(e) Upon the taxpayer's timely filing of a demand for hearing, the Commission shall set a date for hearing upon the claim for refund which date shall not be later than sixty (60) days from the date the demand for hearing was mailed. The taxpayer shall be notified of the time and place of the hearing. The hearing may be held after the sixtyday period provided by this subsection upon agreement of the taxpayer.
(f) The provisions of this section shall not apply: (1) to refunds of income tax erroneously paid, refunds of which tax shall be payable out of the income tax adjustment fund as provided by law; (2) to estate tax because the payment of such tax is covered by an order of the Tax Commission and the estate and interested parties are given notice that Commission's position and computation of the tax will become final unless they protest and resist the payment thereof as provided by statute; nor, (3) in any case where the tax was paid after an assessment thereof was made by the Tax Commission which assessment became final under the law.
Laws 1965, c. 414, § 2, emerg. eff. July 7, 1965; Laws 1978, c. 211, § 3, emerg. eff. April 19, 1978; Laws 1989, c. 249, § 14, eff. July 1, 1989; Laws 1993, c. 146, § 11.
§68-227.1. Illegal or invalid state tax laws - Process for obtaining refund of amounts paid.
A. Notwithstanding the provisions of any state tax law relating to or providing for the refund of taxes erroneously paid, no taxpayer shall be entitled to nor be allowed any refund of taxes, penalties or interest paid pursuant to a state tax law subsequently determined by a final decision of a court of competent jurisdiction to be illegal or invalid under the Constitution or laws of this state or of the United States, unless such taxpayer shall have timely availed himself or herself of the remedies and procedures provided by Section 207, 221, 226 or 815 of Title 68 of the Oklahoma Statutes to protest or challenge such tax, or, where the remedies provided by such sections are unavailable because the tax has not yet been assessed or proposed against such taxpayer, such taxpayer shall have brought an action for declaratory judgment in the district court to declare such tax or tax law illegal or invalid.
B. The provisions of this section shall apply to all state taxes, and shall also apply to the refund of any tax imposed by any municipality or county of this state where, under applicable law, such tax is collected by the Oklahoma Tax Commission.
Added by Laws 1994, c. 278, § 36, eff. Sept. 1, 1994.
§68228. Hearings on claims for refunds.
(a) If, upon the hearing as required by Section 227 of this title, the Tax Commission finds that such tax was erroneously paid through mistake of fact, or computation or misinterpretation of law, it shall enter its written order allowing said claim for refund, which refund may be paid to the taxpayer as provided by law, or credited against any taxes due or to become due by the taxpayer as the case may be; otherwise, the Tax Commission shall deny said claim. The taxpayer shall have the right of appeal to the Supreme Court from a decision of the Commission denying said claim for refund as provided in Section 225 of this article.
(b) Any order entered by the Tax Commission, disallowing a claim for refund, shall become final within thirtyone (31) days from the date it is entered, unless an appeal is prosecuted therefrom, in which event said order shall not become final until the appeal shall have been determined. In the event the Tax Commission allows said claim for refund, it shall pay the claimant the amount of refund, so allowed out of funds in the official depository clearing account of the Tax Commission, derived from collections in said fund from the same source from which the overpayment occurred; and an appropriation of so much of said fund as is necessary to pay said claims for refund erroneously paid or collected is hereby made; provided, that in the case of refunds due hereunder to taxpayers who are required to remit taxes to the Tax Commission on a monthly or quarterly basis, the Commission may, in lieu of a refund of the tax erroneously paid, credit the account of the taxpayer for such amount.
Laws 1965, c. 414, § 2; Laws 1978, c. 211, § 4, emerg. eff. April 19, 1978.
§68-228.1. Payment of refunds.
Except as otherwise provided by law, claims for refunds which are required to be paid by the Oklahoma Tax Commission shall be paid from funds in the official depository clearing account of the Tax Commission, derived from collections from the same source from which the overpayment occurred. Provided, in the case of refunds due to taxpayers who are required to remit taxes to the Tax Commission on a monthly or quarterly basis, the Tax Commission may, in lieu of such refund, credit the account of the taxpayer for such amount.
Added by Laws 1999, c. 390, § 4, emerg. eff. June 8, 1999.
§68229. Refunds Interest.
In case of any judgment rendered under any provision of law for the filing of a suit and recovery of taxes erroneously paid, in which judgment interest is allowed the taxpayer, said interest may be paid from the appropriation herein made where there is no other provision of law for paying same.
Laws 1965 C. 414, Sec. 2.
Laws 1965, c. 414, § 2.
§68-230. Certificate of indebtedness to state - Recording and indexing - Lien status.
The Oklahoma Tax Commission may issue to the county clerk of any county of the state a certificate certifying that the person therein named is indebted to the state for a specified state tax in the amount stated. The county clerk shall immediately record and index such certificate using the name of the delinquent taxpayer, the amount certified as being due, a short name of the tax, and the date and time of the filing for record. Such recording shall have the same force and effect as a judgment and shall constitute and be evidence and notice of the state's lien upon the title to any interest in any real property of the taxpayer named in such certificate. Such lien shall be in addition to any and all other liens existing in favor of the state to secure the payment of such unpaid tax, penalty, interest and costs, and such lien shall be paramount and superior to all other liens of whatsoever kind or character attaching to any of said property subsequent to the date of such recording and shall be in addition to any lien provided by Section 234 of this title. Such lien is hereby released and extinguished upon the payment of the tax, penalty, interest and costs, or, except as otherwise provided herein, upon the expiration of ten (10) years after the date upon which such certificate was recorded and indexed by the county clerk; provided, the Tax Commission may, prior to the release and extinguishment of such lien, reissue the certificate of indebtedness to the county clerk. A certificate so reissued shall continue the lien until payment of the tax, penalty, interest and costs, or upon the expiration of ten (10) years after the date upon which the certificate was re-recorded and indexed by the county clerk. All active liens evidenced by a certificate of indebtedness filed with a county clerk's office prior to November 1, 1989, shall be released and extinguished if the certificate of indebtedness is not refiled prior to November 1, 2001.
Added by Laws 1965, c. 414, § 2, emerg. eff. July 7, 1965. Amended by Laws 1979, c. 148, § 2, eff. Oct. 1, 1979; Laws 1992, c. 66, § 1, eff. July 1, 1992; Laws 1999, c. 407, § 2, eff. Nov. 1, 1999; Laws 2001, c. 358, § 9, eff. July 1, 2001.
§68-231. Warrant for sale of property to pay delinquent taxes, interest and penalties - Recording and indexing - Lien status - Execution - Costs and expenses.
A. If any tax, imposed or levied by any state tax law, or any portion of such tax, is not paid before the same becomes delinquent, the Oklahoma Tax Commission may immediately issue a warrant under its official seal. A tax warrant directed to the sheriff of any county of the state shall command the sheriff to levy upon and sell without any appraisement or valuation any real or personal property of the taxpayer found within the county for the payment of the delinquent tax, interest and penalties, and the cost of executing the warrant, and to return such warrant to the Tax Commission, and to pay to it any monies collected by virtue thereof, by a time to be therein specified, not more than sixty (60) days from the date of the warrant.
B. The Tax Commission shall, immediately upon issuance of the warrant, file with the county clerk of the county for which the warrant was issued a copy thereof, and thereupon the county clerk shall record and index such warrant in the same manner as judgments using the name of the taxpayer named in the warrant, a short name for the tax, the amount of the tax or portion thereof, and interest and penalties for which the warrant was issued, and the date and time when such copy was filed. The Tax Commission may file the warrant in the appropriate office of the county clerk by electronic means. The filing of the warrant in the office of the county clerk of the county, shall constitute and be evidence and notice of the state's lien upon any interest in any real property of the taxpayer against whom such warrant is issued, until such tax, penalty and interest accruing thereon is paid. Such lien shall be in addition to any and all other liens existing in favor of the state to secure the payment of the unpaid tax, penalty, interest and costs, and such lien shall be paramount and superior to all other liens of whatsoever kind or character, attaching to any of said property subsequent to the date and time of such filing and shall be in addition to any lien provided by Section 234 of this title. The Tax Commission shall, immediately upon issuance of the warrant, mail, by regular mail, a copy of the warrant to the last-known address of the delinquent taxpayer. Such lien is hereby released and extinguished upon the payment of such tax, penalty, interest and costs, or, except as otherwise provided herein, upon the expiration of ten (10) years after the date upon which the warrant was filed with the county clerk; provided, the Tax Commission may, prior to the release and extinguishment of such lien, refile the warrant in the office of the county clerk. A warrant so refiled shall continue the lien until payment of the tax, penalty, interest and costs, or upon the expiration of ten (10) years after the date upon which the warrant was refiled and indexed by the county clerk. All active liens evidenced by a warrant filed with a county clerk's office prior to November 1, 1989, shall be released and extinguished if the warrant is not refiled prior to November 1, 2001.
C. Except as otherwise provided in subsection D of this section, the Tax Commission shall forward the filed warrant to the sheriff of the county in which the warrant was filed. Upon receipt of the warrant, such sheriff shall thereupon proceed to execute the tax warrant in the same manner prescribed by law for executions against property upon judgment of a court of record; and such sheriff shall execute and deliver to the purchaser a bill of sale or deed, as the case may be.
D. The Tax Commission shall not direct or forward to the sheriff of any county any tax warrant issued pursuant to collection by the Tax Commission. The Tax Commission shall promulgate rules pertaining to tax warrants issued under this section.
E. The Tax Commission may levy upon and sell without any appraisement or valuation any real or personal property of any taxpayer identified by a filed tax warrant. The Tax Commission may execute the tax warrant in the same manner prescribed by law for executions against property upon judgment of a court of record and may execute and deliver to the purchaser a bill of sale or deed, as the case may be.
F. Any purchaser, other than the State of Oklahoma, shall be entitled, upon application to the court having jurisdiction of the property, to have confirmation, the procedure for which shall be the same as is now provided for the confirmation of a sale of property under execution, of such sale prior to the issuance of a bill of sale or deed. The State of Oklahoma shall be authorized to make bids at any such sale to the amount of tax, penalty and costs accrued. In the event such bid is successful, the sheriff shall issue proper muniment of title to the Tax Commission which shall hold such title for the use and benefit of the State of Oklahoma; and any taxpayer, or transferee of such taxpayer, shall have the right, at any time within one (1) year from the date of such sale, to redeem such property, upon the payment of all taxes, penalties and costs accrued to the date of redemption. Such applicant shall not be entitled to a credit upon such taxes, penalties and costs, by reason of revenue that might have accrued to the State of Oklahoma or other purchaser under sale, prior to such redemption. After the expiration of the period of redemption herein provided, the Tax Commission acting for the State of Oklahoma may sell such property at public auction, upon giving thirty (30) days' notice, published in a newspaper of general circulation in the county where such property is located, to the highest and best bidder for cash; and upon a sale had thereof, or when a redemption is made, the Tax Commission, for and on behalf of the State of Oklahoma, shall issue its bill of sale or quit claim deed, as the case may be, to the successful bidder or to the redemptioner. Such muniment of title shall be executed by the Tax Commission, and attested by its secretary, with the seal of the Tax Commission affixed. The sheriff shall be entitled to the same fee for services in executing the warrant, as the sheriff would be entitled to receive if he or she were executing an execution issued by the court clerk of the county upon a judgment of a court of record.
G. If any sheriff shall refuse or neglect to levy upon and sell any real or personal property of any taxpayer as directed by any warrant issued by the Tax Commission, or shall refuse or neglect, on demand, to pay over to the Tax Commission, its agents or attorneys, all monies collected or received under any warrant issued by the Tax Commission, at any time after collecting or receiving the same, such sheriff or other officer shall, upon motion of the Tax Commission in court, and after thirty (30) days' notice thereof, in writing, be amerced in the amount for which any such warrant was issued by the Tax Commission, together with all penalties and costs and with an additional penalty of ten percent (10%) thereon, to and for the use of the State of Oklahoma. Every surety of any sheriff or officer shall be made a party to the judgment rendered as aforesaid against the sheriff or other officer.
H. The Tax Commission may expend funds from the Oklahoma Tax Commission Fund in the State Treasury to reimburse the sheriff for travel and administrative costs actually and necessarily incurred while performing duties required by this section. Such costs shall be assessed against the delinquent taxpayer, shall be added to the amount necessary to satisfy the tax warrant, and upon collection thereof shall be deposited in the Oklahoma Tax Commission Fund.
I. A tax warrant issued and filed under authority of this section shall:
1. Constitute and be evidence and notice of the state's lien upon real property; and
2. Not be subject to the provisions of any dormancy statute which would limit the enforceability, effect or operation of the lien, except as otherwise provided in this section.
J. After July 1, 1993, the Tax Commission shall not issue any certificates of indebtedness pursuant to the provisions of Section 230 of this title.
K. When a tax warrant has been issued and filed as provided in this section, the Tax Commission shall have all of the remedies and may take all of the proceedings thereon for the collection thereof which may be had or taken upon a judgment of the district court.
Added by Laws 1965, c. 414, § 2, emerg. eff. July 7, 1965. Amended by Laws 1979, c. 148, § 3, eff. Oct. 1, 1979; Laws 1985, c. 356, § 4, emerg. eff. July 30, 1985; Laws 1986, c. 269, § 19, operative July 1, 1986; Laws 1990, c. 339, § 14, emerg. eff. May 31, 1990; Laws 1992, c. 66, § 2, eff. July 1, 1992; Laws 1993, c. 28, § 1, emerg. eff. March 30, 1993; Laws 1993, c. 146, § 12; Laws 1999, c. 407, § 3, eff. Nov. 1, 1999; Laws 2001, c. 358, § 10, eff. July 1, 2001; Laws 2003, c. 472, § 6.
NOTE: Laws 1993, c. 14, § 1 repealed by Laws 1993, c. 146, § 29.
§68231.1. Additional penalty for failure to pay delinquent taxes.
An additional penalty of Fifteen Dollars ($15.00) or an amount equal to ten percent (10%), but not to exceed Two Hundred Dollars ($200.00), of the total amount of tax, penalty and interest as stated on the face of a tax warrant, unless the actual liability at the date of issuance of the warrant is determined to be a lesser amount, whichever amount is greater, is hereby imposed upon each tax debtor who neglects, refuses or fails to pay delinquent taxes. The additional penalty shall be added to and become a part of the total tax debt due the state and may be collected in the same manner as provided by law for collection of delinquent taxes. Provided, however, the penalty imposed pursuant to this section shall not be assessed or collected more than once for the execution of a tax warrant in each county.
Upon collection of the additional penalty imposed herein, the Oklahoma Tax Commission shall transmit the revenue to the State Treasurer to be deposited in the Oklahoma Tax Commission Fund. The revenue from the additional penalty collected by the sheriff shall be apportioned by the Oklahoma Tax Commission to the various county treasurers to be deposited in the appropriate fund of the county sheriff's department to be used by such department to increase efforts to locate tax debtors and their property, to execute upon tax warrants, and to collect delinquent taxes. The revenue from the additional penalty collected by the Oklahoma Tax Commission shall be apportioned to the Oklahoma Tax Commission Fund to be used by the Oklahoma Tax Commission to enhance its efforts to collect delinquent taxes. The additional penalty is imposed as a fee for the collection of delinquent taxes by the sheriff, undersheriff, deputy sheriff or Tax Commission. The penalty is in addition to the reimbursement of actual and necessary travel and costs authorized in Section 231 of this title and any other fees which may be allowed by the district court.
Added by Laws 1986, c. 218, § 9, operative July 1, 1986. Amended by Laws 1990, c. 339, § 15, emerg. eff. May 31, 1990; Laws 1992, c. 66, § 3, eff. July 1, 1992; Laws 1998, c. 385, § 4, eff. Nov. 1, 1998.
§68231.2. Attachment of assets of delinquent taxpayer.
Upon a final determination by a court of competent jurisdiction that a tax levied or collected by the state is delinquent, the Oklahoma Tax Commission may issue an order attaching the assets, up to the amount of tax liability, of any bank accounts maintained within this state by the delinquent taxpayer. The Tax Commission shall mail a certified copy of the attachment order to the banks in which the accounts are maintained. Upon receipt of such order the banks shall be liable to the Tax Commission in an amount equal to any attached funds released from the accounts without the written permission of the Tax Commission. The Tax Commission may release funds from the accounts to effectuate payment of the tax liability or to protect the interests of the state and shall release the account within thirty (30) days of full payment of the tax liability.
Added by Laws 1985, c. 356, § 9, emerg. eff. July 30, 1985.
§68-231.3. Recovery of fees and costs by Tax Commission.
The Tax Commission shall be entitled to recover from the taxpayer named in the warrant any fees or costs charged to the Tax Commission by the county clerk for the filing of any tax lien or tax warrant against the taxpayer. The Tax Commission shall also be entitled to recover or offset the filing fees or costs previously paid to the county clerk for the filing of a tax lien or tax warrant upon the withdrawal of a tax warrant or lien by the Tax Commission, or upon the filing of a release issued by the Tax Commission for no consideration after a determination by the Tax Commission that the lien or warrant is clouding the title of property by reason of an error in the description of such property or by reason of similarity of names.
Added by Laws 1994, c. 221, § 3, eff. Sept. 1, 1994.
§68232. Injunction proceedings.
When any reports required under any state tax law have not been filed or may be insufficient to furnish all the information required by the Tax Commission, or when the taxes imposed by any state tax law have not been paid, the Tax Commission may institute, in the name of the State of Oklahoma upon relation of the Tax Commission, any necessary action or proceedings to enjoin such person, firm, or corporation from continuing operations until such reports have been filed or taxes paid as required, and in all proper cases, including but not limited to cases in which the evidence establishes that a taxpayer has repeatedly failed to collect and remit sales or withholding taxes, injunction shall be issued without a bond being required from the state. After an action to enjoin the operation of any person, firm or corporation has been instituted by the Tax Commission a payout agreement under which the delinquent taxpayer is to make periodic payments toward the satisfaction of the tax debt may only be entered into upon the specific request or motion of the Tax Commission. Upon a proper showing in any such action that the claim of the state for taxes is in danger of being lost or rendered uncollectible by reason of the mismanagement, dissipation or concealment of the property by the taxpayer and a request is made for the appointment of a receiver to manage the property of the taxpayer, a receiver shall be appointed.
Amended by Laws 1985, c. 356, § 5, emerg. eff. July 30, 1985.
§68233. Municipalities Procedure when taxes delinquent.
(a) In case any city, town, county, or other political subdivision of the state shall fail or refuse to pay in whole or in part any tax when due under the provisions of any state tax law, the Tax Commission shall issue a tax warrant for the amount of tax due, and the sheriff shall serve such warrant on the county treasurer. From the date of such service, the said tax, penalties and interest shall be a lien on all ad valorem tax penalties collected by said treasurer for and on account of any such city, town, county, or other political subdivision of the state until the amount of all such delinquent tax, penalties and interest is paid; and the county treasurer is hereby directed and required to remit the amount of all such ad valorem tax penalties, when collected by him, to the Tax Commission until the amount due the State of Oklahoma on such delinquent tax is paid; provided that such lien shall not attach to the property to which such penalties so collected are attributable.
(b) The State of Oklahoma shall have the right, on the relation of the Tax Commission, to sue any such city, town, county, or other political subdivision for any such tax in any court of competent jurisdiction, and if judgment is rendered in favor of the state in such suit it shall be collected and paid as provided by law for the collection of judgments against cities, towns, counties, or other political subdivisions of the state.
Laws 1965, c. 414, § 2.
§68-234. Lien for unpaid taxes, interest and penalties.
A. All taxes, interest and penalties imposed by the provisions of Section 201 et seq. of this title, or any state tax law, are hereby declared to constitute a lien in favor of the state upon all franchises, property, and rights to property, whether real or personal, then belonging to or thereafter acquired by the person owing the tax, whether such property is employed by such person in the prosecution of business, or is in the hands of an assignee, trustee or receiver for the benefit of creditors, from the date the taxes are due and payable under the provisions of the state tax laws levying such taxes. The lien shall be in addition to any lien accrued by the filing of a tax warrant or tax certificate as provided by Sections 230 and 231 of this title. The lien shall be prior, superior and paramount to all other liens, claims, or encumbrances on the property of whatsoever kind or character, except those of any bona fide mortgagee, pledgee, judgment creditor, or purchaser, whose right shall have attached prior to the date of the filing and indexing in the office of the county clerk in the county in which the property is located, of the notice of the lien of the state under a tax certificate as provided by Section 230 of this title, or under a tax warrant as provided by Section 231 of this title, and who have filed or recorded the mortgages and conveyances in the office of the county clerk of the county in which the property is located. Such taxes, penalties and interest shall at all times, constitute a prior, superior and paramount claim as against the claims of unsecured creditors. The lien of the state shall continue until the amount of the tax and penalty due and owing, and interest subsequently accruing thereon, is paid, or, except as otherwise provided herein, upon the expiration of ten (10) years after the date of the filing and indexing in the office of the county clerk in the county in which the property is located, of the notice of the lien of the state under a tax certificate as provided by Section 230 of this title, or under a tax warrant as provided by Section 231 of this title; provided, the Oklahoma Tax Commission may, prior to the expiration of the ten-year period provided for herein, refile the notice of the lien with the county clerk. A notice so refiled shall continue the lien until payment of the tax, penalty, interest and costs, or upon the expiration of ten (10) years after the date upon which the notice was refiled. All active liens evidenced by a notice of lien filed with a county clerk's office prior to November 1, 1989, shall be released and extinguished if the notice of lien is not refiled prior to November 1, 2001.
B. In any action affecting the title to real estate or the ownership or right to possession of personal property, the State of Oklahoma may be made a party defendant, for the purpose of determining its lien upon the property involved therein only in cases where notice of the lien of the state has been filed and indexed as provided in Sections 230 and 231 of this title. In any such action, service of summons upon the Oklahoma Tax Commission, by serving any member thereof, shall be sufficient service and binding upon the State of Oklahoma. In all such actions or suits, the complaint or pleading shall include the name and address of the taxpayer whose liability created the lien and the identifying number evidencing the lien.
Added by Laws 1965, c. 414, § 2, emerg. eff. July 7, 1965. Amended by Laws 1979, c. 148, § 4, eff. Oct. 1, 1979; Laws 1997, c. 294, § 10, eff. July 1, 1997; Laws 1999, c. 407, § 4, eff. Nov. 1, 1999; Laws 2001, c. 358, § 11, eff. July 1, 2001.
§68235. Fiduciaries Final accounts.
(a) No final account of any fiduciary shall be allowed by any probate court of the state, unless such account shows, and the judge of said court finds, that all taxes imposed by the provisions of any state tax law which have become payable, have been paid, and that all taxes which may become due are secured by bond, deposit or otherwise. The certificate of the Tax Commission shall be conclusive as to the payment of any tax, to the extent of said certificate.
(b) For the purpose of facilitating the settlement and distribution of the estates held by fiduciaries, the Tax Commission may, subject to the approval of the court having jurisdiction of any such estate, or as provided by Section 219 of this Code, agree upon the amount of taxes, at any time due or to become due, from such fiduciaries, under the provisions of any state tax law, and payment, in accordance with such agreement, shall be in full satisfaction of all taxes to which the agreement relates.
Laws 1965, c. 414, § 2.
§68236. Agents, accountants, attorneys or other persons representing taxpayers before Commission.
The Tax Commission may prescribe rules and regulations governing the recognition of agents, accountants, attorneys, or other persons representing taxpayers before the Tax Commission, and may require that such person, before being recognized as representatives of taxpayers, shall make a proper showing that they are of good character and in good repute and are possessed of the necessary qualifications to enable them to render such taxpayers valuable services, and are otherwise competent to advise and assist such taxpayers in the preparation of reports, returns or cases to be filed with or heard before the Tax Commission. The Tax Commission may, after due notice and an opportunity for hearing, suspend and disbar from further practice before the Tax Commission any such person, agent, accountant or attorney shown to be incompetent or disreputable or who refuses to comply with the said rules and regulations, or who shall, with intent to defraud, in any manner willfully and knowingly deceive, mislead, or threaten any taxpayer or prospective client by words, circular, letter, or by advertisement, or who shall advise a taxpayer to file a fraudulent or false report or return, or who shall prepare a false or fraudulent report or return in any particular whatsoever, or who shall assist, aid or abet any taxpayer in concealing any information pertaining to said taxpayer's books, records, reports or returns, or who shall delay proceedings of the Tax Commission to assist a taxpayer in disposing of or concealing property upon which a levy could be made for the collection of taxes accrued, or who shall be in default in payment of taxes or filing reports or returns under any state tax law.
Laws 1965, c. 414, § 2.
§68237. Taxes imposed by other States.
The courts of this state shall recognize and enforce liability for taxes lawfully imposed by other states which extend a like comity to this state.
Laws 1965, c. 414, § 2.
§68238. Conduct of business or activities without license or permit.
Any person, association, or corporation required to obtain a license or permit by any state tax law, or by other law which the Tax Commission is required to enforce, who shall, without obtaining such license or permit, conduct the business or carry on the activities required to be licensed, shall be guilty, upon conviction, of a misdemeanor and shall be punished by the imposition of a fine of not more than Five Thousand Dollars ($5,000.00), or shall be punished by imprisonment in the county jail for not more than one (1) year; and, upon complaint of the Tax Commission shall be enjoined from further operating or conducting such business until such license or permit has been procured.
The venue for prosecutions arising pursuant to the provisions of this section shall be in the district court of any county in which such business activities are transacted.
Amended by Laws 1984, c. 220, § 2, operative July 1, 1984.
§68-238.1. State license - Collection of income taxes - Notification - Definitions.
A. It is the intent of the Legislature that the provisions of this section operate to provide for the collection of income taxes due to the State of Oklahoma by persons holding state licenses in a manner that will maximize flexibility for licensees to pay any such taxes due while minimizing disruption to operations of licensing entities. It is the further intent of the Legislature that the Oklahoma Tax Commission allow at least six (6) months notice to licensees pursuant to the provisions of subsection C of this section prior to notification of noncompliance to a licensing entity.
B. Each licensing entity shall, on a date that allows the Tax Commission to comply with the notice provisions of subsection A of this section, provide to the Tax Commission a list of all its licensees and such identifying information as may be required by the Tax Commission. Such list and information shall be used by the Tax Commission exclusively for the purpose of collection of income taxes due to the State of Oklahoma. The provisions of any laws making application information confidential shall not apply with respect to information supplied to the Tax Commission pursuant to the provisions of this section; provided, such information shall be subject to the provisions of Section 205 of Title 68 of the Oklahoma Statutes.
C. The Tax Commission shall notify any licensee who is not in compliance with the income tax laws of this state. Such notification shall include:
1. A statement that the licensee's license will not be renewed until the taxpayer is deemed by the Tax Commission to be in compliance with the income tax laws of this state;
2. The reasons that the taxpayer is considered to be out of compliance with the income tax laws of this state, including a statement of the amount of any tax, penalties and interest due or a list of the tax years for which income tax returns have not been filed as required by law;
3. An explanation of the rights of the taxpayer and the procedures which must be followed by the taxpayer in order to come into compliance with the income tax laws of this state; and
4. Such other information as may be deemed necessary by the Tax Commission.
D. A licensee who has entered into and is abiding by a payment agreement, or who has requested relief as an innocent spouse which is pending or has been granted, shall be deemed to be in compliance with the state income tax laws for purposes of this section.
E. If the Tax Commission notifies a licensee who is not in compliance with the income tax laws of this state as required in this section and such licensee does not respond to such notification or fails to come into compliance with the income tax laws of this state after an assessment has been made final or after the Tax Commission determines that every reasonable effort has been made to assist the licensee to come into compliance with the income tax laws of this state, the Tax Commission, notwithstanding the provisions of Section 205 of this title, shall so notify the licensing entity, which shall not renew the licensee's license at such time as it is subject to renewal and shall notify the applicant of the reason for nonrenewal. If a licensee who has been previously reported by the Tax Commission to a licensing entity as being out of compliance comes into compliance, the Tax Commission shall immediately notify the licensing entity. A licensing entity shall not be held liable for any action with respect to a state license pursuant to the provisions of this section.
F. If the Oklahoma Bar Association receives notice that a licensed attorney is not in compliance with the income tax laws of this state as provided in this section, the Bar Association shall begin proceedings by which the attorney may be suspended pursuant to Rule Governing Disciplinary Proceedings. If suspended, the attorney may be reinstated pursuant to reinstatement procedures as provided in the Rules Governing Disciplinary Proceedings.
G. The Tax Commission shall promulgate rules for the implementation of the provisions of this section.
H. As used in this section:
1. "State license" means a license, certificate, registration, permit, approval or other similar document issued by a licensing entity granting to an individual or business a right or privilege to engage in a profession, occupation or business in this state. "State license" does not include an inactive license issued by a licensing entity which does not grant an individual the right to engage in a profession, occupation or business in this state; and
2. "Licensing entity" means a bureau, department, division, board, agency, commission or other entity of this state or of a municipality in this state that issues a state license.
Added by Laws 2000, c. 314, § 6, eff. July 1, 2000. Amended by Laws 2001, c. 295, § 1, emerg. eff. May 31, 2001.
§68-238.2. Compliance of state employees with state income tax laws - Notification - Disciplinary action.
A. It is the intent of the Legislature that the provisions of this section operate to provide for the collection of income taxes due to the State of Oklahoma by state employees in a manner that will maximize flexibility for state employees to pay any such taxes due while minimizing disruption to operations of state agencies. It is the further intent of the Legislature that the Oklahoma Tax Commission provide notice to state employees pursuant to the provisions of subsection C of this section and that the Tax Commission provide such notice to state employees at least six (6) months prior to notification of noncompliance to a state agency.
B. The Office of State Finance shall, not later than August 1, 2003, and August 1 of each year thereafter, provide to the Tax Commission a list of all state employees as of the preceding July 1 and such identifying information as may be required by the Tax Commission. Such list and information shall be used by the Tax Commission exclusively for the purpose of collection of income taxes due to the State of Oklahoma. The provisions of any laws making information confidential shall not apply with respect to information supplied to the Tax Commission pursuant to the provisions of this section; provided, such information shall be subject to the provisions of Section 205 of Title 68 of the Oklahoma Statutes.
C. The Tax Commission shall, not later than November 1, 2003, and November 1 of each year thereafter, notify any state employee who is not in compliance with the income tax laws of this state. Such notification shall include:
1. A statement that the employee will be subject to disciplinary action by the appointing authority unless the taxpayer is deemed by the Tax Commission to be in compliance with the income tax laws of this state;
2. The reasons that the taxpayer is considered to be out of compliance with the income tax laws of this state, including a statement of the amount of any tax, penalties and interest due or a list of the tax years for which income tax returns have not been filed as required by law;
3. An explanation of the rights of the taxpayer and the procedures which must be followed by the taxpayer in order to come into compliance with the income tax laws of this state; and
4. Such other information as may be deemed necessary by the Tax Commission.
D. A state employee who has entered into and is abiding by a payment agreement, or who has requested relief as an innocent spouse which is pending or has been granted, shall be deemed to be in compliance with the state income tax laws for purposes of this section.
E. If the Tax Commission notifies a state employee who is not in compliance with the income tax laws of this state as required in this section and such state employee does not respond to such notification or fails to come into compliance with the income tax laws of this state after an assessment has been made final or after the Tax Commission determines that every reasonable effort has been made to assist the state employee to come into compliance with the income tax laws of this state, the Tax Commission, notwithstanding the provisions of Section 205 of Title 68 of the Oklahoma Statutes, shall so notify the appointing authority, which shall commence disciplinary action with respect to the state employee and shall notify the state employee of the reason for such action; provided, if a state agency receives a third notification with respect to a state employee who has failed to come into compliance with the income tax laws for the same tax year or years, such employee shall be terminated by the state agency according to the procedures provided by law. If a state employee who has been previously reported by the Tax Commission to a state agency as being out of compliance comes into compliance, the Tax Commission shall immediately notify the appointing authority. Neither a state agency nor an appointing authority shall be held liable for any action with respect to a state employee pursuant to the provisions of this section.
F. The Tax Commission shall promulgate rules for the implementation of the provisions of this section.
G. As used in this section:
1. "State agency" means any office, department, board, commission or institution of the executive, legislative or judicial branch of state government;
2. "Employee" or "state employee" means an appointed officer or employee of a state agency; provided, the term employee or state employee shall not include an elected official or an employee of a local governmental entity; and
3. "Appointing authority" means the chief administrative officer of a state agency.
Added by Laws 2003, c. 376, § 1, eff. July 1, 2003. Amended by Laws 2005, c. 479, § 4, eff. July 1, 2005.
§68239. Continuance of business or operations after forfeiture of required bond.
Any person, association, or corporation who, after the forfeiture by the Tax Commission of any bond posted by him, shall continue or attempt to continue in the business or operations made taxable by any state tax law pursuant to which the bond was required to be posted, without having said bond reinstated or without making a new bond, shall be guilty, upon conviction, of a misdemeanor and shall be punished by the imposition of a fine of not more than Five Thousand Dollars ($5,000.00), or shall be imprisoned in the county jail for not more than one (1) year; and, upon complaint of the Tax Commission, shall be enjoined from further operating or conducting such business until such bond has been reinstated or a new bond has been approved.
The venue for prosecutions arising pursuant to the provisions of this section shall be in the district court of any county in which such business activities are transacted.
Amended by Laws 1984, c. 220, § 3, operative July 1, 1984.
§68240. Failure or refusal to file report or return Penalty.
(a) Any taxpayer who, due to intentional disregard of any state tax law, but without intent to defraud, shall fail or refuse to file any report or return required to be filed pursuant to the provisions of any state tax law, or shall fail or refuse to furnish a supplemental return or other data required by the Tax Commission, shall be guilty, upon conviction, of a misdemeanor and shall be punished by a fine of not exceeding Five Thousand Dollars ($5,000.00) or by imprisonment in the county jail for not more than one (1) year, or by both said fine and imprisonment.
(b) The venue for prosecutions arising pursuant to the provisions of this section shall be in the district court of any county in which such person resides or, if such person is not a resident of this state, any county in which such person does business or maintains an established place of business.
(c) Failure or refusal of any taxpayer to file any report or return required to be filed pursuant to the provisions of any state tax law, or failure or refusal of a taxpayer to furnish a supplemental return or other data required by the Tax Commission within thirty (30) days after notice by personal service or by registered or certified mail with return receipt requested of the due date of such report or return, shall, for the purpose of this section, be prima facie evidence of intentional disregard of state tax law. Provided, that this subsection shall be set out in full in the notice to the taxpayer.
(d) The Tax Commission may grant additional time to the taxpayer to furnish such return or other data. In such event, a failure of the taxpayer to furnish such return or other data within thirty (30) days from the date to which the time is extended shall, for the purpose of this article, be prima facie evidence of intentional disregard of state tax law.
Amended by Laws 1984, c. 220, § 4, operative July 1, 1984; Laws 1986, c. 218, § 10, emerg. eff. June 9, 1986.
§68-240.1. False return or return with intent to defraud - Penalty.
A. Any taxpayer who, with intent to defraud the state or evade the payment of any state tax, fee, interest, or penalty which shall be due pursuant to any state tax law, shall fail or refuse to file any report or return required to be filed pursuant to the provisions of any state tax law, or shall fail or refuse to furnish a supplemental return or other data required by the Tax Commission, shall be guilty, upon conviction, of a felony and shall be punished by imposition of a fine of not less than One Thousand Dollars ($1,000.00) and not more than Fifty Thousand Dollars ($50,000.00) or by imprisonment in the State Penitentiary for not less than two (2) years and not more than five (5) years, or by both such fine and imprisonment.
B. The venue for prosecutions arising pursuant to the provisions of this section shall be in the district court of any county in which such taxpayer resides or, if such taxpayer is not a resident of this state, any county in which such taxpayer conducts business or maintains an established place of business.
C. Failure or refusal of a taxpayer to file any report or return required to be filed pursuant to the provisions of any state law, or failure or refusal of a taxpayer to furnish a supplemental return or other data required by the Tax Commission within thirty (30) days after notice by personal service or by registered or certified mail with return receipt requested of the due date of such report or return, shall be, for purposes of this section, prima facie evidence of intent of the taxpayer to defraud the state and evade the payment of such tax. The provisions of this subsection shall be set forth in full in such notice to the taxpayer.
D. The Tax Commission may grant additional time to the taxpayer to furnish such return or other data. In such event, a failure of the taxpayer to furnish such return or other data within thirty (30) days from the date to which the time is extended shall, for purposes of this section, be prima facie evidence of the intent of the taxpayer to defraud the state and evade the payment of such tax.
Added by Laws 1986, c. 218, § 11, emerg. eff. June 9, 1986. Amended by Laws 1997, c. 133, § 552, eff. July 1, 1999; Laws 1999, 1st Ex.Sess., c. 5, § 402, eff. July 1, 1999.
NOTE: Laws 1998, 1st Ex.Sess., c. 2, § 23 amended the effective date of Laws 1997, c. 133, § 552 from July 1, 1998, to July 1, 1999.
§68-241. False or fraudulent reports, returns - Penalty - Venue.
A. Any person required to make, render, sign or verify any report, return, statement, claim, application, or other instrument, pursuant to the provisions of this title or of any state tax law who, with intent to defeat or evade the payment of the tax, shall make a false or fraudulent return, statement, report, claim, invoice, application, or other instrument, or any person who shall aid or abet another in filing with the Tax Commission such a false or fraudulent report or statement, shall be guilty, upon conviction, of a felony and shall be punished by the imposition of a fine of not less than One Thousand Dollars ($1,000.00) and not more than Fifty Thousand Dollars ($50,000.00), or shall be imprisoned in the State Penitentiary for not less than two (2) years and not more than five (5) years, or shall be punished by both said fine and imprisonment.
B. The venue of prosecutions arising pursuant to the provisions of this section shall be in the district court of any county where such return or report was verified.
Added by Laws 1965, c. 414, § 2, emerg. eff. July 7, 1965. Amended by Laws 1984, c. 220, § 5, operative July 1, 1984; Laws 1986, c. 218, § 12, emerg. eff. June 9, 1986; Laws 1997, c. 133, § 553, eff. July 1, 1999; Laws 1999, 1st Ex.Sess., c. 5, § 403, eff. July 1, 1999.
NOTE: Laws 1998, 1st Ex.Sess., c. 2, § 23 amended the effective date of Laws 1997, c. 133, § 553 from July 1, 1998, to July 1, 1999.
§68242. False entries or neglect to make entries Penalty Venue.
Any person, whether acting for himself or for any other person, who willfully makes any false entry or who fails to make any entry which it is his duty to make in any book, ledger, or account required by the provisions of this title or any state tax law to be kept, shall be guilty, upon conviction, of a misdemeanor and shall be punished by the imposition of a fine of not more than Five Thousand Dollars ($5,000.00) or shall be sentenced to the county jail for a term not exceeding one (1) year, or both.
The venue of all prosecutions arising pursuant to the provisions of this section shall be in the district court of the county in which such person resides, or if such person is not a resident of this state, any county in which such person does business or maintains an established place of business.
Amended by Laws 1984, c. 220, § 6, operative July 1, 1984.
§68243. Evidence and witnesses Penalty Venue.
(a) Any person, or any member of any firm or association, or any official, agent, or employee of any corporation, who shall fail or refuse:
(1) to testify, or
(2) to produce any books, records, or papers which the Tax Commission shall require, or
(3) to permit the examination of the same, or
(4) to furnish any other evidence or information which the Tax Commission may require, or
(5) to answer any questions which may be put to him by the Tax Commission touching the business, property, assets, or effects of any such person, firm, association, or corporation, or the valuation thereof, or the income or profits therefrom, shall be guilty, upon conviction, of a misdemeanor and shall be punished by a fine of not more than Five Thousand Dollars ($5,000.00), or by imprisonment for not more than one (1) year in the county jail, or by both said fine and imprisonment.
(b) The venue of prosecutions arising pursuant to the provisions of this section shall be in the district court of either the county in which the person resides or maintains his place of business or in the county in which the hearing is held.
Amended by Laws 1984, c. 220, § 7, operative July 1, 1984.
§68-244. False answers to questions or false affidavits.
Any person, or member of any firm or association, or any official, agent, or employee of any corporation, who shall knowingly make false answer to any question which may be put to him by the Tax Commission, touching the business, property, assets, or effects of any such person, firm, association, or corporation, or the valuation thereof, or the income or profits therefrom, or who shall make or present any false affidavit concerning any list, schedule, statement, report or return, or for any other purpose, filed with said Tax Commission or required to be filed by this title or by any state tax law, shall be guilty of the felony of perjury, and, upon conviction, shall be punished as provided for in Section 246 of this title.
Added by Laws 1965, c. 414, § 2, emerg. eff. July 7, 1965. Amended by Laws 1984, c. 220, § 8, operative July 1, 1984; Laws 1997, c. 133, § 554, eff. July 1, 1999.
NOTE: Laws 1998, 1st Ex.Sess., c. 2, § 23 amended the effective date of Laws 1997, c. 133, § 554 from July 1, 1998, to July 1, 1999.
§68245. Verification of reports or returns.
Reports or returns or other matter which are required by law to be verified by oath or affirmation and filed with the Tax Commission may be verified by oath or affirmation taken before a person authorized to administer oaths, or by a declaration in writing that the report or return or other matter is signed under the penalties of perjury. The fact that a report or return or other matter purports to have been signed by a person shall for all purposes be prima facie evidence that he in fact signed the report or return or other matter. Laws 1965 C. 414, Sec. 2.
Laws 1965, c. 414, § 2.
§68-246. Penalty.
Any person who shall knowingly verify, by oath, affirmation, or declaration, any false report or false return or other matter which is false, which by statute is required to be verified by oath, affirmation, or declaration and filed with the Tax Commission, shall be guilty, upon conviction, of the felony of perjury and shall be punished by the imposition of a fine of not less than Five Hundred Dollars ($500.00) or more than Five Thousand Dollars ($5,000.00), or by imprisonment in the county jail for not less than ninety (90) days or more than one (1) year or by imprisonment in a state correctional institution for not less than ninety (90) days, or more than ten (10) years.
Added by Laws 1965, c. 414, § 2, emerg. eff. July 7, 1965. Amended by Laws 1984, c. 220, § 9, operative July 1, 1984; Laws 1997, c. 133, § 555, eff. July 1, 1999; Laws 1999, 1st Ex.Sess., c. 5, § 404, eff. July 1, 1999.
NOTE: Laws 1998, 1st Ex.Sess., c. 2, § 23 amended the effective date of Laws 1997, c. 133, § 555 from July 1, 1998, to July 1, 1999.
§68247. Additional penalty for filing return or report containing insufficient information to determine correctness of tax liability Purpose.
Any taxpayer who files a purported state tax return or report that does not contain sufficient information to determine the correctness of the reported tax liability and that, on its face, indicates a prima facie intent to delay or impede the administration or enforcement of any state tax law shall be subject to a penalty, in addition to any other penalty imposed by law, in the amount of Five Thousand Dollars ($5,000.00). Said penalty shall be recoverable by the Tax Commission as a part of the tax and shall be apportioned as provided for the apportionment of the tax on which such penalty is collected.
This provision is intended to impose an additional penalty on those taxpayers who do not file required tax returns or reports in processible form, make spurious constitutional claims on the face of the return or report, refuse to complete the return or report, present information that is clearly inconsistent, or declare "gold standard" or "war tax" deductions or any other similar claim with the intent not to file required tax returns or reports in a processible form.
Added by Laws 1983, c. 275, § 15, emerg. eff. June 24, 1983. Amended by Laws 1984, c. 220, § 10, operative July 1, 1984.
§68248. Commission may require taxpayer to furnish certain information.
In addition to information required on any state tax return or report prescribed by the Oklahoma Tax Commission, upon request or demand for production of information by the Commission, or its duly authorized agent, a state taxpayer shall furnish any information deemed necessary to determine the amount of state tax liability. Notwithstanding Section 205 of this title the Commission shall have the power to compel the production of books, records or papers of any person, firm, association, partnership, corporation or other legal entity regarding the business, property, assets or effects of any Oklahoma taxpayer which may be necessary to a determination of state tax liability of such taxpayer, including any books, records or papers necessary to obtain or verify information necessary for resolution of a protest by a taxpayer to an assessment of tax or additional tax or to the resolution of a claim for refund filed by a taxpayer. If the information is deemed confidential or proprietary by the person, firm, association, partnership, corporation or other legal entity, no production can be compelled pending a hearing on the nature and extent of the production of privileged and confidential information.
Added by Laws 1983, c. 275, § 16, emerg. eff. June 24, 1983. Amended by Laws 1990, c. 339, § 3, emerg. eff. May 31, 1990.
§68-249. Tax preparers - Duties - Violations - Penalties.
A. Any person that prepares any state tax returns or reports for an Oklahoma taxpayer, other than the employer of the preparer, for compensation, shall:
1. Set forth the name, identifying number, and address of the preparer on the face of the prepared return or report; and
2. Manually, or by means of a rubber stamp, mechanical device, or computer software program which includes a facsimile of the individual preparer's signature or printed name, sign and execute the prepared return or report; and
3. Furnish the taxpayer a copy of the prepared return or report and retain a copy of same for a period of three (3) years from the date the prepared return or report was filed or required to be filed, whichever expires the later.
Upon a determination of a violation of this subsection, the preparer shall be subject to a penalty in the amount of Five Hundred Dollars ($500.00) which shall be apportioned as provided for the apportionment of the tax for which the return or report was prepared.
B. Any person that prepares any state tax returns or reports for an Oklahoma taxpayer for compensation is hereby prohibited from endorsing or negotiating the state income tax refund check of the taxpayer. Upon a determination by the Tax Commission that a preparer violated this subsection, a penalty in the amount of Five Hundred Dollars ($500.00) shall be assessed. Said penalty shall be apportioned in the same manner as provided for the apportionment of the state income tax revenues.
C. The penalties imposed pursuant to the provisions of this
section shall be in addition to any other penalties imposed by any tax laws or civil or criminal laws of this state.
Added by Laws 1983, c. 275, § 17, emerg. eff. June 24, 1893. Amended by Laws 1984, c. 220, § 11, operative July 1, 1984; Laws 2005, c. 479, § 5, eff. July 1, 2005.
§68250. Register of tax warrants Establishment and maintenance - Public inspection.
The Oklahoma Tax Commission shall establish and maintain a register of tax warrants filed pursuant to the provisions of the Uniform Tax Procedure Code, Sections 201 through 260 of this title. The Tax Commission shall establish and maintain a separate register of tax warrants filed pursuant to the provisions of subsection D of Section 231 of this title. Said registers shall be public records which shall be open to public inspection.
Added by Laws 1985, c. 95, § 3, eff. Jan. 1, 1986. Amended by Laws 1986, c. 55, § 1, eff. Nov. 1, 1986; Laws 1993, c. 28, § 2, emerg. eff. Mar. 30, 1993.
§68251. Filing petitions and applications for collection of delinquent taxes by mail.
Notwithstanding the provisions of any statute or court rule to the contrary the Tax Commission may file petitions and applications in the various district courts of this state to initiate actions authorized in Section 201 et seq. of Title 68 of the Oklahoma Statutes, for collection of delinquent state taxes by mailing same to the respective court clerk of the district courts of this state. Upon receipt of such petition or application, the court clerk shall cause hearings to be set as required by law, and shall cause the necessary summons or notice to be issued and served by sheriff or mail, as set forth in the summons or notice.
§68252. Attorney General Duty to prosecute actions to collect certain taxes.
In addition to the obligations of state or local agencies or entities, the Attorney General shall have the duty to file and prosecute all actions to enforce the collection of sales tax, withheld income tax, or other taxes owed to the State of Oklahoma:
1. In all necessary civil proceedings; and
2. In all criminal cases, when the district attorney fails to file a case, within thirty (30) days after being requested to do so by the Tax Commission or other state agency.
Added by Laws 1985, c. 356, § 7, emerg. eff. July 30, 1985.
§68253. Corporations or limited liability companies Filing assessment for certain unpaid taxes Liability of principal officers, managers or members.
When the Oklahoma Tax Commission files a proposed assessment against corporations or limited liability companies for unpaid sales taxes, withheld income taxes or motor fuel taxes collected pursuant to Article 5, 6 or 7 of this title, the Commission shall file such proposed assessments against the principal officers of the corporations or the managers or members personally liable for the tax. The principal officers of any corporation shall be liable for the payment of any tax as prescribed by this section if such officers were officers of the corporation during the period of time for which the assessment was made. Managers or members of any limited liability company shall be liable for the payment of any tax as prescribed by this section if the managers or members were specified as responsible for withholding or collection and remittance of taxes during the period of time for which the assessment was made. If no managers or members were specified to be responsible for the duty of withholding and remittance of taxes during the period of time for which the assessment was made, then all managers and members shall be liable.
The liability of a principal officer for sales tax, withheld income tax or motor fuel tax shall be determined in accordance with the standards for determining liability for payment of federal withholding tax pursuant to the Internal Revenue Code of 1986, as amended, or regulations promulgated pursuant to such section.
Added by Laws 1985, c. 356, § 8, emerg. eff. July 30, 1985. Amended by Laws 1989, c. 249, § 16, eff. July 1, 1989; Laws 1993, c. 366, § 27, eff. Sept. 1, 1993.
§68254. Garnishment proceeding to collect delinquent taxes, penalties or interest.
Upon a hearing with notice the Oklahoma Tax Commission shall be entitled to proceed by garnishment to collect any delinquent tax and to collect any penalty or interest due and owing as a result of a tax delinquency. Provided, that upon proper application under the procedures outlined herein, the court may issue an order continuing the garnishment for the collection of delinquent taxes, penalties or interest until the total amount of such delinquent taxes, penalties or interest have been collected.
Added by Laws 1985, c. 356, § 10, emerg. eff. July 30, 1985. Amended by Laws 1986, c. 218, § 13, emerg. eff. June 9, 1986.
§68-255. Contracting with debt collection agency to collect delinquent taxes.
A. In order to facilitate and expedite the collection of taxes more than ninety (90) days overdue from any taxpayer, the Oklahoma Tax Commission may enter into a contract with a debt collection agency doing business in the State of Oklahoma or in any other state for the collection of such delinquent taxes in addition to all other taxes accrued or accruing, including penalties and interest thereon, from the taxpayer. The contract shall only authorize the debt collection agency to collect tax liabilities which are already established and the Commission shall not refer accounts to the debt collection agency unless the Commission has notified the taxpayer, by first class mail, of the liability and has made additional efforts to collect the debt. In addition, the contract shall not authorize the debt collection agency to conduct audits or examine the books and records of a taxpayer in any manner. The Tax Commission may also enter into a contract with a person doing business in the State of Oklahoma or in any other state for the purpose of identifying and locating the assets of such delinquent taxpayer. Such contracts authorized by this section shall be subject to the provisions of the Oklahoma Central Purchasing Act.
B. In addition to the authority provided in subsection A of this section, the Tax Commission may enter into a contract for the purpose of identifying nonresident businesses and individuals who are required by law to file and pay Oklahoma state taxes and who are presently unknown to the Tax Commission.
C. Prior to entering into such a contract with a debt collection agency, the Tax Commission shall require that the debt collection agency file a bond in the amount of One Hundred Thousand Dollars ($100,000.00). The bond shall be a bond from a surety company chartered or authorized to do business in this state, cash bond, certificates of deposits, certificates of savings or U.S. Treasury bonds, as the Tax Commission may deem necessary to guarantee compliance with the terms of the contract.
D. Each contract entered into by the Tax Commission with a debt collection agency, pursuant to the provisions of this section, shall specify that fees for services rendered, reimbursements or other remuneration shall be based on the total amount of delinquent taxes, including accrued penalties and interest, which is actually collected. No costs shall be reimbursed unless authorized in the contract. Each contract entered into between the Tax Commission and a debt collection agency shall provide for the payment of fees for such services, reimbursements or other remuneration not in excess of twenty percent (20%) of the total amount of delinquent taxes, penalty and interest actually collected.
E. Each contract entered into by the Tax Commission with a person for the purpose of identifying and locating assets of delinquent taxpayers shall specify the amount of money to be paid for the performance of such services. No costs shall be reimbursed unless authorized in the contract.
F. All such funds collected by a debt collection agency, including the fees for collection services as provided for in such contract, shall be remitted to the Tax Commission within five (5) days from the date of collection from a taxpayer. The Tax Commission shall pay from such remitted fees the amount of fees such debt collecting agency is entitled to for services performed pursuant to the provisions of such contract. All assets of such delinquent taxpayers which are identified and located shall be reported to the Tax Commission within five (5) days from the date of identification and location. Forms to be used for such remittances and reports shall be prescribed by the Tax Commission.
G. A debt collection agency entering into a contract with the Tax Commission or a person entering into a contract with the Tax Commission for asset location purposes pursuant to this section shall agree that it is receiving income from sources within this state or doing business in this state for purposes of the Oklahoma tax laws.
Added by Laws 1986, c. 218, § 14, emerg. eff. June 9, 1986. Amended by Laws 1994, c. 385, § 2, eff. Sept. 1, 1994; Laws 1997, c. 294, § 11, eff. July 1, 1997; Laws 1998, c. 385, § 5, eff. July 1, 1998.
§68-255.1. Repealed by Laws 1994, c. 385, § 4, eff. Sept. 1, 1994.
§68256. Taxpayer assistance program.
The Tax Commission shall establish a taxpayer assistance program to provide information and problemsolving expertise to the general public regarding the tax laws of this state. Said program shall include, but not be limited to, the following:
1. The installation of tollfree telephone lines within the Commission in order to provide information and problemsolving assistance to the general public. Such telephone lines shall provide access to Tax Commission employees who are specially trained and equipped to provide such assistance; and
2. The preparation and distribution of publications providing information to the taxpayer regarding the tax laws of this state. Such publications shall be made available statewide; and
3. The presentation of taxpayer education programs by specially trained Tax Commission employees throughout the state to inform the general public regarding the state tax laws and to provide problemsolving assistance to taxpayers.
Added by Laws 1986, c. 218, § 15, emerg. eff. June 9, 1986.
§68257. Notice of changes in state tax law.
The Tax Commission shall inform taxpayers that the Tax Commission is not required to give actual notice to taxpayers of changes in any state tax law. Such information shall be printed on all tax return or report forms prescribed by the Tax Commission and on any Tax Commission publications for general distribution as the Commission may prescribe.
Added by Laws 1986, c. 218, § 16, operative July 1, 1987.
§68-258. Service of summons or notice in state tax proceedings.
Notwithstanding the provisions of any statute to the contrary, employees of the Tax Commission may personally serve the necessary summons or notice issued for any hearing, civil proceeding, or criminal proceeding initiated by the Tax Commission pursuant to any state tax law. Service by the Tax Commission pursuant to this section shall have the same force and effect as if such service had been made by any other person authorized by law to perform such service. The provisions of this section shall not authorize the execution of tax warrants by the Tax Commission.
Added by Laws 1986, c. 218, § 17, emerg. eff. June 9, 1986. Amended by Laws 1998, c. 59, § 1, eff. Nov. 1, 1998.
§68259. Additional penalty in criminal proceedings for violating state tax law.
An additional penalty of an amount equal to ten percent (10%) of the amount of tax, penalty and interest, alleged and determined in a criminal action to be due and delinquent, is imposed upon any person convicted of, entering a plea of guilty, or entering a plea of nolo contendere to a violation of a tax law of this state. The additional penalty shall be added to and become a part of the total debt due the state pursuant to the tax law allegedly violated. Upon collection of the additional penalty imposed herein, the Oklahoma Tax Commission shall transmit the revenue to the State Treasurer to be deposited in the Oklahoma Tax Commission Fund. The revenue from the additional penalty herein shall be apportioned by the Oklahoma Tax Commission to the county treasurers for deposit to the appropriate fund of the district attorney to reimburse the district attorney for costs of prosecution of criminal actions for violations of state tax laws.
Added by Laws 1986, c. 218, § 18, operative July 1, 1986.
§68260. Special tax enforcement unit Staff - Violations - Criminal actions - Reports.
A. For the purpose of insuring that taxes due and owing to the State of Oklahoma are collected, the Oklahoma Tax Commission is hereby directed to create a special tax enforcement unit, within the Commission, whose sole function shall be to determine compliance with state tax laws and to enforce such laws. The duties of the special tax enforcement unit shall include but not be limited to the investigation for and initiation of criminal action for violations of state tax laws.
B. The special tax enforcement unit shall be staffed at a level and in such form as may be determined by the Commission of not more than twenty-five (25) employees as the Commission may determine.
C. The General Counsel of the Oklahoma Tax Commission shall notify the appropriate district attorney of violations of state tax laws. The General Counsel or the district attorney may initiate criminal actions for violations of the tax laws of this state in the district court of the county in which the defendant resides or maintains a place of business. The attorneys for the Tax Commission may prosecute such criminal actions, or may, upon the request of the district attorney, appear and assist in the prosecution of such actions initiated by the district attorney.
D. The Tax Commission shall submit a report to the Legislature before January 31 of each year detailing the activities of the special tax enforcement unit. Said report shall include, but is not limited to, the amount of total delinquent taxes collected.
Added by Laws 1985, c. 345, § 13, emerg. eff. July 30, 1985. Amended by Laws 1986, c. 269, § 13, operative July 1, 1986; Laws 1991, c. 274, § 9, eff. July 1, 1991.
§68261. Data processing services Bonds Contracts.
The Oklahoma Tax Commission may expend funds for data processing services necessary to microfilm, record, or otherwise preserve information in the files and records of the Commission. Any nongovernmental entity contracting to provide data processing services for the Commission shall provide a surety bond in an amount set by the Commission of not less than Twentyfive Thousand Dollars ($25,000.00). The Commission may enter into such contracts when it deems the contracts to be necessary for the performance of the duties imposed upon the Commission by law. Any governmental or nongovernmental entity contracting with the Commission to provide data processing services shall be subject to the penalty provisions of Section 205 of Title 68 of the Oklahoma Statutes.
Added by Laws 1986, c. 269, § 11, operative July 1, 1986.
§68-262. Audits of entities believed to owe additional taxes.
The Oklahoma Tax Commission may contract with private auditors or audit firms to audit the books of individuals, firms, or corporations which the Tax Commission believes may owe the State of Oklahoma additional tax monies. The Tax Commission may contract and may expend monies from the Oklahoma Tax Commission Reimbursement Fund to enter into such contracts. However, in no instance shall any such contract be paid upon a percentage basis, or on any basis whereby the compensation under the contract is dependent upon the amount of monies collected. Any such contract containing a provision whereby the compensation is conditioned upon or measured directly or indirectly by the amount of money collected shall be void and unenforceable. The Tax Commission may contract and may expend monies from the Oklahoma Tax Commission Reimbursement Fund in payment of a reasonable fee of the delivered funds in payment of contracts entered into with temporary service companies or professional collection agencies as necessary for the collection of delinquent taxes or other monies owed to the state. Such payment shall not be made until the funds have been deposited with the Tax Commission. Temporary employees or contractors hereunder shall not disclose confidential tax information except as authorized by Section 205 of this title, subject to the penalties contained therein.
Added by Laws 1986, c. 269, § 12, operative July 1, 1986. Amended by Laws 1994, c. 385, § 3, eff. Sept. 1, 1994; Laws 1996, c. 290, § 23, eff. July 1, 1996; Laws 1998, c. 240, § 1, eff. Nov. 1, 1998.
§68263. Attachment of sums due taxpayer from state.
A. If any tax warrant or certificate remains outstanding and unpaid, the Tax Commission may issue an order attaching the sums due or to become due, up to the amount of the liability upon such tax warrant or certificate, upon any contract between the taxpayer named in such tax warrant or certificate and the State of Oklahoma or any department, board, institution, commission or agency thereof, for the furnishing of any services, goods, merchandise, supplies, materials or equipment for which payment is made upon claims approved by the Office of State Finance.
B. A certified copy of the attachment order shall be delivered to the Director of State Finance and notice of such attachment shall be mailed to the taxpayer at the taxpayer's lastknown address.
C. From and after receipt of the attachment order, the Director of State Finance shall not pay nor shall the State Treasurer issue any check or warrant for payment to the taxpayer for the sums or funds so attached without a written release from the Tax Commission.
D. The attachment orders issued by the Tax Commission shall continue in force until released by the Tax Commission. The Tax Commission may issue subsequent or successive attachment orders, which shall be cumulative.
E. If the taxpayer fails within thirty (30) days after his claim upon such contract, or contracts if there are more than one, has been initially received by the Director of State Finance, or within thirty (30) days after the mailing of notice of such attachment, whichever is later, to obtain and file with the Director of State Finance a release executed by the Tax Commission, the Director of State Finance shall authorize the payment to the Tax Commission of the sums or funds attached, or so much thereof as have been certified for payment pursuant to procedures prescribed by the Director of State Finance. Such payments to the Tax Commission shall be credited against the liability on the tax warrant or certificate, and shall constitute to the extent thereof, payment by the state, department, board, institution, commission or agency to the taxpayer upon such contract.
F. The Tax Commission may release funds from the claims or contracts attached to effectuate payment of the liability on such tax warrant or certificate or to protect the interest of the state, and shall release the funds attached within thirty (30) days of full payment of such liability.
G. The provisions of this section shall not apply to payroll claims of or on behalf of employees of this state.
H. No person, firm or corporation that is delinquent in the reporting or paying of any tax due under the laws of this state shall be registered as a vendor under the provisions of Section 85.33 of Title 74 of the Oklahoma Statutes, nor included on the approved bidder lists maintained by the Purchasing Division of the Office of Public Affairs.
Added by Laws 1986, c. 301, § 30, operative July 1, 1986.
§68-264. Contract and release of taxpayer information to certain entities - Search for nonregistered taxpayers, nonfilers and underreporting taxpayers - Confidentiality - Penalty.
A. Notwithstanding the provisions of Section 205 of this title and Section 85.7 of Title 74 of the Oklahoma Statutes, the Oklahoma Tax Commission is authorized to enter into a contract with and release taxpayer information to entities deemed to be qualified by the Tax Commission to acquire or utilize their technology systems or information to detect non-registered taxpayers, non-filers and under-reporting taxpayers. Functions and duties to be performed by the contracting entity may include registration, processing, and collection functions and other functions deemed necessary by the Tax Commission.
B. Compensation shall be based on a percentage of the additional tax revenues attributable to the implementation and use of the technology systems or information. The contract may provide for additional fixed fees for services performed under the contract to be paid from monies appropriated by the Legislature or from the additional tax revenues.
C. The taxpayer information released to the contracting party shall be considered confidential and privileged and neither the contracting party nor its employees, shall disclose any information obtained from the records or files. A violation of any of the provisions of this section shall constitute a misdemeanor punishable in the same manner and to the same extent as a violation of any of the provision of Section 205 of this title.
D. The Tax Commission shall pay from the taxes collected and attributable to the utilization of the acquired technology systems the amount of fees the contracting party is entitled for services performed pursuant to the contract.
Added by Laws 2002, c. 154, § 1, emerg. eff. April 29, 2002. Amended by Laws 2003, c. 472, § 7.
§68-270. Certification of credit qualification - Report of credits claimed and allowed.
A. Notwithstanding any other provisions of this section, the Oklahoma Tax Commission shall, upon request of any taxpayer or the taxpayer's authorized agent, representative or attorney, provide certification in writing of qualification for the credits in the following sections of law:
1. Section 2357.7 of Title 68 of the Oklahoma Statutes;
2. Section 2357.11 of Title 68 of the Oklahoma Statutes;
3. Section 2357.32A of Title 68 of the Oklahoma Statutes;
4. Section 2357.41 of Title 68 of the Oklahoma Statutes; and
5. Section 2357.42 of Title 68 of the Oklahoma Statutes.
B. On or before November 1 of each year subsequent to the effective date of this section, the Oklahoma Tax Commission shall file a report with the Speaker of the Oklahoma House of Representatives, the President Pro Tempore of the State Senate and the Director of the Office of State Finance, stating the amount of credits claimed and allowed.
Added by Laws 2005, c. 381, § 14, eff. July 1, 2005.
§68-301. Definitions.
For purposes of Section 301 et seq. of this title:
1. The term "cigarette" is defined to mean and include all rolled tobacco or any substitute therefor, wrapped in paper or any substitute therefor and weighing not to exceed three (3) pounds per thousand cigarettes;
2. The term "person" is defined to mean and include 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, or any political subdivision of the state or combination acting as a unit, in the plural or singular number;
3. The term "wholesaler", "distributor" and/or "jobber" is defined to mean and include a person, firm or corporation organized and existing, or doing business, primarily to sell cigarettes to, and render service to retailers in the territory such person, firm or corporation chooses to serve, and that:
a. purchases cigarettes directly from the manufacturer,
b. at least seventy-five percent (75%) of whose gross sales are made at wholesale,
c. handles goods in wholesale quantities and sells through salespersons, advertising and/or sales promotion devices,
d. carries at all times at its principal place of business a representative stock of cigarettes for sale, and
e. comes into the possession of cigarettes for the purpose of selling them to retailers or to persons outside or within the state who might resell or retail such cigarettes to consumers.
In addition to the foregoing, and irrespective of the percentage or type of sales, the term "wholesaler", "distributor" and/or "jobber" shall also include all purchasers of cigarettes making purchases directly from the manufacturer for distribution at wholesale or retail sale and this shall not affect the requirements relating to retail licenses;
4. The term "retailer" is defined to be:
a. a person who comes into the possession of cigarettes for the purpose of selling, or who sells them at retail, or
b. a person, not coming within the classification of wholesaler, distributor and/or jobber as herein defined, having possession of more than one thousand cigarettes;
5. The term "consumer" is defined to be a person who receives or who in any way comes into possession of cigarettes for the purpose of consuming them, giving them away, or disposing of them in a way other than by sale, barter or exchange;
6. The term "Tax Commission" is defined to mean the Oklahoma Tax Commission;
7. The term "sale" and/or "sales" is hereby defined to be and declared to include sales, barters, exchanges and every other manner, method and form of transferring the ownership of personal property from one person to another, and is also declared to be the use or consumption in this state in the first instance of cigarettes received from without the state or of any other cigarettes upon which the tax has not been paid. The term "first sale" shall mean and include the first sale or distribution of cigarettes in intrastate commerce or the first use or consumption of cigarettes within this state;
8. The term "stamp" as herein used shall mean the stamp or stamps by use of which:
a. the tax levied pursuant to the provisions of Section 301 et seq. of this title is paid,
b. the tax levied pursuant to the provisions of Section 349 of this title is paid, or
c. the payment in lieu of taxes authorized pursuant to a compact entered into by the State of Oklahoma and a federally recognized Indian tribe or nation pursuant to the provisions of subsection C of Section 346 of this title is paid;
9. The term "drop shipment" shall mean and include any delivery of cigarettes received by any person within this state when payment for such cigarettes is made to the shipper or seller by or through a person other than the consignee;
10. The term "distributing agent" shall mean and include every person in this state who acts as an agent of any person outside the state by receiving cigarettes in interstate commerce and storing such cigarettes subject to distribution or delivery upon order from the person outside the state to distributors, wholesale dealers and retail dealers, or to consumers. The term "distributing agent" shall also mean and include any person who solicits or takes orders for cigarettes to be shipped in interstate commerce to a person in this state by a person residing outside of Oklahoma, the tax not having been paid on such cigarettes;
11. The term "vending machine" shall mean and include any coin operating machine, contrivance, or device, by means of which cigarettes are sold or dispensed in their original container;
12. The term "use" means and includes the exercise of any right or power over cigarettes incident to the ownership or possession thereof, except that it shall not include the sale of cigarettes in the regular course of business;
13. a. The term "delivery sale" means any sale of cigarettes to a consumer in Oklahoma where either:
(1) the purchaser submits the order for such sale by means of a telephonic or other method of voice transmission, the mails or any other delivery service, or the Internet or other online service, or
(2) the cigarettes are delivered by use of the mails or other delivery service.
b. A sale of cigarettes which satisfies the criteria in subparagraph a of this paragraph shall be a delivery sale regardless of whether the seller is located within or outside of Oklahoma.
c. A sale of cigarettes not for personal consumption to a person who is a wholesale dealer or a retail dealer shall not be a delivery sale.
d. For purposes of this paragraph, any sale of cigarettes to an individual in Oklahoma shall be treated as a sale to a consumer unless such individual is licensed as a distributor or retailer of cigarettes by the Tax Commission;
14. The term "delivery service" means any person, including but not limited to the United States Postal Service, that is engaged in the commercial delivery of letters, packages, or other containers;
15. The term "manufacturer" means any person who manufactures, fabricates, assembles, processes, or labels a finished cigarette; or imports, either directly or indirectly, a finished cigarette for sale or distribution in this state;
16. The term "mails" or "mailing" means the shipment of cigarettes through the United States Postal Service;
17. The term "shipping container" means a container in which cigarettes are shipped in connection with a delivery sale; and
18. The term "shipping documents" means bills of lading, airbills, or any other documents used to evidence the undertaking by a delivery service to deliver letters, packages, or other containers.
Added by Laws 1965, c. 195, § 2, emerg. eff. June 10, 1965. Amended by Laws 1988, c. 47, § 13, operative July 1, 1988; Laws 1992, c. 339, § 14, eff. Jan. 1, 1993; Laws 1993, c. 366, § 28, eff. Sept. 1, 1993; Laws 2003, c. 475, § 1, eff. Nov. 1, 2003.
§68-302. Stamp excise tax upon sale, use, gift, possession or consumption of cigarettes.
There is hereby levied upon the sale, use, gift, possession, or consumption of cigarettes within the State of Oklahoma a tax at the rate of four (4) mills per cigarette. Beginning November 3, 1992, the revenue resulting from the tax levied pursuant to this section shall be apportioned by the Oklahoma Tax Commission and transmitted to the State Treasurer, who shall deposit the same in the Oklahoma Building Bonds of 1992 Sinking Fund. No part of the cigarette tax receipts derived from the increase in the cigarette tax rate shall be used in determining the amount of cigarette tax collections to be paid into the State of Oklahoma Building Bonds of 1961 Sinking Fund pursuant to the provisions of Sections 57.31 through 57.43 of Title 62 of the Oklahoma Statutes.
The tax hereby levied shall be paid only once on any cigarettes sold, used, received, possessed, or consumed in this state. The tax shall be evidenced by stamps which shall be furnished by and purchased from the Tax Commission or by an impression of such tax by the use of a metering device when authorized by the Tax Commission as provided for in Section 301 et seq. of this title, and the stamps or impression shall be securely affixed to one end of each package in which cigarettes are contained or from which consumed.
The impact of the tax levied by the provisions of Section 301 et seq. of this title is hereby declared to be on the vendee, user, consumer, or possessor of cigarettes in this state, and, when the tax is paid by any other person, such payment shall be considered as an advance payment and shall thereafter be added to the price of the cigarettes and recovered from the ultimate consumer or user. In making a sale of cigarettes in this state, a wholesaler or jobber may separately state and show upon the invoice covering the sale the amount of tax paid on the cigarettes sold. The tax shall be evidenced by appropriate stamps attached to each package of cigarettes sold. Every retailer who makes sales of cigarettes within this state to persons for use or consumption shall separately show the amount of tax paid as evidenced by appropriate stamps on each package of cigarettes sold, and the tax shall be collected by the retailer from the user or consumer. The provisions of this section shall in no way affect the method of collection of tax on cigarettes as now provided for by existing law. As to cigarettes packed in quantities of less than ten, for distribution as samples, payment of the tax may be made to the Tax Commission in a lump sum without affixing stamps on such packages.
Notwithstanding any other provision of law, the tax levied pursuant to the provisions of Section 301 et seq. of this title shall be part of the gross proceeds or gross receipts from the sale of cigarettes, as those terms are defined in paragraph 7 of Section 1352 of this title.
Laws 1965, c. 195, § 2, emerg. eff. June 10, 1965; Laws 1984, c. 3, § 1, emerg. eff. Feb. 21, 1984; Laws 1984, c. 153, § 6, emerg. eff. April 21, 1984; Laws 1992, c. 350, § 17; Laws 1999, c. 390, § 5, emerg. eff. June 8, 1999.
§683021. Additional tax on cigarettes Rates Apportionment of revenues.
(a) In addition to the tax levied in Section 302 of this title, there is hereby levied upon the sale, use, gift, possession, or consumption of cigarettes, as defined in Sections 301 through 325 of this title, within the State of Oklahoma a tax at the rate of two and onehalf (2 1/2) mills per cigarette. Such tax shall be evidenced by tax stamps as now provided for by law for other cigarette taxes, except that as to cigarette packages of less than ten cigarettes for free distribution as samples, the tax levied in this section shall be computed and paid as provided for other cigarette taxes without affixing stamps on each such package.
(b) No part of the revenues resulting from the additional tax levied in this section shall be used in determining the amount of cigarette tax collections to be paid into the State of Oklahoma Building Bonds of 1961 Sinking Fund pursuant to the provisions of Sections 57.31 through 57.43 of Title 62 of the Oklahoma Statutes, into the State of Oklahoma Building Bonds of 1965 Sinking Fund pursuant to the provisions of Sections 57.51 through 57.60 of Title 62 of the Oklahoma Statutes, or into the State of Oklahoma Institutional Building Bonds of 1965 Sinking Fund pursuant to the provisions of Sections 57.61 through 57.73 of Title 62 of the Oklahoma Statutes.
(c) The revenues resulting from the additional tax levied in this section through June 30, 1968, shall be apportioned by the Oklahoma Tax Commission and transmitted to the State Treasurer, who shall deposit the same in the State Treasury in a fund to be known as the "State of Oklahoma Building Bonds of 1968 Reserve Fund", which fund is hereby created. The Legislature shall appropriate monies from such fund or so much thereof as may be deemed necessary; first, for the payment of interest and principal upon any bonds issued for capital improvements pursuant to the provisions of Section 38 of Article X of the Oklahoma Constitution; second, for other capital improvements at state institutions; third, for operating expenses of such capital improvements; and fourth, for any other purposes of state government. From and after July 1, 1968, all revenues resulting from the additional tax levied in this section, except revenues dedicated to the retirement of the State of Oklahoma Building Bonds of 1968, Series A, B, C, D and E, or any refunding of any or all of such series, and except revenues required to be deposited in the Oklahoma Memorial Hospital Fund, shall be apportioned by the Oklahoma Tax Commission and transmitted to the State Treasurer, who shall deposit the same in the General Revenue Fund.
(d) The cigarette tax levied in this section shall be collected and administered in all respects not inconsistent with as now or hereafter provided for by law for other cigarette taxes now levied, collected and administered pursuant to the provisions of Sections 301 through 325 of this title.
Amended by Laws 1984, c. 3, § 2, emerg. eff. Feb. 21, 1984.
§683022. Additional tax on cigarettes Rates Disposition of revenue.
(a) In addition to the tax levied in Sections 302 and 3021 of this title, there is hereby levied upon the sale, use, gift, possession, or consumption of cigarettes, as defined in Sections 301 through 325 of this title, within the State of Oklahoma a tax at the rate of two and onehalf (2 1/2) mills per cigarette. Such tax shall be evidenced by tax stamps as now provided for; however, as to cigarette packages of less than ten cigarettes for free distribution as samples, the tax herein levied shall be computed and paid as provided for other cigarette taxes without affixing stamps on each such package.
(b) No part of the revenues resulting from the additional tax levied in this section shall be used in determining the amount of cigarette tax collections to be paid into the State of Oklahoma Building Bonds of 1961 Sinking Fund pursuant to the provisions of Sections 57.31 through 57.43 of Title 62 of the Oklahoma Statutes or into the State of Oklahoma Building Bonds of 1965 Sinking Fund pursuant to the provisions of Sections 57.61 through 57.73 of Title 62 of the Oklahoma Statutes.
(c) Except as otherwise provided in this subsection, the revenue resulting from the additional tax levied in this section shall be apportioned by the Oklahoma Tax Commission and transmitted to the State Treasurer, who shall deposit the same in the General Revenue Fund of the State of Oklahoma. Beginning on the effective date of this section, the revenue resulting from the additional tax levied in this section shall be apportioned by the Oklahoma Tax Commission and transmitted to the State Treasurer, who shall deposit the same in the Oklahoma Building Bonds of 1992 Sinking Fund.
(d) The cigarette tax levied in this section shall be collected and administered in all respects not inconsistent with as now or hereafter provided for by law for other cigarette taxes now levied, collected, and administered pursuant to the provisions of Sections 301 through 325 of this title.
Laws 1979, c. 195, § 5, eff. July 1, 1979; Laws 1980, c. 245, § 1, emerg. eff. May 16, 1980; Laws 1981, c. 211, § 1, emerg. eff. June 1, 1981; Laws 1982, c. 46, § 1, emerg. eff. March 26, 1982; Laws 1984, c. 3, § 3, emerg. eff. Feb. 21, 1984; Laws 1992, c. 350, § 18, eff.
§683023. Additional tax on cigarettes Rate Apportionment of revenues.
(a) In addition to the tax levied in Sections 302, 3021 and 3022 of Title 68 of the Oklahoma Statutes, except as otherwise provided in this section, there is hereby levied upon the sale, use, gift, possession, or consumption of cigarettes, as defined in Sections 301 through 325 of Title 68 of the Oklahoma Statutes, within the State of Oklahoma a tax at a rate reflecting the amount of the reduction of the federal cigarette tax levied pursuant to the provisions of subsection (b) of Section 5701 of the Internal Revenue Code, scheduled to be effective October 1, 1985. However, if the federal cigarette tax is increased subsequent to said reduction but prior to January 1, 1986, and said federal cigarette tax is increased by the amount of the reduction of said tax which was effective October 1, 1985, the provisions of this section shall cease to be effective. If the federal cigarette tax is increased subsequent to said reduction but prior to January 1, 1986, and said federal cigarette tax is increased by an amount less than the amount of the reduction of said tax which was effective October 1, 1985, the tax levied pursuant to the provisions of this section shall be at a rate reflecting the difference between the amount of the reduction of federal cigarette tax which was effective October 1, 1985, and the amount of the increase of said tax. Such tax shall be evidenced by tax stamps as now provided for by law for other cigarette taxes, except that as to cigarette packages of less than ten cigarettes for free distribution as samples, the tax therein levied shall be computed and paid as provided for other cigarette taxes without affixing stamps on such package.
(b) No part of the revenues resulting from the additional tax levied in this section shall be used in determining the amount of cigarette tax collections to be paid into the State of Oklahoma Institutional Building Bonds of 1961 Sinking Fund pursuant to the provisions of Sections 57.31 through 57.43 of Title 62 of the Oklahoma Statutes or into the State of Oklahoma Institutional Building Bonds of 1965 Sinking Fund pursuant to the provisions of Sections 57.61 through 57.73 of Title 62 of the Oklahoma Statutes.
(c) The revenue resulting from the additional tax levied in this section shall be apportioned by the Oklahoma Tax Commission and transmitted to the State Treasurer, who shall deposit the same in the General Revenue Fund of the State of Oklahoma.
(d) The cigarette tax levied in this section shall be collected and administered in all respects not inconsistent with as now or hereafter provided for by law for other cigarette taxes now levied, collected, and administered pursuant to the provisions of Sections 301 through 325 of Title 68 of the Oklahoma Statutes.
Added by Laws 1985, c. 179, § 72, operative Oct. 1, 1985. Amended by Laws 1985, c. 301, § 1, operative Oct. 1, 1985.
§683024. Additional excise tax on cigarettes Rate Apportionment.
(a) In addition to the tax levied in Sections 302, 3021, 3022 and 3023 of Title 68 of the Oklahoma Statutes, there is hereby levied upon the sale, use, gift, possession, or consumption of cigarettes, as defined in Sections 301 through 325 of Title 68 of the Oklahoma Statutes, within the State of Oklahoma a tax at the rate of two and onehalf (2 1/2) mills per cigarette. Such tax shall be evidenced by tax stamps as now provided for; however, as to cigarette packages of less than ten cigarettes for free distribution as samples, the tax herein levied shall be computed and paid as provided for other cigarette taxes without affixing stamps on each such package.
(b) No part of the revenues resulting from the additional tax levied in this section shall be used in determining the amount of cigarette tax collections to be paid into the State of Oklahoma Building Bonds of 1961 Sinking Fund pursuant to the provisions of Sections 57.31 through 57.43 of Title 62 of the Oklahoma Statutes or into the State of Oklahoma Building Bonds of 1965 Sinking Fund pursuant to the provisions of Sections 57.61 through 57.73 of Title 62 of the Oklahoma Statutes.
(c) Except as provided for in this subsection, the revenue resulting from the additional tax levied in this section shall be apportioned by the Oklahoma Tax Commission and transmitted to the State Treasurer, who shall deposit the same in the General Revenue Fund of the State of Oklahoma. Beginning on the effective date of this section, the revenue resulting from the additional tax levied in this section shall be apportioned by the Oklahoma Tax Commission and transmitted to the State Treasurer, who shall deposit the same in the Oklahoma Building Bonds of 1992 Sinking Fund.
(d) The cigarette tax levied in this section shall be collected and administered in all respects not inconsistent with as now or hereafter provided for by law for other cigarette taxes now levied, collected, and administered pursuant to the provisions of Sections 301 through 325 of Title 68 of the Oklahoma Statutes.
Added by Laws 1987, c. 113, § 5, operative June 1, 1987. Amended by Laws 1992, c. 350, § 19.
§68-302-5. Tax on cigarettes in addition to tax levied in Sections 302 to 302-4 - Rate - Apportionment.
A. Effective January 1, 2005, in addition to the tax levied in Sections 302, 3021, 3022, 3023 and 302-4 of Title 68 of the Oklahoma Statutes, there is hereby levied upon the sale, use, gift, possession, or consumption of cigarettes, as defined in Sections 301 through 325 of Title 68 of the Oklahoma Statutes, within this state, a tax at the rate of forty (40) mills per cigarette.
B. Except as provided in subsection D of this section, the revenue resulting from the additional tax levied in subsection A of this section shall be apportioned by the Oklahoma Tax Commission and transmitted to the State Treasurer as follows:
1. Twenty-two and six-hundredths percent (22.06%) shall be placed to the credit of the Health Employee and Economy Improvement Act Revolving Fund created in Section 1 of Enrolled Senate Bill No. 1546 of the 2nd Session of the 49th Oklahoma Legislature;
2. Three and nine-hundredths percent (3.09%) shall be placed to the credit of the Comprehensive Cancer Center Debt Service Revolving Fund created in Section 5 of this act;
3. Seven and fifty-hundredths percent (7.50%) shall be placed to the credit of the Trauma Care Assistance Revolving Fund created in Section 1-2522 of Title 63 of the Oklahoma Statutes;
4. Three and nine-hundredths percent (3.09%) shall be placed to the credit of the Oklahoma State University College of Osteopathic Medicine Revolving Fund created in Section 6 of this act;
5. Twenty-six and thirty-eight-hundredths percent (26.38%) shall be placed to the credit of the Oklahoma Health Care Authority Medicaid Program Fund created in Section 5020 of Title 63 of the Oklahoma Statutes for the purposes of maintaining programs and services funded under the federal "Jobs and Growth Tax Relief Reconciliation Act of 2003", reimbursing city/county-owned hospitals, increasing emergency room physician rates, and providing TEFRA 134, also known as "Katie Beckett" services;
6. Two and sixty-five-hundredths percent (2.65%) shall be placed to the credit of the Department of Mental Health and Substance Abuse Services Revolving Fund created in Section 2-303 of Title 43A of the Oklahoma Statutes;
7. Forty-four-hundredths of one percent (0.44%) shall be placed to the credit of the Belle Maxine Hilliard Breast and Cervical Cancer Treatment Revolving Fund created in Section 1 of Enrolled House Bill No. 2552 of the 2nd Session of the 49th Oklahoma Legislature;
8. One percent (1%) shall be placed to the credit of the Teachers' Retirement System Revolving Fund created in Section 158 of Title 62 of the Oklahoma Statutes;
9. Two and seven-hundredths percent (2.07%) shall be placed to the credit of the Education Reform Revolving Fund created in Section 41.29b of Title 62 of the Oklahoma Statutes;
10. Sixty-six-hundredths percent (0.66%) shall be placed to the credit of the Tobacco Prevention and Cessation Revolving Fund created in Section 1-105d of Title 63 of the Oklahoma Statutes;
11. Sixteen and eighty-three-hundredths percent (16.83%) shall be placed to the credit of the General Revenue Fund; and
12. For fiscal years beginning July 1, 2004, and ending June 30, 2006, fourteen and twenty-three-hundredths percent (14.23%) shall be apportioned to municipalities and counties that levy a sales tax, in the proportions which total municipal and county sales tax revenue was apportioned by the Tax Commission in the preceding month.
For fiscal years beginning July 1, 2006, and thereafter, the apportionment percentage specified in paragraph 12 of this subsection will be adjusted by dividing the total municipal and county sales tax revenue collected in the calendar year immediately preceding the commencement of the fiscal year by the sum of the state sales tax revenue and total municipal and county sales tax revenue collected in the same year. This ratio shall be divided by the ratio of the total municipal and county sales tax revenue collected in the calendar year beginning January 1, 2004, and ending December 31, 2004, divided by the sum of the state sales tax revenue and total municipal and county sales tax revenue collected in the same year. The resulting quotient shall be multiplied by fourteen and twenty-three-hundredths percent (14.23%) to determine the apportionment percentage for the fiscal year.
For fiscal years beginning July 1, 2006, and thereafter, any adjustment to the percentage of revenues apportioned to municipalities and counties shall be reflected in the percent of revenues apportioned to the General Revenue Fund.
C. The tax shall be evidenced by tax stamps as now provided for; however, as to cigarette packages of less than ten cigarettes for free distribution as samples, the tax herein levied shall be computed and paid as provided for other cigarette taxes without affixing stamps on each such package.
D. The net amount of any revenue resulting from a payment in lieu of excise taxes on cigarettes levied by this section, pursuant to a compact with a federally recognized Indian tribe or nation after deductions for deposits into trust accounts pursuant to such compacts, shall be apportioned by the Tax Commission and transmitted to the State Treasurer as follows:
1. Thirty-three and forty-nine-hundredths percent (33.49%) shall be placed to the credit of the Health Employee and Economy Improvement Act Revolving Fund created in Section 1 of Enrolled Senate Bill No. 1546 of the 2nd Session of the 49th Oklahoma Legislature;
2. Four and sixty-nine-hundredths percent (4.69%) shall be placed to the credit of the Comprehensive Cancer Center Debt Service Revolving Fund created in Section 5 of this act;
3. Eleven and thirty-nine-hundredths percent (11.39%) shall be placed to the credit of the Trauma Care Assistance Revolving Fund created in Section 1-2522 of Title 63 of the Oklahoma Statutes;
4. Four and sixty-nine-hundredths percent (4.69%) shall be placed to the credit of the Oklahoma State University College of Osteopathic Medicine Revolving Fund created in Section 6 of this act;
5. Forty and six-hundredths percent (40.06%) shall be placed to the credit of the Oklahoma Health Care Authority Medicaid Program Fund created in Section 5020 of Title 63 of the Oklahoma Statutes for the purposes of maintaining programs and services funded under the federal "Jobs and Growth Tax Relief Reconciliation Act of 2003", reimbursing city/county-owned hospitals, increasing emergency room physician rates, and providing TEFRA 134, also known as "Katie Beckett" services;
6. Four and one-hundredths percent (4.01%) shall be placed to the credit of the Department of Mental Health and Substance Abuse Services Revolving Fund created in Section 2-303 of Title 43A of the Oklahoma Statutes;
7. Sixty-seven-hundredths percent (0.67%) shall be placed to the credit of the Belle Maxine Hilliard Breast and Cervical Cancer Treatment Revolving Fund created in Section 1 of Enrolled House Bill No. 2552 of the 2nd Session of the 49th Oklahoma Legislature; and
8. One percent (1%) shall be placed to the credit of the Tobacco Prevention and Cessation Revolving Fund created in Section 1-105d of Title 63 of the Oklahoma Statutes.
E. No part of the revenues resulting from the additional taxes levied in this section shall be used in determining the amount of cigarette tax collections to be paid into:
1. The State of Oklahoma Building Bonds of 1961 Sinking Fund pursuant to the provisions of Sections 57.31 through 57.43 of Title 62 of the Oklahoma Statutes;
2. The State of Oklahoma Institutional Building Bonds of 1965 Sinking Fund pursuant to the provisions of Sections 57.61 through 57.73 of Title 62 of the Oklahoma Statutes;
3. The State of Oklahoma Institutional Building Bonds of 1965 Sinking Fund Series C and Series D pursuant to Sections 57.81 through 57.112 of Title 62 of the Oklahoma Statutes;
4. The State of Oklahoma Building Bonds of 1968 Sinking Fund pursuant to the provisions of Sections 57.121 through 57.193 of Title 62 of the Oklahoma Statutes; or
5. The Oklahoma Building Bonds of 1992 Sinking Fund pursuant to the provisions of Sections 57.300 through 57.313 of Title 62 of the Oklahoma Statutes.
F. The cigarette taxes levied in this section shall be collected and administered in all respects not inconsistent with as now or hereafter provided for by law for other cigarette taxes now levied, collected, and administered pursuant to the provisions of Sections 301 through 325 of Title 68 of the Oklahoma Statutes.
Added by Laws 2004, c. 322, § 2, eff. Dec. 1, 2004 (State Question No. 713, Legislative Referendum No. 336, adopted at election held Nov. 2, 2004).
§68-302-6. Cigarette and Tobacco Tax Advisory Committee.
A. There is hereby created the Cigarette and Tobacco Tax Advisory Committee. The Committee shall consist of nine (9) members. Three members shall be appointed by the Governor, three members shall be appointed by the President Pro Tempore of the Senate and three members shall be appointed by the Speaker of the House of Representatives. The initial appointments of each appointing authority shall be made for progressive terms of one (1) through three (3) years so that the term of only one member appointed by each appointing authority expires each calendar year; subsequent appointments shall be for three-year terms. Members shall continue to serve until their successors are appointed. Any vacancy shall be filled in the same manner as the original appointments. Five members shall constitute a quorum. The Committee shall be composed as follows:
1. The Governor shall appoint three members as follows:
a. one member who shall be a retailer of cigarettes and tobacco products licensed by a federally recognized Indian tribe or nation,
b. one member who shall be a nontribal retailer of cigarettes and tobacco products, and
c. one member who shall be a wholesaler of cigarettes and tobacco products;
2. The President Pro Tempore of the Senate shall appoint three members as follows:
a. one member who shall be a retailer of cigarettes and tobacco products licensed by a federally recognized Indian tribe or nation,
b. one member who shall be a nontribal retailer of cigarettes and tobacco products, and
c. one member who shall be primarily engaged in the retail sales of groceries in this state;
3. The Speaker of the House of Representatives shall appoint three members as follows:
a. one member who shall be a retailer of cigarettes and tobacco products licensed by a federally recognized Indian tribe or nation,
b. one member who shall be a nontribal retailer of cigarettes and tobacco products, and
c. one member who shall be primarily engaged in the practice of law or financial services.
B. The Committee shall annually elect a chair and a vice-chair from among its members. The Committee shall meet as desired to review proposed rules of the Oklahoma Tax Commission and discuss other issues relating to the implementation and enforcement of the levy, collections and remittance of taxes on cigarettes and tobacco products in this state.
C. The Committee may recommend to the Oklahoma Tax Commission rules to implement and enforce the provisions of this act and other provisions of law relating to the levy, collection and remittance of taxes on cigarettes and tobacco products in this state. The Tax Commission shall consider comments submitted by the Committee prior to the adoption of a proposed rule. Prior to the adoption of any rule or amendment or revocation of a rule relating to the administration of taxes levied on cigarettes and tobacco products, the Tax Commission shall send notice of any intended action to the members of the Committee. If the intended action relates to permanent rulemaking, such notice shall be given at least thirty (30) days prior to publication of notice of intended rulemaking action required under Section 303 of Title 75 of the Oklahoma Statutes. If the intended action relates to emergency rulemaking, the Tax Commission will provide the Committee as much notice as practicable prior to the rulemaking action. The Committee may submit comments on issues related to the intended rulemaking action including, but not limited to, identifying portions of the industry affected, probable economic impact, and any costs or benefits to the industry.
D. In addition to making recommendations, the Committee may represent the industry in communicating concerns to the Tax Commission about issues related to the levy and remittance of taxes pursuant to Section 301 et seq. of Title 68 of the Oklahoma Statutes and Section 401 et seq. of Title 68 of the Oklahoma Statutes.
E. Members of the Committee shall serve without compensation but may be reimbursed expenses incurred in the performance of their duties by their respective appointing authorities, as provided in the State Travel Reimbursement Act.
Added by Laws 2004, c. 322, § 3, eff. Dec. 1, 2004 (State Question No. 713, Legislative Referendum No. 336, adopted at election held Nov. 2, 2004).
§68303. Purpose of tax Disposition of revenue.
The sale, gift, barter, or exchange of cigarettes, or the having possession of cigarettes for consumption, is hereby declared to be subject to taxation authorized by Section 12 of Article X of the Oklahoma Constitution, and it is the purpose and intention of the State of Oklahoma, and it is the purpose and intention of this article, to provide revenue for the expense of the state government. The revenues, including interest and penalties, collected under this article shall be paid monthly by the Tax Commission to the State Treasurer to be apportioned as follows: Of the amounts specified by law to be used for the payment and discharge of the interest on and the principal of the bonds issued pursuant to the provisions of Sections 57.31 through 57.43, 57.61 through 57.73, 57.81 through 57.92, 57.101 through 57.112, 57.121 through 57.135 and 57.300 through 57.313 of Title 62 of the Oklahoma Statutes or any other law providing for such payment and discharge, any amount in excess of the amount necessary for such payment and discharge shall be deposited in the General Revenue Fund of this state, to be paid out only on direct appropriations of the Legislature of the State of Oklahoma.
Added by Laws 1965, c. 195, § 2, emerg. eff. June 10, 1965. Amended by Laws 1989, c. 279, § 12, operative July 1, 1989; Laws 1992, c. 350, § 20; Laws 1995, c. 337, § 1, eff. July 1, 1995.
§68-304. Licenses - Fees - Conditions - Revocation or suspension.
A. Every manufacturer, wholesaler, warehouseman, jobber or distributor of cigarettes in this state, as a condition of carrying on such business, shall annually secure from the Oklahoma Tax Commission a written license, and shall pay therefor an annual fee of Twenty-five Dollars ($25.00). This license, which will be for the ensuing year, must at all times be displayed in a conspicuous place so that it can be seen. Persons operating more than one place of business must secure a license for each place of business. "Place of business" shall be construed to include the place where orders are received, or where cigarettes are sold. If cigarettes are sold on or from any vehicle, the vehicle shall constitute a place of business and the regular license fee of Twenty-five Dollars ($25.00) shall be paid with respect thereto. However, if the vehicle is owned or operated by a place of business for which the regular Twenty-five Dollars ($25.00) is paid, the annual fee for the license with respect to such vehicle shall be only Ten Dollars ($10.00). The expiration for such vehicle license shall expire on the same date as the current license of the place of business.
Provided, that the Tax Commission shall not authorize the use of a stamp-metering device by any manufacturer, wholesaler, warehouseman, jobber or distributor who does not maintain a warehouse or wholesale establishment or place of business within the State of Oklahoma from which cigarettes are received, stocked and sold and where such metering device is kept and used; but the Tax Commission may, in its discretion, permit the use of such metering device by manufacturers, wholesalers, warehousemen, jobbers or distributors of cigarettes residing wholly within another state where such state permits a licensed Oklahoma resident, manufacturer, wholesaler, warehouseman, jobber or distributor of cigarettes the use of the metering device of such state without first requiring that such manufacturer, wholesaler, warehouseman, jobber or distributor establish a place of business in such other state. The provisions of this subsection relating to metering devices shall not apply to states which do not require the affixing of tax stamps to packages of cigarettes before same are offered for sale in such states.
B. Every retailer in this state, as a condition of carrying on such business, shall secure from the Tax Commission a license and shall pay therefor a fee of Thirty Dollars ($30.00). Such license, which will be for the ensuing three (3) years, must at all times be displayed in a conspicuous place so that it can be seen. Upon expiration of such license, the retailer to whom such license was issued may obtain a renewal license which shall be valid for three (3) years or until expiration of the retailer's sales tax permit, whichever is earlier, after which a renewal license shall be valid for three (3) years. The manner and prorated fee for renewals shall be prescribed by the Tax Commission. Every person operating under such license as a retailer and who owns or operates more than one place of business must secure a license for each place of business. "Place of business" shall be construed to include places where orders are received or where cigarettes are sold.
C. Every distributing agent shall, as a condition of carrying on such business, pursuant to written application on a form prescribed by and in such detailed form as the Tax Commission may require, annually secure from the Tax Commission a license, and shall pay therefor an annual fee of One Hundred Dollars ($100.00). An application shall be filed and a license obtained for each place of business owned or operated by a distributing agent. The license, which will be for the ensuing year, shall be consecutively numbered, nonassignable and nontransferable, and shall authorize the storing and distribution of unstamped cigarettes within this state when such distribution is made upon interstate orders only.
D. 1. All wholesale, retail, and distributing agent's licenses shall be nonassignable and nontransferable from one person to another person. Such licenses may be transferred from one location to another location after an application has been filed with the Tax Commission requesting such transfer and after the approval of the Tax Commission.
2. Wholesale, retail, and distributing agent's licenses shall be applied for on a form prescribed by the Tax Commission. Any person operating as a wholesaler, retailer, or distributing agent must at all times have an effective unexpired license which has been issued by the Tax Commission. If any such person or licensee continues to operate as such on a license issued by the Tax Commission which has expired, or operates without ever having obtained from the Tax Commission such license, such person or licensee shall, after becoming delinquent for a period in excess of fifteen (15) days, pay to the Tax Commission, in addition to the annual license fee, a penalty of twenty-five cents ($0.25) per day on each delinquent license for each day so operated in excess of fifteen (15) days. The penalty provided for herein shall not exceed the annual license fee for such license.
E. No license may be granted, maintained or renewed if any of the following conditions applies to the applicant. For purposes of this section, "applicant" includes any combination of persons owning directly or indirectly, in the aggregate, more than ten percent (10%) of the ownership interests in the applicant:
1. The applicant owes Five Hundred Dollars ($500.00) or more in delinquent cigarette taxes;
2. The applicant had a cigarette manufacturer, retailer or distributor license revoked by the Tax Commission within the past two (2) years;
3. The applicant has been convicted of a crime relating to stolen or counterfeit cigarettes, or receiving stolen or counterfeit cigarettes;
4. If the applicant is a cigarette manufacturer, the applicant is neither:
a. a participating manufacturer as defined in Section II (jj) of the Master Settlement Agreement as defined in Section 600.22 of Title 37 of the Oklahoma Statutes, nor
b. in full compliance with the provisions of paragraph 2 of subsection A of Section 600.23 of Title 37 of the Oklahoma Statutes;
5. If the applicant is a cigarette manufacturer, if any cigarette imported by such applicant is imported into the United States in violation of 19 U.S.C., Section 1681a; or
6. If the applicant is a cigarette manufacturer, if any cigarette imported or manufactured by the applicant does not fully comply with the Federal Cigarette Labeling and Advertising Act, 15 U.S.C., Section 1331 et seq.
F. No person or entity licensed pursuant to the provisions of this section shall purchase cigarettes from or sell cigarettes to a person or entity required to obtain a license unless such person or entity has obtained such license.
G. In addition to any civil or criminal penalty provided by law, upon a finding that a licensee has violated any provision of Section 301 et seq. of this title, the Tax Commission may revoke or suspend the license or licenses of the licensee pursuant to the procedures applicable to revocation of a license set forth in Section 316 of this title.
H. The Tax Commission shall create and maintain a web site setting forth all current valid licenses and the identity of licensees holding such licenses, and shall update the site no less frequently than once per month.
Added by Laws 1965, c. 195, § 2, emerg. eff. June 10, 1965. Amended by Laws 1988, c. 47, § 14, operative July 1, 1988; Laws 1991, c. 342, § 10, emerg. eff. June 15, 1991; Laws 1994, c. 278, § 8, eff. Sept. 1, 1994; Laws 1995, c. 1, § 24, emerg. eff. March 2, 1995; Laws 2003, c. 475, § 2, eff. Nov. 1, 2003; Laws 2005, c. 479, § 6, eff. July 1, 2005.
NOTE: Laws 1994, c. 258, § 6 repealed by Laws 1995, c. 1, § 40, emerg. eff. March 2, 1995.
§68-305. Stamps required.
A. Every wholesaler, jobber, distributor, or warehouseman doing business within this state and required to secure a license as provided under Section 304 of this title shall, upon withdrawal from storage, and before making any sale or distribution of cigarettes for consumption thereof, affix or cause the same to have affixed thereto the stamp or stamps as required by Section 301 et seq. of this title. It shall be the duty of the wholesaler, jobber, distributor, or warehouseman to supply and charge to the retailer the necessary stamps to cover any and all drop shipments of cigarettes billed to the retailer or consumer by the wholesaler, jobber, distributor, or warehouseman; and the wholesaler, jobber, distributor, or warehouseman shall be liable to the Oklahoma Tax Commission to perform this service. Distributors may apply stamps only to cigarette packages that they have received directly from a manufacturer or importer of cigarettes who possesses a valid and current permit under Section 5712 of Title 26 of the United States Code.
B. Every retailer who has received cigarettes from a manufacturer, wholesaler, jobber, warehouseman or distributor not required to secure a license as provided for under Section 304 of this title, or to affix stamps as required under subsection A of this section, shall, within seventy-two (72) hours, excluding Sundays and holidays, from the time such cigarettes come into the retailer's possession, and before making any sale or distribution for consumption thereof, affix stamps upon all cigarette packages in the proper denomination and amount, as required by Section 302 of this title.
C. Any unlicensed consumer who buys direct from any distributor, jobber, manufacturer, warehouseman, or wholesaler, or other person, within or without this state, any cigarettes in excess of forty, at any one time to which are not affixed the stamps required by Section 301 et seq. of this title shall, before purchasing such cigarettes, secure from the Tax Commission a written license and shall pay therefor an annual fee of Twenty-five Dollars ($25.00), and shall immediately, upon the receipt of any unstamped cigarettes, report the same to the Tax Commission on such forms as the Tax Commission may prescribe, and immediately purchase from the Tax Commission proper stamps and attach the same to all such cigarettes received. It shall be unlawful for any person to sell or consume cigarettes on which the tax, as levied by Section 301 et seq. of this title, has not been paid, and which are not contained in packages to which are securely affixed the stamps evidencing payment of the tax imposed by Section 301 et seq. of this title.
D. If, upon examination of invoices or from other investigations, the Tax Commission finds that cigarettes have been sold without stamps affixed as required by Section 301 et seq. of this title, the Tax Commission shall have the power to require such person to pay to the Tax Commission a sum equal to twice the amount of the tax due. If, under the same circumstances, a person is unable to furnish evidence to the Tax Commission of sufficient stamp purchases to cover unstamped cigarettes purchased, the prima facie presumption shall arise that such cigarettes were sold without proper stamps being affixed thereto.
E. 1. All unstamped cigarettes upon which taxes are imposed by Section 301 et seq. of this title and all cigarettes stamped, sold, offered for sale, or imported into this state in violation of the provisions of Section 305.1 of this title which shall be found in the possession, custody, or control of any person, for the purpose of being consumed, sold or transported from one place to another in this state, for the purpose of evading or violating the provisions of Section 301 et seq. of this title, or with intent to avoid payment of the tax imposed hereunder, and any automobile, truck, conveyance, or other vehicle whatsoever used in the transportation of such cigarettes, and all paraphernalia, equipment or other tangible personal property incident to the use of such purposes, found in the place, building, vehicle or vehicles, where such cigarettes are found, may be seized by any authorized agent of the Tax Commission, or any sheriff, deputy sheriff, constable or other peace officer within the state, without process. The same shall be, from the time of such seizure, forfeited to the State of Oklahoma, and a proper proceeding filed in a court of competent jurisdiction in the county of seizure, to maintain such seizure and prosecute the forfeiture as herein provided.
2. All such cigarettes, vehicles and property so seized shall first be listed and appraised by the officer making such seizure and turned over to the county sheriff of the county in which the seizure is made and a receipt therefor taken. The person making such seizure shall immediately make and file a written report thereof, showing the name of the person making such seizure, the place, and the person where, and from whom such property was seized, and an inventory and appraisement thereof, at the usual and ordinary retail price of such articles received, to the Tax Commission, or the Attorney General, in the case of cigarettes stamped, sold, offered for sale, or imported into this state in violation of the provisions of Section 305.1 of this title. The district attorney of the county in which the seizures are made shall, at the request of the Tax Commission or Attorney General, file in the district court forfeiture proceedings in the name of the State of Oklahoma, as plaintiff, and in the name of the owner or person in possession, as defendant, if known, and if unknown in the name of the property seized. The clerk of the court shall issue summons to the owner or person in whose possession such property was found, directing the owner or person to answer within ten (10) days. If the property is declared forfeited and ordered sold, notice of the sale shall be posted in five public places in the county not less than ten (10) days before the date of sale; provided, cigarette packages or containers as described in Section 305.1 of this title shall only be sold for export outside the United States or as otherwise permitted by federal law. The proceeds of the sale shall be deposited with the clerk of the court, who shall after deducting costs, including the costs of sale, pay the balance to the Tax Commission as cigarette tax collected, or in the case of cigarettes seized as being in violation of the provisions of Section 305.1 of this title, to the Attorney General. The Attorney General shall remit the amount of cigarette tax, if any be due, including all penalties and interest due, to the Tax Commission as cigarette tax collected and shall deposit the remainder to the revolving fund created in Section 305.2 of this title.
3. The seizure and sale of cigarettes shall not relieve the person from whom such cigarettes were seized from any prosecution or the payment of any penalties provided for under Section 301 et seq. of this title; nor shall it relieve the purchaser thereof from any payment of the regular cigarette tax and the placing of proper stamps thereon before making any sale of the cigarettes or the personal consumption of the same.
4. The forfeiture provisions of Section 301 et seq. of this title shall only apply to persons having possession of or transporting cigarettes with intent to barter, sell or give away the same; provided, that such possession of cigarettes in any quantity of five or more cartons of ten packages each shall be prima facie evidence of intent to barter, sell or give away such cigarettes in violation of the provisions of Section 301 et seq. of this title.
F. The Tax Commission shall exchange new stamps for any stamps which are damaged, or for stamps which have been affixed to packages of cigarettes returned to factories, or shipped to other states, or sold to government agencies or state institutions, or for stamps purchased in excess of floor stocks. Application to the Tax Commission for such exchanges must be accompanied by affidavit, damaged stamps, bill of lading covering shipment to factory or other states, or other proof required by the Tax Commission. Any person to whom stamps shall be issued under this paragraph may, upon approval of the Tax Commission, sell such stamps to any wholesaler as defined in Section 301 et seq. of this title.
G. Any person, including distributing agents, wholesalers, jobbers, carriers, warehousemen, retailers and consumers, having possession of unstamped cigarettes in this state shall be liable for the tax on such cigarettes in case the same are lost, stolen or unaccounted for, in transit, storage or otherwise, and in such event a presumption shall exist for the purposes of taxation, that such cigarettes were used and consumed in Oklahoma.
Added by Laws 1965, c. 195, § 2, emerg. eff. June 10, 1965. Amended by Laws 1994, c. 278, § 9, eff. Sept. 1, 1994; Laws 1999, c. 162, § 1, eff. June 16, 1999; Laws 2003, c. 475, § 3, eff. Nov. 1, 2003.
§68-305.1. Unlawful affixing of stamp - Prima facie evidence of violation.
A. It shall be unlawful to affix a stamp to any cigarette package or container or to sell, offer for sale, or import into this state any cigarette package or container:
1. Which bears any label or notice prescribed by the United States Department of Treasury to identify cigarettes intended for export and exempt from tax by the United States pursuant to Section 5704(b) of Title 26 of the United States Code or any notice or label described in Section 290.185 of Title 27 of the United States Code of Federal Regulations;
2. Which is not labeled in conformity with the provisions of the Federal Cigarette Labeling and Advertising Act, or any other federal requirement for the placement of labels, warnings or other information applicable to packages or containers of cigarettes intended for domestic consumption;
3. Upon which all federal taxes due have not been paid or which is not in compliance with all federal trademark and copyright laws; or
4. The packaging of which has been modified or altered by a person other than the manufacturer or person specifically authorized by the manufacturer, including, but not limited to, the placement of a sticker or label to cover information on the package or container.
Possession of more than one thousand cigarettes in packages or containers bearing Oklahoma stamps in violation of this subsection by a person other than an employee of this state or the federal government performing official duties relating to enforcement of the provisions of Section 301 et seq. of this title shall constitute prima facie evidence of a violation of the provisions of this subsection.
B. Except as otherwise provided by law, the Attorney General shall enforce the provisions of this section.
Added by Laws 1999, c. 162, § 2, eff. June 17, 1999.
§68-305.2. Revolving fund for Office of Attorney General.
There is hereby created in the State Treasury a revolving fund for the Office of the Attorney General. The fund shall be a continuing fund, not subject to fiscal year limitations, and shall consist of all monies received by the Office of the Attorney General pursuant to the provisions of Sections 305, 316, 417 and 418 of Title 68 of the Oklahoma Statutes. All monies accruing to the credit of the fund are hereby appropriated and may be budgeted and expended by the Office of the Attorney General. Expenditures from the fund shall be made upon warrants issued by the State Treasurer against claims filed as prescribed by law with the Director of State Finance for approval and payment.
Added by Laws 1999, c. 162, § 7, eff. June 17, 1999.
§68306. Sale, when tax not paid or stamps not affixed.
It shall be unlawful for any person to sell, or display for sale, or have in his possession for consumption in this state, cigarettes on which the tax levied by this article has not been paid, and which are not contained in packages to which are securely affixed the stamps evidencing payment of the tax. Any cigarettes so held shall be subject to seizure and sale as provided by law for sale of property under execution, and the proceeds derived from the sale thereof shall be paid to the State Treasurer and placed in the State General Revenue Fund.
Laws 1965, c. 195, § 2.
§68307. Consumer bringing cigarettes from without state as retailer.
A consumer who secures cigarettes from without the state and has same brought into the state by a common carrier or otherwise shall be held to be a retailer, and its, his or her place of business shall be deemed the point within the state at which the cigarettes are received. Such person holding himself out as consumer and purchasing cigarettes in a larger quantity than forty shall be subject to the same provisions, rules and regulations with respect to cigarettes as are by this article imposed upon retailers.
Laws 1965, c. 195, § 2.
§68308. Purchase, manufacture, custody and sale of stamps.
(a) The stamps placed upon packages of cigarettes shall be purchased by the Commission in proper denominations, shall contain the words "Oklahoma Tax Commission," and shall be of such design, character, color combinations, color changes, sizes and material as the Commission may, by its rules and regulations, determine to afford the best security to the state. The Commission may require of the manufacturer from whom it purchases such stamps a bond in an amount to be determined by the Commission, containing such conditions as the Commission may deem necessary in order to protect the state against loss. The Commission shall be responsible for the custody and sale of the stamps, and for the disposition of the proceeds thereof. It shall be the duty of the Tax Commission to manufacture or contract for revenue stamps required by this article; provided, that if such stamps are contracted for, the manufacture thereof shall be within the jurisdiction of the criminal and civil courts of this state, unless such stamps cannot be obtained in this state at a fair price or of acceptable quality. If stamps are manufactured outside of the state, then the Commission shall keep a reliable agent at the place of manufacture during the period of manufacture and such agent shall be authorized and instructed to take any and all precautions necessary to safeguard the state against forgery and misdelivery of any stamps. The Commission shall, in contracting for manufacture, consider the safeguarding of stamps to be of paramount importance and shall provide therefor in a manner commensurate with the monetary value of such stamps.
(b) The Tax Commission shall, under rules and regulations promulgated by the Commission, exchange new stamps or give credit for any stamps affixed to any cigarettes which stamps have become unfit for use or consumption or unsalable.
(c) Any person to whom stamps shall be issued hereunder may, upon notice and approval of the Tax Commission, sell such stamps to any licensed manufacturer, wholesaler, warehouseman, jobber and/or retailer.
(d) The Commission shall sell the stamps to all licensed manufacturers, wholesalers, warehousemen and/or jobbers, retailers, or consumers, who have purchased cigarettes from wholesalers or jobbers within or without the State of Oklahoma, doing business within the State of Oklahoma. All orders for stamps must be accompanied by cash, cashier's check or money order, made payable to the Oklahoma Tax Commission; provided, however, that the Tax Commission may accept personal checks in payment for such stamps upon a determination by the Commission that the purchaser thereof is financially responsible.
Laws 1965, c. 195, § 2.
§68309. Common carriers transporting cigarettes.
(a) The right of a common carrier in this state to carry unstamped cigarettes, as defined in this article, shall not be affected by this article; provided that common carriers delivering unstamped cigarettes to any person in this state for the purpose of selling or consuming unstamped cigarettes in this state in violation of Section 301 et seq. of this title or this act shall be subject to seizure of the shipments and forfeiture of the inventory pursuant to the provisions of Section 305 of this title. Should any common carrier sell cigarettes to its passengers while being carried in this state, the sale shall be subject to the stamp tax and other provisions of this article, and to the rules and regulations of the Tax Commission.
(b) Common carriers transporting cigarettes to a point within the state, or a bonded warehouseman or bailee having possession of cigarettes, are required, under this article and the rules and regulations to be prescribed by the Commission, to transmit to the Commission a statement of such consignment of cigarettes, showing the date, point of origin, point of delivery, and to whom delivered, and such other information as the Commission may require. All common carriers, bailees or warehousemen shall permit an examination by the Commission, or its agents or legally authorized representatives, of their records relating to the shipment or receipt of cigarettes. Any person who fails or refuses to transmit to the Commission the statements above provided for, or whoever refuses to permit the examination of the records by the Commission, shall be guilty of a misdemeanor.
Laws 1965, c. 195, § 2, emerg. eff. June 10, 1965; Laws 1992, c. 339, § 15, eff. Jan. 1, 1993.
§68-310. Repealed by Laws 1994, c. 278, § 38, eff. Sept. 1, 1994.
§68311. Sale of stamps to wholesalers or jobbers at discount as compensation for costs incurred.
For the purpose of allowing compensation for the costs necessarily incurred in affixing the proper tax stamp to each package of cigarettes and tobacco before making a sale of such cigarettes and tobacco, each person purchasing cigarette or tobacco tax stamps from the Oklahoma Tax Commission as required by law may purchase stamps from the Tax Commission at a reduction of one and one-half cents ($0.015) per stamp, provided that such discount or reduction shall not be applicable on purchases of less than One Hundred Dollars ($100.00) at any one time; and provided, further, that no discount shall be allowed to outofstate purchasers which reside in the states that do not give discounts on cigarette stamps purchased from State of Oklahoma cigarette dealers. The discount herein provided shall be the only discount allowed to purchasers from the Tax Commission; provided, that if a purchaser refuses to comply with the laws of the State of Oklahoma, the Tax Commission shall require the full face value for stamps purchased until such time as the person has complied with the provisions of the law. The Tax Commission may authorize the use of a metering device for the impress of the tax stamp.
Added by Laws 1965, c. 195, § 2, emerg. eff. June 10, 1965. Amended by Laws 2004, c. 322, § 7, eff. Dec. 1, 2004 (State Question No. 713, Legislative Referendum No. 336, adopted at election held Nov. 2, 2004).
§68312. Records and reports.
(a) Every person subject to the payment of a tax hereunder shall keep in Oklahoma accurate records covering the business carried on and shall for three (3) years, and more if required by the rules and regulations of the Tax Commission, keep and preserve all invoices, showing all purchases and sales of cigarettes; and such invoices and stock of cigarettes shall at all times be subject to the examination and inspection of any member or legally authorized agent or representative of the Commission, in the enforcement of this article. Every wholesaler, jobber, warehouseman or retailer operating in the State of Oklahoma, whose main warehouse or headquarters is in another state shall keep all records of all cigarette transactions made by him at his place of business in Oklahoma, or at a designated place in the State of Oklahoma.
(b) Every wholesaler and retailer receiving unstamped cigarettes shall file a report with the Commission on or before the 10th day of each month covering the previous calendar month, on forms prescribed and furnished by the Commission, disclosing the beginning and closing inventory of unstamped cigarettes, the beginning and closing inventory of stamped cigarettes, the beginning and closing inventory of cigarette stamps, the number and denomination of cigarette stamps affixed to packages of cigarettes, and all purchases of cigarettes by showing the invoice number, name and address of the consignee or seller, the date, and the number of cigarettes purchased, and such other information as may be required by the Tax Commission. Retailers or consumers purchasing cigarettes in drop shipments shall be required to make monthly reports to the Commission as are required of wholesale dealers.
(c) Every distributing agent shall, except as otherwise provided herein, keep at each place of business in Oklahoma for a period of three (3) years for inspection by the Commission a complete record of all cigarettes received by him, including all orders, invoices, bills of lading, waybills, freight bills, express receipts, and all other shipping records which are furnished to the distributing agent by the carrier and the shipper of said cigarettes, or copies thereof, and, in addition thereto, a complete record of each and every distribution or delivery made by said distributing agent. Such records of distribution or delivery shall include all orders, invoices or copies thereof, all other shipping records furnished by the carrier, and the person ordering distribution or delivery of the cigarettes.
(d) Upon a form to be prescribed by the Commission, every distributing agent in Oklahoma shall report each day, except Sundays and holidays, to the Commission all deliveries of cigarettes made on the preceding day or days. The reports shall show the name of the person ordering the delivery, date of delivery, name and address of the person to whom delivered, the invoice number, bill of lading or waybill number, the number and kind of cigarettes delivered, the means of delivery and/or the transportation agent and the destination of drop shipment, if a drop shipment. However, if the invoice furnished the distributing agent by the manufacturer or other person ordering such delivery, or the bill of lading prepared by said distributing agent to cover the shipment under said invoice, contains all the information required to be reported, it will be sufficient to send a copy of said invoice or invoices, or a copy of said bill of lading or bills of lading, to the Commission.
Laws 1965, c. 195, § 2.
§68-312.1. Procedures for maintaining records and filing reports - Required information.
A. The Oklahoma Tax Commission, if in its discretion it deems practical and reasonable, may establish procedures for maintaining records and filing reports containing the information required by this section. The exercise by the Tax Commission of the authority granted in this subsection shall be by adoption of rules necessary to establish procedures that increase compliance with the requirements of this article. If the Tax Commission determines to utilize its discretion, the provisions of subsections B through J of this section shall apply.
B. Every wholesaler and distributor receiving cigarettes shall submit periodic reports containing the information required by this subsection. In each case, the information required shall be itemized so as to disclose clearly the brand style of the product. The reports shall be provided separately with respect to each of the facilities operated by the wholesaler and distributor and shall include:
1. The quantity of cigarette packages that were distributed or shipped to another distributor or to a retailer within the borders of Oklahoma during the reporting period and the name and address of each person to whom those products were distributed or shipped;
2. The quantity of cigarette packages that were distributed or shipped to another facility of the same distributor within the borders of Oklahoma during the reporting period; and
3. The quantity of cigarette packages that were distributed or shipped within the borders of Oklahoma to Indian tribal entities or instrumentalities of the federal government during the reporting period and the name and address of each person to whom those products were distributed or shipped.
C. Manufacturers shall submit periodic reports containing the information required by this subsection. In each case, the information required shall be itemized so as to disclose clearly the brand style of the product. The reports shall be provided separately with respect to each of the facilities operated by the manufacturer and shall include:
1. The quantity of cigarette packages that were distributed or shipped to another manufacturer or to a distributor within the borders of Oklahoma during the reporting period and the name and address of each person to whom those products were distributed or shipped;
2. The quantity of cigarette packages that were distributed or shipped to another facility of the same manufacturer within the borders of Oklahoma during the reporting period; and
3. The quantity of cigarette packages that were distributed or shipped within the borders of Oklahoma to instrumentalities of the federal government during the reporting period and the name and address of each person to whom those products were distributed or shipped.
D. The Tax Commission shall establish the reporting period, which shall be no longer than three (3) calendar months and no shorter than one (1) calendar month. Reports shall be submitted electronically as prescribed by the Tax Commission.
E. Each distributor shall maintain copies of invoices or equivalent documentation for each of its facilities for every transaction in which the distributor is the seller, purchaser, consignor, consignee, or recipient of cigarettes. The invoices or documentation shall show the name, address, phone number and wholesale license number of the consignor, seller, purchaser, or consignee, and the quantity by brand style of the cigarettes involved in the transaction.
F. Each retailer shall maintain copies of invoices or equivalent documentation for every transaction in which the retailer receives or purchases cigarettes at each of its facilities. The invoices or documentation shall show the name and address of the distributor from whom, or the address of another facility of the same retailer from which, the cigarettes were received, the quantity of each brand style received in such transaction and the retail cigarette license number or sales tax license number.
G. Each manufacturer shall maintain copies of invoices or equivalent documentation for each of its facilities for every transaction in which the manufacturer is the seller, purchaser, consignor, consignee, or recipient of cigarettes. The invoices or documentation shall show the name and address of the consignor, seller, purchaser, or consignee, and the quantity by brand style of the cigarettes involved in the transaction.
H. Records required under subsections E through G of this section shall be preserved on the premises described in the license in such a manner as to ensure permanency and accessibility for inspection at reasonable hours by authorized personnel of the Oklahoma Tax Commission. With the permission of the Tax Commission, manufacturers, distributors, and retailers with multiple places of business may retain centralized records, but shall transmit duplicates of the invoices or the equivalent documentation to each place of business within twenty-four (24) hours upon the request of the Tax Commission.
I. The records required by subsections E through G of this section shall be retained for a period of three (3) years from the date of the transaction.
J. The Tax Commission, upon request, shall have access to reports and records required under this act. The Tax Commission at its sole discretion may share the records and reports required by such sections with law enforcement officials of the federal government, other states, or international authorities.
Added by Laws 2003, c. 475, § 4, eff. Nov. 1, 2003. Amended by Laws 2005, c. 479, § 7, eff. July 1, 2005.
§68313. Wholesale and retail stocks to be kept separate.
(a) Any person holding under this article a wholesale and retail license, and whose wholesale and retail business is conducted within the same building, or a building adjoining thereto, shall keep separate the wholesale and retail stocks of cigarettes.
(b) Every wholesaler or jobber who maintains a retail business at his place of business shall keep a record of the wholesale operations the same as for the retail operations, and keep such records, including invoices, separate and apart for the inspection of such wholesale and retail business by the Commission, said records to show the amount of stamps purchased, if any, and all purchases from whatever source, and all sales, whether to himself as a retailer, from himself as a wholesaler, or to another than himself as a retailer. All invoices, records, files and other information shall be available for inspection by representatives of the Commission for a period of three (3) years from the date of the purchase and/or delivery.
(c) If such invoices, records, files and information are not kept as herein required, the licenses, both as retailer and as wholesaler or jobber, shall be revoked, and such person shall be subject to all penalties as provided for in this article. If a licensee refuses to comply with the provisions of this article, the Commission shall cancel all licenses that have been issued for such place of business.
Laws 1965, c. 195, § 2.
§68314. Salesmen for manufacturers Records and reports.
(a) Salesmen in the employ of a manufacturer, and handling only the products of his employer, who engage in the business of selling or distributing cigarettes in this state for the purpose of resale, shall be required to keep the same records, for a period of three (3) years, for the inspection at all times by the Commission, as are required of wholesale dealers. Such salesmen shall also be required to furnish monthly reports to the Commission of the business of the previous month. However, salesmen having a district supervisor or division manager may make their monthly reports to the Commission through the division manager or district supervisor.
(b) Any such salesman who takes orders for cigarettes to be shipped in interstate commerce to any person other than licensed dealers shall also be required to have a distributing agent's license and be compelled to comply with all of the rules and regulations pertaining to distributing agents.
Laws 1965, c. 195, § 2.
§68315. Inspections and examinations.
For the purpose of enabling the Oklahoma Tax Commission to determine the tax liability of a distributor, wholesale dealer, retail dealer, distributing agent or any other person dealing in cigarettes, or to determine whether a tax liability has been incurred, it shall have the right to inspect any premises where cigarettes are manufactured, produced, made, stored, transported, sold, or offered for sale or exchange, and to examine all of the records required herein to be kept or any other records that may be kept incident to the conduct of the cigarette business of such distributor, wholesale dealer, retail dealer, distributing agent, or any other person dealing in cigarettes. The authorized agent of the Oklahoma Tax Commission shall also have the right, as an incident, to determine the said tax liability, or whether a tax liability has been incurred, to examine all stocks of cigarette stamps, and for the foregoing purpose such authorized agent shall also have the right to remain upon the premises for such length of time as may be necessary to fully determine such tax liability, or whether a tax liability has been incurred; and it shall be unlawful for any of the foregoing persons to fail to produce upon demand by the Tax Commission, or any of its authorized agents, any records herein required to be kept, or to hinder or prevent in any manner the inspection of said records, or the examination of said premises.
Added by Laws 1965, c. 195, § 2, emerg. eff. June 10, 1965.
§68-316. Offenses - Penalties.
A. Any person who shall:
1. Sell, offer for sale or present as a prize or gift cigarettes without a stamp being then and there affixed to each individual package;
2. Sell cigarettes in quantities less than an individual package;
3. Knowingly consume, use or smoke any cigarettes upon which a tax is required to be paid without a stamp being affixed upon each individual package;
4. Knowingly cancel or mutilate any stamp affixed to any individual package of cigarettes for the purpose of concealing any violation of Section 301 et seq. of this title or with any other fraudulent intent;
5. Use any artful device or deceptive practice to conceal any violation of Section 301 et seq. of this title;
6. Refuse to surrender to the Oklahoma Tax Commission upon demand any cigarettes possessed in violation of any provision of Section 301 et seq. of this title; or
7. Make a first sale of cigarettes without a stamp being then and there affixed to each individual package;
shall be guilty of a misdemeanor, and upon conviction thereof shall be fined not more than Two Hundred Dollars ($200.00), where specific penalties are not otherwise provided.
B. Any distributor, wholesale dealer, retail dealer or distributing agent who shall:
1. Commit any of the acts specifically enumerated in subsection A of this section, where such acts are applicable to such person;
2. Sell any cigarettes upon which tax is required to be paid by Section 301 et seq. of this title without at the time of making such sale having a valid license;
3. Make a first sale of cigarettes without at the time of first sale having a license posted so as to be easily seen by the public; or
4. Fail to deliver an invoice required by law to a purchaser of cigarettes;
shall be guilty of a misdemeanor, and upon conviction thereof shall be punished by a fine of not more than Two Hundred Dollars ($200.00), where specific penalties are not otherwise provided.
C. Any distributing agent who shall:
1. Commit any of the acts specifically enumerated in subsections A and B of this section where such provisions are applicable to such distributing agent; or
2. Store any unstamped cigarettes in the state or deliver or distribute any unstamped cigarettes within this state, without at the time of storage or delivery having a valid license posted so as to be easily seen by the public;
shall be guilty of a misdemeanor, and upon conviction shall be punished by a fine of not more than Two Hundred Dollars ($200.00).
D. Any retailer violating the provisions of Section 305.1 of this title shall:
1. For a first offense, be punished by an administrative fine of not more than One Hundred Dollars ($100.00);
2. For a second offense, be punished by an administrative fine of not more than One Thousand Dollars ($1,000.00); and
3. For a third or subsequent offense, be punished by an administrative fine of not more than Five Thousand Dollars ($5,000.00).
E. Any wholesaler, jobber or warehouseman violating the provisions of Section 305.1 of this title shall:
1. For a first offense, be punished by an administrative fine of not more than Five Thousand Dollars ($5,000.00); and
2. For a second or subsequent offense, be punished by an administrative fine of not more than Twenty Thousand Dollars ($20,000.00).
Administrative fines collected pursuant to the provisions of this subsection shall be deposited to the revolving fund created in Section 305.2 of this title.
F. The Tax Commission shall immediately revoke the license of a person punished for a violation pursuant to the provisions of paragraph 3 of subsection D of this section or a person punished for a violation pursuant to the provisions of subsection E of this section. A person whose license is so revoked shall not be eligible to receive another license pursuant to the provisions of Section 301 et seq. of this title for a period of ten (10) years.
G. Whoever, with intent to defraud Oklahoma:
1. Fails to keep or make any record, return, report, or inventory, or keeps or makes any false or fraudulent record, return, report, or inventory, required by Section 301 et seq. of this title or rules promulgated thereunder;
2. Refuses to pay any tax imposed by Section 301 et seq. of this title, or attempts in any manner to evade or defeat the tax or the payment thereof; or
3. Fails to comply with any requirement of Section 301 et seq. of this title;
shall, for each such offense, be fined not more than Ten Thousand Dollars ($10,000.00), or imprisoned not more than five (5) years, or both.
H. Whoever knowingly omits, neglects, or refuses to comply with any duty imposed upon the person by Section 301 et seq. of this title, or to do, or cause to be done, any of the things required by Section 301 et seq. of this title, or does anything prohibited by Section 301 et seq. of this title, shall, in addition to any other penalty provided in Section 301 et seq. of this title, pay an administrative penalty of One Thousand Dollars ($1,000.00).
I. Whoever fails to pay any tax imposed by Section 301 et seq. of this title at the time prescribed by law or rules, shall, in addition to any other penalty provided in Section 301 et seq. of this title, be liable to a penalty of five hundred percent (500%) of the tax due but unpaid.
J. 1. All cigarettes which are held for sale or distribution within the borders of Oklahoma, in violation of the requirements of Section 301 et seq. of this title, and the machinery used to manufacture counterfeit cigarettes shall be forfeited to Oklahoma. All cigarettes and machinery forfeited to Oklahoma under this paragraph shall be destroyed.
2. All fixtures, equipment, and all other materials and personal property on the premises of any distributor or retailer who, with intent to defraud the state, fails to keep or make any record, return, report, or inventory; keeps or makes any false or fraudulent record, return, report, or inventory required by Section 301 et seq. of this title; refuses to pay any tax imposed by Section 301 et seq. of this title; or attempts in any manner to evade or defeat the requirements of Section 301 et seq. of this title shall be forfeited to Oklahoma.
K. Notwithstanding any other provision of law, the sale or possession for sale of counterfeit cigarettes, or the sale or possession for sale of counterfeit cigarettes by a manufacturer, distributor, or retailer shall result in the seizure of the product and related machinery by the Tax Commission or any law enforcement agency and shall be punishable as follows:
1. A first violation with a total quantity of less than two cartons of cigarettes or the equivalent amount of other cigarettes shall be punishable by a fine not to exceed One Thousand Dollars ($1,000.00) or imprisonment not to exceed five (5) years, or both fine and imprisonment;
2. A subsequent violation with a total quantity of less than two cartons of cigarettes, or the equivalent amount of other cigarettes shall be punishable by a fine not to exceed Five Thousand Dollars ($5,000.00), or imprisonment not to exceed five (5) years, or both the fine and the imprisonment, and shall also result in the revocation by the Tax Commission of the manufacturer, distributor, or retailer license;
3. A first violation with a total quantity of more than two cartons of cigarettes, or the equivalent amount of other cigarettes, shall be punishable by a fine not to exceed Two Thousand Dollars ($2,000.00) or imprisonment not to exceed five (5) years, or both the fine and imprisonment; and
4. A subsequent violation with a quantity of two cartons of cigarettes or more, or the equivalent amount of other cigarettes shall be punishable by a fine not to exceed Fifty Thousand Dollars ($50,000.00) or imprisonment not to exceed five (5) years, or both the fine and imprisonment, and shall also result in the revocation by the Tax Commission of the manufacturer, distributor, or retailer license.
For the purposes of this section, "counterfeit cigarettes" includes cigarettes that have false manufacturing labels or tobacco product packs without tax stamps or with counterfeit tax stamps or a combination thereof. Any counterfeit cigarette seized by the Tax Commission shall be destroyed.
Added by Laws 1965, c. 195, § 2, emerg. eff. June 10, 1965. Amended by Laws 1999, c. 162, § 3, eff. June 16, 1999; Laws 2003, c. 475, § 5, eff. Nov. 1, 2003.
§68-317. Unlawful sale, use and manufacture of stamps, impressions, etc. - Forgery - Counterfeiting.
(a) Any person who shall, without the authorization of the Tax Commission, make or manufacture, or who shall falsely or fraudulently forge, counterfeit, reproduce, or possess any stamps, impression, copy, facsimile, or other evidence for the purpose of indicating the payment of the tax levied by the Cigarette Stamp Tax Law, Sections 301 through 325, Title 68 of the Oklahoma Statutes, prescribed for use in the administration of this article, or who shall knowingly or by any deceptive act use or pass, or tender as true, or affix, impress or imprint, by use of any device, rubber stamp or by any other means, on any package containing cigarettes, any unauthorized, false, altered, forged, counterfeit or previously used stamps, impressions, copies, facsimiles or other evidence of cigarette tax payment, shall be guilty of a felony, and upon conviction thereof shall be punished by imprisonment in the State Penitentiary for a term of not more than twenty (20) years, or by a fine of not more than Ten Thousand Dollars ($10,000.00), or by both such imprisonment and fine.
(b) Each person violating any other provision of this article shall be guilty of a misdemeanor, and upon conviction thereof shall be punished by imprisonment in the county jail for a period of not more than twelve (12) months, or by a fine of not more than Five Hundred Dollars ($500.00), or by both such imprisonment and fine.
Added by Laws 1965, c. 195, § 2, emerg. eff. June 10, 1965. Amended by Laws 1971, c. 52, § 1, emerg. eff. March 31, 1971; Laws 1997, c. 133, § 556, eff. July 1, 1999; Laws 1999, 1st Ex.Sess., c. 5, § 405, eff. July 1, 1999.
NOTE: Laws 1998, 1st Ex.Sess., c. 2, § 23 amended the effective date of Laws 1997, c. 133, § 556 from July 1, 1998, to July 1, 1999.
§68-317.1. Delivery sale to underage individual.
A. No person shall make a delivery sale of cigarettes to any individual who is under the legal minimum purchase age in this state.
B. Each person taking a delivery sale order shall comply with:
1. The age verification requirements set forth in Section 7 of this act;
2. The disclosure requirements set forth in Section 8 of this act;
3. The shipping requirements set forth in Section 9 of this act;
4. The registration and reporting requirements set forth in Section 10 of this act;
5. The tax collection requirements set forth in Section 11 of this act; and
6. All other laws of Oklahoma generally applicable to sales of cigarettes that occur entirely within Oklahoma, including, but not limited to, those laws imposing:
a. excise taxes,
b. sales taxes,
c. licensing and tax-stamping requirements, and
d. escrow or other payment obligations.
Added by Laws 2003, c. 475, § 6, eff. Nov. 1, 2003.
§68-317.2. Requirements for delivery sale - Certification from prospective customer - Verification of information provided - Notice.
A. No person shall mail, ship or otherwise deliver cigarettes in connection with a delivery sale unless, prior to the first delivery sale to such consumer, the person:
1. Obtains from the prospective customer a certification which includes:
a. reliable confirmation that the purchaser is at least the legal minimum purchase age, and
b. a statement signed by the prospective purchaser in writing and under penalty of perjury which:
(1) certifies the prospective purchaser's address and date of birth, and
(2) confirms that the prospective purchaser understands:
(i) that signing another person's name to such certification is illegal,
(ii) that sales of cigarettes to individuals under the legal minimum purchase age are illegal,
(iii) that the purchase of cigarettes by individuals under the legal minimum purchase age is illegal under the laws of Oklahoma, and
(iv) that the prospective consumer wants to receive mailings from a tobacco company;
2. Makes a good-faith effort to verify the information contained in the certification provided by the prospective purchaser pursuant to paragraph 1 of this subsection against a commercially available database or obtains a photocopy or other image of the valid, government-issued identification stating the date of birth or age of the individual placing the order;
3. Provides to the prospective purchaser, via e-mail or other means, a notice which meets the requirements of Section 8 of this act and requests confirmation that the delivery sale order was placed by the prospective purchaser; and
4. In the case of an order for cigarettes pursuant to an advertisement on the Internet, receives payment for the delivery sale from the prospective purchaser by a credit or debit card that has been issued in such purchaser's name or by check.
B. Persons taking delivery sale orders may request that prospective purchasers provide their e-mail addresses.
Added by Laws 2003, c. 475, § 7, eff. Nov. 1, 2003.
§68-317.3. Contents of notice.
The notice required under paragraph 3 of subsection A of Section 7 of this act shall include:
1. A prominent and clearly legible statement that cigarette sales to individuals below the legal minimum purchase age are illegal;
2. A prominent and clearly legible statement that consists of one of the warnings set forth in Section 4(a)(1) of the Federal Cigarette Labeling and Advertising Act, 15 U.S.C., Section 1333(a)(1), rotated on a quarterly basis;
3. A prominent and clearly legible statement that sales of cigarettes are restricted to those individuals who provide verifiable proof of age in accordance with Section 8 of this act; and
4. A prominent and clearly legible statement that cigarette sales are taxable under Section 301 et seq. of Title 68 of the Oklahoma Statutes, and an explanation of how such tax has been, or is to be, paid with respect to such delivery sale.
Added by Laws 2003, c. 475, § 8, eff. Nov. 1, 2003.
68-317.4. Mailing or shipping - Documents - Conspicuous statement - Proof of legal minimum purchase age - Proof of collection and remission of tax.
A. Each person who mails, ships or otherwise delivers cigarettes in connection with a delivery sale:
1. Shall include as part of the shipping documents a clear and conspicuous statement providing as follows: "CIGARETTES: OKLAHOMA LAW PROHIBITS SHIPPING TO INDIVIDUALS UNDER THE AGE OF EIGHTEEN, AND REQUIRES THE PAYMENT OF ALL APPLICABLE TAXES";
2. Shall use a method of mailing or shipping that obligates the delivery service to require:
a. the purchaser placing the delivery sale, or another adult of legal minimum purchase age residing at the purchaser's address, to sign to accept delivery of the shipping container, and
b. proof, in the form of a valid, government-issued identification bearing a photograph of the individual who signs to accept delivery of the shipping container, demonstrating that such person is either the addressee or another adult of legal minimum purchase age residing at the purchaser's address, but such proof shall be required only if that individual appears to be under twenty-seven (27) years of age; and
3. Shall provide to the delivery service retained to deliver such delivery sale evidence of full compliance with Section 11 of this act.
B. If the person taking a purchase order for delivery sale delivers the cigarettes without using a delivery service, such person shall comply with all requirements of this act applicable to a delivery service and shall be in violation of this act if it fails to comply with any such requirement.
Added by Laws 2003, c. 475, § 9, eff. Nov. 1, 2003.
§68-317.5. Filings with Tax Commission.
A. Prior to making delivery sales or mailing, shipping, or otherwise delivering cigarettes in connection with any such sales, every person shall file with the Oklahoma Tax Commission a statement setting forth such person's name, trade name, and the address of such person's principal place of business and any other place of business.
B. Not later than the tenth day of each calendar month, each person that has made a delivery sale or mailed, shipped or otherwise delivered cigarettes in connection with any such sale during the previous calendar month shall file with the Tax Commission a memorandum or a copy of the invoice which provides for each and every such delivery sale:
1. The name and address of the individual to whom such delivery sale was made;
2. The brand or brands of the cigarettes that were sold in such delivery sale; and
3. The quantity of cigarettes that were sold in such delivery sale.
C. Any person that satisfies the requirements of Section 376 of Title 15 of the United States Code shall be deemed to satisfy the requirements of this section.
Added by Laws 2003, c. 475, § 10, eff. Nov. 1, 2003.
§68-317.6. Collection and remission of taxes.
Each person accepting a purchase order for a delivery sale shall collect and remit to the Oklahoma Tax Commission any taxes levied by Oklahoma with respect to such delivery sale, except that such collection and remission shall not be required to the extent such person has obtained proof, in the form of the presence of applicable tax stamps or otherwise, that such taxes already have been paid to Oklahoma.
Added by Laws 2003, c. 475, § 11, eff. Nov. 1, 2003.
§68-317.7. Violations - Penalties.
A. 1. Except as otherwise provided in this section, the first time a person violates any provision of Section 6, 7, 8, 9, 10 or 11 of this act, such person shall be fined not more than One Thousand Dollars ($1,000.00).
2. In the case of a second or subsequent violation of Section 6, 7, 8, 9, 10 or 11 of this act, such person shall be fined not less than One Thousand Dollars ($1,000.00) or five times the retail value of the cigarettes involved, whichever is greater.
B. Any person who knowingly violates any provision of Section 6, 7, 8, 9, 10 or 11 of this act, or who knowingly and falsely submits a certification under paragraph 1 of subsection A of Section 7 of this act in another person's name, shall, for each such offense, be fined Ten Thousand Dollars ($10,000.00) or five times the retail value of the cigarettes involved, whichever is greater, or imprisoned not more than five (5) years, or both.
C. Whoever fails to collect or remit any tax required in connection with a delivery sale shall pay, in addition to any other penalty, a penalty of five times the retail value of the cigarettes involved.
D. 1. Any cigarettes sold or attempted to be sold in a delivery sale that does not meet the requirements of Section 301 et seq. of this title shall be forfeited to the State of Oklahoma and destroyed.
2. All fixtures, equipment, and all other materials and personal property on the premises of any person who, with the intent to defraud the State of Oklahoma, fails to satisfy any of the requirements of Section 6, 7, 8, 9, 10 or 11 of this act shall be forfeited to the State of Oklahoma.
Added by Laws 2003, c. 475, § 12, eff. Nov. 1, 2003.
§68-317.8. Actions to prevent or restrain violations.
The Attorney General or his or her designee, or any person who holds a permit under 26 U.S.C., Section 5712, may bring an action in the appropriate court in the State of Oklahoma to prevent or restrain violations of Section 6, 7, 8, 9, 10 or 11 of this act by any person or any person controlling such person.
Added by Laws 2003, c. 475, § 13, eff. Nov. 1, 2003.
§68319. Restricting of licenses to residents and domesticated foreign corporations Prohibition on discrimination.
(a) No wholesaler's license shall be issued under this article or the following article of this Code to or held by a person who is not an actual resident and domiciled in this state, or to any foreign corporation which is not domesticated under the laws of this state.
(b) No manufacturer, wholesaler, distributor or jobber of cigarettes or tobacco products licensed under the laws of this state shall discriminate by refusing to sell to any other wholesaler, distributor or jobber in this state, and likewise no such wholesaler, distributor or jobber shall refuse to sell to any retailer of cigarettes or such products in this state; and any violation of the provisions hereof shall be grounds for revocation and cancellation of such license.
(c) This section shall not change or modify the provisions for reciprocity contained in Section 303 of this Code.
Laws 1965, c. 195, § 2.
§68320. Surety, collateral or cash bond requirements to distributing agents, wholesalers or jobbers.
Every person making application for a distributing agent's license under this article or the following article containing the tobacco Products Tax Code shall, before being issued such license and as a condition of carrying on such business, file with the Tax Commission a surety or collateral or cash bond in the amount of One Thousand Dollars ($1,000.00) payable to the State of Oklahoma, and conditioned upon compliance with the provisions of this article or the following article of this Code, and the rules and regulations of the Oklahoma Tax Commission.
Every person making application for a wholesaler's or jobber's license under this article shall, before being issued such license and as a condition of carrying on such business, file with the Tax Commission a surety or collateral or cash bond in the amount of One Thousand Dollars ($1,000.00) payable to the State of Oklahoma, and conditioned upon compliance with the provisions of this article, and the rules and regulations of the Oklahoma Tax Commission.
Laws 1965, c. 195, § 2; Laws 1968, c. 235, § 1, emerg. eff. April 24, 1968.
§68321. Exemptions from tax.
The following sales are hereby exempted from the stamp excise tax levied pursuant to the provisions of Section 301 et seq. of this title:
1. All cigarettes sold to veterans hospitals and state operated domiciliary homes for veterans located in the State of Oklahoma, for distribution or sale to disabled exservicemen or disabled exservicewomen interned in, or inmates of, such hospitals, or residents of such homes;
2. All sales to the United States;
3. All sales to a federally recognized Indian tribe or nation which has entered into a compact with the State of Oklahoma pursuant to the provisions of subsection C of Section 1 of this act or to a licensee of such a tribe or nation, upon which the payment in lieu of taxes required by the compact has been paid; and
4. All sales to a federally recognized Indian tribe or nation or to a licensee of such a tribe or nation upon which the tax levied pursuant to the provisions of Section 4 of this act has been paid.
Laws 1965, c. 195, § 2, emerg. eff. June 10, 1965; Laws 1992, c. 339, § 16, eff. Jan. 1, 1993.
§68322. Rules and regulations.
The Oklahoma Tax Commission shall prescribe such rules and make such regulations as to the sale or distribution of cigarettes, and the exemption from the stamp excise tax thereof, as shall be deemed necessary to comply with the provisions of the preceding section.
Laws 1965, c. 195, § 2.
§68323. Restricted to sale or distribution to inmates Possession by others.
The sale of such exempted cigarettes shall be restricted to such exempted cigarettes shall be restricted to sales or distribution to patients or inmates of veterans hospitals and residents of state operated domiciliary homes for veterans, as shown by the records thereof, for their own personal use and consumption. Possession of twenty or more of such exempted cigarettes by persons other than such exempted cigarettes by persons other than such inmates, patients or residents shall be deemed prima facie evidence of intention to evade payment of the stamp excise tax levied thereon, and shall be punishable as is provided by Section 305 of this Code.
Laws 1965, c. 195, § 2.
§68324. Compliance with law.
All manufacturers, wholesalers, jobbers, retailers or other persons selling or distributing such cigarettes are hereby required to comply with the provisions of the three preceding sections, and the rules and regulations of the Oklahoma Tax Commission as to such sales or distributions, and failure or refusal to so comply shall constitute grounds for revocation of any license issued to such manufacturer, wholesaler, jobber, retailer or other person, by the Oklahoma Tax Commission.
Laws 1965, c. 195, § 2.
§68325. Continuity of law.
It is hereby declared that it is the intention of the Legislature that this act be construed as amending and revising the present cigarette tax law and that the repeal and reenactment of said law herein shall not affect any license issued or tax liability accrued under such prior law.
Laws 1965, c. 195, § 2.
§68326. Short title.
This Act shall be known and may be cited as the "Unfair Cigarette and Tobacco Products Sales Act".
Laws 1949, p. 107, § 1.
§68-327. Definitions.
The following words, terms and phrases, when used in this act, shall have the meaning ascribed to them in this section, except where the context clearly indicates a different meaning:
a. "Person" shall mean and include any individual, firm, association, company, partnership, limited liability company, corporation, joint stock company, club, agency, syndicate municipal corporation, or other political subdivision of this state, trust, receiver, trustee, fiduciary, and conservator.
b. "Cigarettes" shall mean and include any roll for smoking, made wholly or in part of tobacco, irrespective of size or shape and whether or not such tobacco is flavored, adulterated, or mixed with any other ingredient, the wrapper or cover of which is made of paper, leaves, string, or any other substance or material, excepting tobacco.
c. "Tobacco Products" shall mean any bidis, cigars, cheroots, stogies, smoking tobacco (including granulated, plug cut, crimp cut, ready rubbed, and any other kinds and forms of tobacco suitable for smoking in a pipe or cigarette), chewing tobacco (including cavendish, twist, plug, scrap, and any other kinds and forms of tobacco suitable for chewing), however prepared; and shall include any other articles or products made of tobacco or any substitute therefor.
d. "Sale" shall mean any transfer for a consideration, exchange, barter, gift, offer for sale, and distribution in any manner or by any means whatsoever.
e. "Wholesaler" and/or "jobber" is defined to mean a person, firm, or corporation organized and existing, or doing business primarily to sell cigarettes to, and render service to retailers in the territory such person, firm or corporation chooses to serve; that purchases cigarettes directly from the manufacturer; that at least seventyfive percent (75%) of whose gross sales are made at wholesale; to other than their own retail stores, that handles goods in wholesale quantities and sells through salesmen, advertising, and/or sales promotion devices; that carries at all times at his or its principal place of business a representative stock of cigarettes and tobacco products for sale, and that comes into the possession of cigarettes for the purpose of selling them to retailers or to persons outside or within the state who might resell or retail such cigarettes to consumers.
f. The word "SubJobber" is defined to mean any person in this state who does not purchase cigarettes and tobacco products from a manufacturer and who acquires stamped cigarettes and tobacco products from a wholesaler, at least seventyfive percent (75%) of which are for purposes of resale to retailers in this state, or to persons for the purpose of resale only.
g. "Retailer" means any person in this state who is engaged in the business of selling cigarettes and tobacco products at retail and any person selling cigarettes through vending machines.
h. "Manufacturer's representative, or manufacturer's salesman" shall mean any person working for or under the supervision of a manufacturer and whose action is not controlled by the wholesaler or retailer.
i. "Consumer" shall mean a person who comes into possession of cigarettes or tobacco products for the purpose of consuming them, giving them away, or disposing of them in a way other than by sale, barter, or exchange.
j. "Drop shipment" shall mean and include any delivery of cigarettes or tobacco products received by any person within this state when payment for such cigarettes or tobacco products is made to the shipper or seller by or through a person other than the consignee.
k. "Sell at retail", "sale at retail", and "retail sales" shall mean and include any transfer of title to cigarettes and tobacco products for a valuable consideration, made in the ordinary course of trade or usual conduct of the seller's business, to the purchaser for consumption or use.
l. "Sell at wholesale", "sale at wholesale", and "wholesale sales" shall mean and include any transfer of title to cigarettes and tobacco products for a valuable consideration, made in the ordinary course of trade or usual conduct of the wholesaler's business, to the retailer for the purpose of resale.
m. "Basic costs of cigarettes and tobacco products" shall mean the invoice cost of cigarettes and tobacco products to the retailer or wholesaler, as the case may be, or the replacement cost of cigarettes and tobacco products to the retailer or wholesaler, as the case may be, within thirty (30) days prior to the date of sale in the quantity last purchased, whichever is lower, less all trade discounts, except the customary discounts for cash, to which shall be added the full face value of any stamps which may be required by any cigarette and tobacco products tax act of this state or federal act now in effect or hereafter enacted, if not already included by the manufacturer in the list price.
Added by Laws 1949, p. 107, § 2, emerg. eff. May 31, 1949. Renumbered from Title 15, § 599.2 by Laws 1981, c. 211, § 7, emerg. eff. June 1, 1981. Amended by Laws 1993, c. 366, § 29, eff. Sept. 1, 1993; Laws 2002, c. 76, § 2, emerg. eff. April 15, 2002.
§68328. Sales at less than cost; penalty.
a. It shall be unlawful for any retailer or wholesaler, with intent to injure competitors or destroy or substantially lessen competition, to advertise, offer to sell, or sell, at retail or wholesale, cigarettes and tobacco products at less than cost to such retailer or wholesaler, as the case may be. Any retailer or wholesaler who violates the provisions of this Section shall be guilty of a misdemeanor and be punishable by fine of not more than Five Hundred Dollars ($500.00).
b. Evidence of advertisement, offering to sell, or sale of cigarettes and tobacco products by any retailer or wholesaler at less than cost to him as defined in this Act shall be prima facie evidence of intent to injure competitors and to destroy or substantially lessen competition.
Laws 1949, p. 108, § 3. Laws 1949, p. 108, § 3.
§68329. Cost to wholesaler; meaning.
a. The term "cost to the wholesaler" shall mean the "basic cost of cigarettes and tobacco products" to the wholesaler plus the "cost of doing business by the wholesaler", as evidenced by the recognized statistical and cost accounting practices in allocation of overhead costs and expenses, paid or incurred, and must include, without limitation, labor costs (including salaries or drawing accounts of owners, salaries of executives and officers, or general and special allocations and charges made by parent organizations), rent, depreciation, selling costs, maintenance of equipment, delivery costs, all types of licenses, taxes, insurances, and advertising, and any other cost.
b. In the absence of proof of a lesser cost of doing business by the wholesaler making the sale, the "cost of doing business by the wholesaler" shall be presumed to be two per centum (2%) of the "basic cost of cigarettes and tobacco products" to the wholesaler, plus cartage to the retail trade, if performed or paid for by the wholesaler, which cartage cost, in the absence of proof of a lesser cost, shall be deemed to be threefourths of one per centum (3/4 of 1%) of the "basic cost of cigarettes and tobacco products" to the wholesaler.
Laws 1949, p. 108, § 4.
§68330. Cost to the retailer; meaning.
a. The term "cost to the retailer" shall mean the "basic cost of cigarettes and tobacco products" to the retailer plus the "cost of doing business by the retailer", as evidenced by the recognized statistical and cost accounting practices in allocation of overhead costs and expenses, paid or incurred, and must include, without limitation, labor (including salaries or drawing accounts of owners, salaries of executives and officers, or general and special allocations and charges made by parent organizations), rent, depreciation, selling costs, maintenance of equipment, delivery costs, all types of licenses, taxes, insurance, and advertising, and any other cost: Provided, that any retailer who, in connection with the retailer's purchase, receives not only the discounts ordinarily allowed upon purchases by a retailer but also, in whole or in part, discounts ordinarily allowed upon purchases by a wholesaler, shall, in determining "cost to the retailer", pursuant to this subsection, add the "cost of doing business by the wholesaler", as defined in Section 4 of this Act, to the "basic cost of cigarettes and tobacco products" to said retailer, as well as the "cost of doing business by the retailer".
b. In the absence of proof of a lesser cost of doing business by the retailer making the sale, the "cost of doing business by the retailer" shall be presumed to be six per centum (6%) of the "basic cost of cigarettes and tobacco products" to the retailer, plus cartage to the retail outlet if performed or paid for by the retailer (and not previously included in the charge by the wholesaler), which cartage cost, in the absence of proof of a lesser cost, shall be deemed to be threefourths of one per centum (3/4 of 1%) of the basic cost of cigarettes and tobacco products to the retailer.
c. In the absence of proof of a lesser cost of doing business, the "cost of doing business by the retailer", who, in connection with the retailer's purchase, receives not only the discounts ordinarily allowed upon purchases by a retailer but also, in whole or in part, the discounts ordinarily allowed upon purchases by a wholesaler, shall be presumed to be six percentum (6%) of the sum of the "basic cost of cigarettes and tobacco products" and the "cost of doing business by the wholesaler".
Laws 1949, p. 109, § 5.
§68331. Sales by a wholesaler to a subjobber.
When a wholesaler sells cigarettes and/or tobacco products to a subjobber, the former shall use the basic cost of cigarettes and/or tobacco products (which is the factory list, less all discounts except customary discounts for cash, plus the full face value of any stamps which may be required by any cigarette tax act of this State now in effect or hereafter enacted) in making such sales. The subjobber, upon resale to a retailer, shall be subject to the provisions of Section 4 of this Act.
Laws 1949, p. 109, § 6.
§68332. Sales by a wholesaler to a wholesaler.
When one wholesaler sells cigarettes and tobacco products to any other wholesaler, the former shall not be required to include in his selling price to the latter "cost to the wholesaler", as provided by Section 4 of this Act, but the latter wholesaler, upon resale to a retailer, shall be subject to the provisions of said section: Provided further, that manufacturer's representatives, manufacturer's salesmen, or any other person not coming under the definition of a wholesaler, shall not be eligible to purchase cigarettes or tobacco products under the provisions of this Section. Sales by manufacturer's representatives, manufacturer's salesmen, or any other person selling cigarettes and tobacco products to retailers or consumers, as the case may be, shall be required to sell at prices no lower than the prices of the wholesaler to the retailer or of the retailer to the consumer, as the case may be.
Laws 1949, p. 109, § 7.
§68333. Combination sales.
In all advertisements, offers for sale or sales involving two (2) or more items, at least one of which items or cigarettes and tobacco products, at a combined price, and in all advertisements, offers for sale, or sales, involving the giving of any gift or concession of any kind whatsoever (whether it be coupons or otherwise), the retailer's or wholesaler's combined selling price shall not be below the "cost to the retailer" or the "cost to the wholesaler", respectively, of the total of all articles, products, commodities, gifts, and concessions included in such transactions.
Laws 1949, p. 110, § 8.
§68334. Sales exceptions.
The provisions of this Act shall not apply to sales at retail or sales at wholesale made (a) in an isolated transaction and not in the usual course of business; (b) where cigarettes and tobacco products are advertised, offered for sale, or sold in bona fide clearance sales for the purpose of discontinuing trade in such cigarettes and tobacco products, and said advertising, offer to sell, or sale shall state the reason thereof and the quantity of such cigarettes and tobacco products advertised, offered for sale, or to be sold; (c) where cigarettes or tobacco products advertised, offered for sale, or sold as imperfect or damaged, and said advertising, offer to sell, or sale shall state the reason therefor and the quantity of such cigarettes and tobacco products advertised, offered for sale, or to be sold; (d) where cigarettes and tobacco products are sold upon the final liquidation of a business; or (e) where cigarettes and tobacco products are advertised, offered for sale, or sold by any fiduciary or other officer acting under the order or direction of any court.
Laws 1949, p. 110, § 9.
§68335. Advertising of certain sales; good faith.
a. Any retailer may advertise, offer to sell, or sell cigarettes and tobacco products at a price made in good faith to meet the price of a competitor who is selling the same article at cost to him as a retailer. Any wholesaler may advertise, offer to sell, or sell cigarettes and tobacco products at a price made in good faith to meet the price of a competitor who is rendering the same type of service and is selling the same article at cost to him as a wholesaler. The price of cigarettes and tobacco products advertised, offered for sale, or sold under the exceptions specified in Section 9 shall not be considered the price of a competitor and shall not be used as a basis for establishing prices below cost, nor shall the price established at a bankrupt sale be considered the price of a competitor within the purview of this Section.
b. In the absence of proof of the "price of a competitor", under this Section, the "lowest cost to the retailer", or the "lowest cost to the wholesaler", as the case may be determined by any "cost survey", made pursuant to Section 14 of this Act, may be deemed the "price of a competitor" within the meaning of this Section.
Laws 1949, p. 110, § 10.
§68336. Sales contracts void.
Any contract expressed or implied, made by any person in violation of any of the provisions of this Act, is declared to be an illegal and void contract and no recovery thereon shall be had.
Laws 1949, p. 110, § 11.
§68337. Admissible evidence.
a. In determining "cost to the retailer" and "cost to the wholesaler", the court shall receive and consider as bearing on the bona fides of such cost, evidence tending to show that any person complained against under any of the provisions of this Act purchased cigarettes and tobacco products, with respect to the sale of which complaint is made, at a fictitious price, or upon terms, or in such a manner, or under such invoices, as to conceal the true cost, discounts, or terms of purchase, and shall also receive and consider as bearing on the bona fides of such cost, evidence of the normal, customary, and prevailing terms and discounts in connection with other sales of a similar nature in the trade area or State.
b. Merchandise given gratis or payment made to a retailer or wholesaler for display, or advertising, promotion purposes, or otherwise, shall not be considered in determining the cost of cigarettes and tobacco products to the retailer or wholesaler.
Laws 1949, p. 110, § 12.
§68338. Sales outside ordinary channels of business; effect.
In establishing the cost of cigarettes and tobacco products to the retailer or wholesaler, the invoice cost of said cigarettes and tobacco products purchased at a forced, bankrupt, or closeout sale, or other sale outside of the ordinary channels of trade, may not be used as a basis for justifying a price lower than one based upon the replacement cost of the cigarettes and tobacco products to the retailer or wholesaler, within thirty (30) days prior to the date of sale, in the quantity last purchased, through the ordinary channels of trade.
Laws 1949, p. 111, § 13.
§68339. Cost survey; admissibility.
a. Where a cost survey, pursuant to recognized statistical and cost accounting practices, has been made for the trading area in which the offense is committed, to establish the lowest "cost to the retailer" and the lowest "cost to the wholesaler", said cost survey shall be deemed competent evidence to be used in proving the cost to the person complained against, within the provisions of this Act.
b. Any defendant, or any witness, in any civil action brought under the provisions of this act, may be required to testify, and the books, records, invoices, and all other documents of any such defendant, may be brought into court and introduced as evidence, but no defendant, or any witness in any such civil action, shall be prosecuted or subjected to any penalty or forfeiture for or on account of any transaction, matter or thing concerning which he may testify or produce evidence, documentary or otherwise, and no testimony given or produced shall be received against him upon any criminal proceeding or investigation.
Laws 1949, p. 111, § 14.
§68340. Association empowered to file suits.
Any duly organized and existing trade association, whether incorporated or not, is hereby authorized to institute and prosecute a suit or suits for injunctive or other relief provided for under the terms of this Act, as the real party in interest for and on behalf of one or more of said association's members, when violation of this Act directly or indirectly affects or threatens to affect or injure such member or members, or where violation of this Act threatens to impair fair competition or otherwise affects such member as herein provided.
Laws 1949, p. 111, § 16.
§68341. Cancellation of license for violations.
The Oklahoma Tax Commission shall cancel the license of any cigarette or tobacco dealer who has been determined by any court to have violated the provisions of this Act.
Laws 1949, p. 111, § 17; Laws 1957, p. 86, § 1.
§68342. Partial unconstitutionality.
The provisions of this Act shall be deemed to be severable and if for any reason any provision, phrase, or clause shall be determined to be unconstitutional or invalid, such determination shall not be held to affect any other provision hereof. And no such determination shall be deemed to invalidate or render ineffectual any of the provisions of the "unfair cigarette and tobacco products sales act".
Laws 1949, p. 112, § 18.
§68343. Violations Injunctions Damages.
A. The Commission or any person injured by any violation, or who would suffer injury from any threatened violation of Sections 326 through 345 of Title 68 of the Oklahoma Statutes, may maintain an action in any court of equitable jurisdiction to prevent, restrain or enjoin such violation or threatened violation. If in such action a violation or threatened violation of Sections 326 through 345 of Title 68 of the Oklahoma Statutes shall be established, the court shall enjoin and restrain, or otherwise prohibit, such violation or threatened violation, and, in addition thereto, the court shall assess in favor of the plaintiff and against the defendant the costs of suit including reasonable attorney's fees. In such action it shall not be necessary that actual damages to the plaintiff be alleged or proved, but where alleged and proved, the plaintiff in the action, in addition to such injunctive relief and cost of suit, including reasonable attorney's fees shall be entitled to recover from the defendant the actual damages sustained by him.
B. In the event that no injunctive relief is sought or required, any person injured by a violation of Sections 326 through 345 of Title 68 of the Oklahoma Statutes may maintain an action for damages and costs of suit in any court of general jurisdiction.
Laws 1981, c. 211, § 3, emerg. eff. June 1, 1981.
§68344. Enforcement of act.
The Oklahoma Tax Commission shall prescribe, adopt and enforce rules and regulations relating to the administration and enforcement of Sections 326 through 345 of Title 68 of the Oklahoma Statutes. The Commission is hereby empowered to and may from time to time undertake and make or cause to be made one or more cost surveys for the state or such trading area or areas as it shall define and when such cost survey shall have been made by or approved by it, it shall be permissible to use such cost survey as provided in Section 337 of Title 68 of the Oklahoma Statutes. The Commission may revoke or suspend the license issued under the provisions of Sections 326 through 345 of Title 68 of the Oklahoma Statutes or the cigarette tax laws of this state, of any person who refuses or neglects to comply with any provisions of Sections 326 through 345 of Title 68 of the Oklahoma Statutes or any rule or regulation of the Commission prescribed under Sections 326 through 345 of Title 68 of the Oklahoma Statutes.
Whenever any person fails to comply with any provision of Sections 326 through 345 of Title 68 of the Oklahoma Statutes or any rule or regulation of the Commission promulgated thereunder, the Commission upon hearing, after giving said person ten (10) days' notice in writing specifying the time and place of the hearing and requiring him to show cause why his license or licenses should not be revoked, may revoke or suspend the license held by the person.
Any ruling, order or decision of the Commission shall be subject to review as provided by Section 225 of Title 68 of the Oklahoma Statutes.
Laws 1981, c. 211, § 4, emerg. eff. June 1, 1981.
§68345. Licenses required.
After the effective date of this act, no person shall engage in or conduct the business of purchasing for resale or selling cigarettes without having first obtained the appropriate license for that purpose.
All such licenses shall be issued by the Commission which shall make rules and regulations respecting applications therefor and issuance thereof.
A wholesaler or retailer who sells or intends to sell cigarettes at one, two or more places of business shall be required to obtain a separate license for each place of business.
Any person licensed only as a wholesaler shall not operate as a retailer unless the appropriate license therefor is first secured, and any person licensed only as a retailer shall not operate as a wholesaler unless the appropriate license therefor is first secured.
Laws 1981, c. 211, § 5, emerg. eff. June 1, 1981.
§68-346. Legislative findings - Intent of Legislature - Cigarette and tobacco products tax compacts - Audits.
A. The Legislature finds that:
1. Federal law recognizes the right of Indian tribes or nations to engage in sales of cigarettes and tobacco products to their members free of state taxation;
2. The doctrine of tribal sovereign immunity prohibits the State of Oklahoma from bringing a lawsuit against an Indian tribe or nation to compel the tribe or nation to collect state taxes on sales made in Indian country to either members or nonmembers of the tribe or nation without a waiver of immunity by the tribe or nation or congressional abrogation of the doctrine; and
3. The Supreme Court of the United States, in "Oklahoma Tax Commission v. Citizen Band Pottawatomie Indian Tribe of Oklahoma", suggested that a state may provide other methods of collection of state taxes on sales of cigarettes and tobacco products made by Indian tribes or nations to persons who are not members of the tribe or nation, such as entering into mutually satisfactory agreements with Indian tribes or nations.
B. It is the intent of the Legislature to establish a system of state taxation of sales of cigarettes and tobacco products made by federally recognized Indian tribes or nations or their licensees, other than such tribes or nations which have entered into a compact with the State of Oklahoma pursuant to the provisions of subsection C of this section, under which the rate of payments in lieu of state taxes is less than the rate of state taxes on other sales of cigarettes and tobacco products in order to allow such tribes or nations or their licensees to make sales of cigarettes and tobacco products to tribal members free of state taxation.
C. The Governor is authorized by this enactment to enter into cigarette and tobacco products tax compacts on behalf of the State of Oklahoma with the federally recognized Indian tribes or nations of this state. The compacts shall set forth the terms of agreement between the sovereign parties regulating sale of cigarettes and tobacco products by the tribes or nations or their licensees in Indian country. All sales in Indian country by those compacting tribes or nations and their licensees shall be exempt from the taxes levied pursuant to the provisions of Section 301 et seq., Section 401 et seq. and Section 1350 et seq. of Title 68 of the Oklahoma Statutes and Sections 349 and 425 of this title, subject to the following terms and conditions:
1. A payment in lieu of state sales and excise taxes, as provided for in said compact, shall be paid to the State of Oklahoma by the tribes or nations, their licensees or their wholesalers upon purchase of all cigarettes and tobacco products intended for resale in Indian country by the tribes or nations or their licensees;
2. All cigarettes and tobacco products sold or held for sale to the public, without distinction between member and nonmember sales, shall bear a payment in lieu of tax stamp evidencing that payment in lieu of state taxes has been paid to the state. State and tribal officials may provide for use of a single joint stamp evidencing payment of both the payment in lieu of tax as specified in a compact pursuant to the provisions of this section and any tax levied by a tribe or nation;
3. In the event that a compacting tribe or nation fails to comply with all terms and conditions of the compact including, but not limited to, requirements to include all state taxes required by the terms of the compact to be collected by the tribe or nation in the price of its cigarettes or tobacco products, the tribe or nation shall not be eligible to receive any payment due from the state pursuant to the terms of the compact for the tax-reporting period during which the noncompliance occurred;
4. Records of all sales of cigarettes and tobacco products to the tribes or nations and their licensees shall be kept by all wholesalers doing business in the State of Oklahoma and shall be made available for inspection by state officials on a timely basis. Copies of all invoices of wholesale sales of cigarettes or tobacco products to tribally owned or licensed retail stores shall be forwarded by the wholesaler to the Oklahoma Tax Commission; and
5. For purposes of a compact pursuant to the provisions of this section, the term "tribal licensee" shall only extend to:
a. members of the tribe or nation, and
b. business entities in which the tribe or nation or tribal members have a majority ownership interest.
D. In addition to any other authority granted by law, the Tax Commission shall regularly conduct an audit of wholesalers, distributors, jobbers and warehousemen selling cigarettes or tobacco products to a federally recognized Indian tribe or nation or a tribally owned or licensed store to determine if the correct amount of tax payable under this act has been collected and to determine compliance with any and all compacts.
Added by Laws 1992, c. 339, § 1, emerg. eff. May 28, 1992. Amended by Laws 2004, c. 322, § 8, eff. Dec. 1, 2004 (State Question No. 713, Legislative Referendum No. 336, adopted at election held Nov. 2, 2004).
§68-347. Inapplicability of certain provision to certain tribes or nations or their licensees.
The provisions of Sections 3 through 6 of this act shall not apply to a federally recognized Indian tribe or nation which has entered into a compact with the State of Oklahoma pursuant to the provisions of subsection C of Section 1 of this act or to a licensee of such a tribe or nation during the period that such compact is effective.
Added by Laws 1992, c. 339, § 2, eff. Jan. 1, 1993.
§68-348. Definitions.
As used in Sections 346 through 352 of this title:
1. "Tribally owned or licensed store" means a store or place of business which is owned and operated by a federally recognized Indian tribe or nation, other than a federally recognized Indian tribe or nation which has entered into a compact with the State of Oklahoma pursuant to the provisions of subsection C of Section 346 of this title during the period that such compact is effective, on Indian country within the territorial jurisdiction of that tribe or nation or which is duly licensed by such tribe or nation pursuant to tribal laws or ordinances to conduct business located on Indian country within the territorial jurisdiction of that tribe or nation;
2. "Federally recognized Indian tribe or nation" means an Indian tribal entity which is recognized by the United States Bureau of Indian Affairs as having a special relationship with the United States;
3. "Indian country" means:
a. land held in trust by the United States of America for the benefit of a federally recognized Indian tribe or nation,
b. all land within the limits of any Indian reservation under the jurisdiction of the United States Government, notwithstanding the issuance of any patent, including rights-of-way running through the reservation,
c. all dependent Indian communities within the borders of the United States whether within the original or subsequently acquired territory thereof, and whether within or without the limits of a state, and
d. all Indian allotments, the Indian titles to which have not been extinguished, including individual allotments held in trust by the United States or allotments owned in fee by individual Indians subject to federal law restrictions regarding disposition of said allotments and including rights-of-way running through the same;
4. "Member of the tribe" or "tribal member" means a person who is duly enrolled within the membership of the federally recognized Indian tribe or nation which owns or licenses the store;
5. "Nonmember of the tribe" or "nontribal member" means, with respect to a particular Indian tribe or nation, any person who is not a duly enrolled member of that tribe or nation, and shall include any person who is a member of another Indian tribe or nation but not a member of that tribe or nation;
6. "Unstamped cigarettes" means packages of cigarettes which bear no evidence of a tax stamp required by state law;
7. "Contraband cigarettes" means unstamped cigarettes which are required by the provisions of Sections 348 through 351 of this title or Section 301 et seq. of this title to bear stamps and which are in the possession, custody or control of any person, for the purpose of being consumed, sold, offered for sale or consumption or transported to any person in this state other than a wholesaler licensed under Section 304 of this title; provided, contraband cigarettes shall not include unstamped cigarettes sold to veterans' hospitals, to state-operated domiciliary homes for veterans or to the United States for sale or distribution by said entities in accordance with Sections 321 through 324 of this title;
8. "Stamped cigarettes" means packages of cigarettes which bear a tax stamp required by state law;
9. "Commission" means the Oklahoma Tax Commission; and
10. "Person" shall include any individual, company, partnership, joint venture, joint agreement, association (mutual or otherwise), limited liability company, corporation, trust, estate, business trust receiver or trustee appointed by any state or federal court, syndicates or any combination acting as a unit, in the plural or singular number.
Added by Laws 1992, c. 339, § 3, eff. Jan. 1, 1993. Amended by Laws 1993, c. 366, § 30, eff. Sept. 1, 1993.
§68-349. Levy of tax - Tax refunds - In lieu tax stamp - Shipping, transporting, receiving, possessing, selling, distributing or purchasing contraband cigarettes.
A. There is hereby levied upon the sale of cigarettes at a tribally owned or licensed store a tax in the amount of seventy-five percent (75%) of the cigarette excise taxes imposed by Section 301 et seq. of Title 68 of the Oklahoma Statutes, which tax shall be in lieu of all sales and excise taxes on such cigarettes.
B. A federally recognized Indian tribe or nation may receive a refund for a portion of the tax imposed pursuant to the provisions of this section if it can provide sufficient documentation that sales of cigarettes to its tribal members exceed twenty-five percent (25%) of its total sales of cigarettes. The amount of the refund shall be the amount of tax paid which is attributable to sales of cigarettes made to tribal members which is in excess of twenty-five percent (25%) of the tribe's or nation's total sales of cigarettes. Refunds shall be paid quarterly. The Tax Commission shall promulgate rules and regulations to administer the provisions of this subsection.
C. All cigarettes which are sold or held for sale at a tribally owned or licensed store shall have affixed thereto a stamp or stamps evidencing payment of the in lieu tax required by subsection A of this section.
D. It shall be unlawful for any person knowingly to ship, transport, receive, possess, sell, distribute or purchase contraband cigarettes. Any person who engages in shipping, transporting, receiving, possessing, selling, distributing or purchasing contraband cigarettes shall, upon conviction, be guilty of a misdemeanor punishable by a fine of not more than One Thousand Dollars ($1,000.00). Any person convicted of a second or subsequent violation hereof shall be guilty of a felony and shall be punishable by a fine of not more than Five Thousand Dollars ($5,000.00), by a term of imprisonment in the State Penitentiary for not more than two (2) years, or by both such fine and imprisonment.
E. Any person who knowingly engages in shipping, transporting, receiving, possessing, selling, distributing or purchasing contraband cigarettes shall be subject to the forfeiture of property as is provided by Section 305 of Title 68 of the Oklahoma Statutes and assessment of penalty as provided thereby and assessment for any delinquent taxes found to be owing.
Added by Laws 1992, c. 339, § 4, eff. Jan. 1, 1993. Amended by Laws 1997, c. 133, § 557, eff. July 1, 1999; Laws 1999, 1st Ex.Sess., c. 5, § 406, eff. July 1, 1999.
NOTE: Laws 1998, 1st Ex.Sess., c. 2, § 23 amended the effective date of Laws 1997, c. 133, § 557 from July 1, 1998, to July 1, 1999.
§68-350. Persons eligible to sell cigarettes to tribally owned or licensed store - Duty to affix tax stamp - Tribally owned or licensed stores to do business only with stamped cigarettes.
A. Every wholesaler, jobber or warehouseman doing business within this state and required to secure a license as provided in Section 304 of Title 68 of the Oklahoma Statutes may sell cigarettes to tribally owned or licensed stores in this state. It shall be the duty of the wholesaler, jobber or warehouseman to affix the tax stamp required by Section 4 of this act to cigarette inventory sold to a tribally owned or licensed store.
B. Tribally owned or licensed stores may only purchase, receive, stock, possess, sell or distribute stamped cigarettes.
Added by Laws 1992, c. 339, § 5, eff. Jan. 1, 1993.
§68-350.1. Cigarettes not purchased for sale at tribally owned or licensed store - Liability for additional tax due - Wholesaler, jobber or warehouseman.
If a wholesaler, jobber or warehouseman timely accepts documentation which shall require identification by drivers license and social security number as prescribed by the Oklahoma Tax Commission from a person claiming that the cigarettes will be sold at a tribally owned or licensed store, the wholesaler, jobber or warehouseman shall be relieved of any liability for any additional tax due or required to be collected should it later be determined that the cigarettes were not purchased for sale at a tribally owned or licensed store.
Added by Laws 1993, c. 146, § 13.
§68-351. Seizure and forfeiture of unstamped cigarettes - Authority of peace officers - Cooperation with Tax Commission.
A. All unstamped cigarettes sold or shipped to tribally owned or licensed stores in this state by wholesalers, jobbers or warehousemen not licensed by this state pursuant to the provisions of Section 304 of Title 68 of the Oklahoma Statutes for the purpose of selling or consuming unstamped cigarettes in this state in violation of this act shall be subject to seizure of the shipments and forfeiture of the inventory pursuant to the provisions of Section 305 of Title 68 of the Oklahoma Statutes.
B. Any peace officer of this state, including but not limited to officers of the Department of Public Safety or the Oklahoma State Bureau of Investigation, any sheriff, any salaried deputy sheriff or any municipal police officer is authorized to stop any vehicle upon any road or highway of this state in order to inspect the bill of lading or to take such action as may be necessary to determine if unstamped cigarettes are being sold or shipped in violation of the provisions of this section. Such officers shall also have the duty to cooperate with the Oklahoma Tax Commission to enforce the provisions of this act.
Added by Laws 1992, c. 339, § 6, eff. Jan. 1, 1993.
§68-352. Disposition of revenues.
A. Except as otherwise provided in subsection D of Section 2 of this act, any revenue from a payment in lieu of excise taxes on cigarettes pursuant to a compact entered into by the State of Oklahoma and a federally recognized Indian tribe or nation pursuant to the provisions of subsection C of Section 346 of this title shall be deposited to the General Revenue Fund.
B. Any revenue from payment of the tax imposed by Section 349 of this title shall be deposited to the General Revenue Fund.
Added by Laws 1992, c. 339, § 7, eff. Jan. 1, 1993. Amended by Laws 2004, c. 322, § 9, eff. Dec. 1, 2004 (State Question No. 713, Legislative Referendum No. 336, adopted at election held Nov. 2, 2004).
§68-360. Repealed by Laws 2004, c. 266, § 9, emerg. eff. May 6, 2004.
§68-360.1. Short title.
Sections 1 through 8 of this act shall be known and may be cited as the "Master Settlement Agreement Complementary Act".
Added by Laws 2004, c. 266, § 1, emerg. eff. May 6, 2004.
§68-360.2. Declaration of public policy.
The Oklahoma Legislature declares that violations of Sections 600.1 through 600.23 of Title 37 of the Oklahoma Statutes threaten the integrity of the Master Settlement Agreement as defined in Section 600.22 of Title 37 of the Oklahoma Statutes, the fiscal soundness of the state, and the public health. The Legislature declares that enacting this act enhances the Prevention of Youth Access to Tobacco Act by preventing violations and aiding in the enforcement of the Master Settlement Agreement Complementary Act and thereby safeguard the Master Settlement Agreement, the fiscal soundness of the state, and the public health.
Added by Laws 2004, c. 266, § 2, emerg. eff. May 6, 2004.
§68-360.3. Definitions.
As used in the Master Settlement Agreement Complementary Act:
1. "Brand family" means all styles of cigarettes sold under the same trademark and differentiated from one another by means of additional modifiers or descriptors, including, but not limited to, "menthol", "lights", "kings", and "100s", and includes any brand name alone or in conjunction with any other word, trademark, logo, symbol, motto, selling message, recognizable pattern of colors, or any other indicia of product identification identical or similar to, or identifiable with, a previously known brand of cigarettes;
2. "Cigarette" has the same meaning as that term is defined in Section 600.22 of Title 37 of the Oklahoma Statutes;
3. "Tax Commission" means the Oklahoma Tax Commission;
4. "Master Settlement Agreement" has the same meaning as in Section 600.22 of Title 37 of the Oklahoma Statutes;
5. "Nonparticipating manufacturer" means any tobacco product manufacturer as defined in Section 600.22 of Title 37 of the Oklahoma Statutes that is not a participating manufacturer;
6. "Participating manufacturer" has the meaning given that term in Section II(jj) of the Master Settlement Agreement as defined in Section 600.22 of Title 37 of the Oklahoma Statutes and all amendments to the Master Settlement Agreement;
7. "Qualified escrow fund" has the same meaning as that term is defined in Section 600.22 of Title 37 of the Oklahoma Statutes;
8. "Stamping agent" means any entity that is authorized under subsection A of Section 304 of Title 68 of the Oklahoma Statutes to affix any tax stamps issued by the Oklahoma Tax Commission to packages of cigarettes, or any entity authorized pursuant to Section 415 of Title 68 of the Oklahoma Statutes to pay to the Oklahoma Tax Commission any tobacco products tax; and
9. "Units sold" has the same meaning as that term is defined in Section 600.22 of Title 37 of the Oklahoma Statutes.
Added by Laws 2004, c. 266, § 3, emerg. eff. May 6, 2004.
§68-360.4. Certification by manufacturer.
A. 1. Every tobacco product manufacturer whose cigarettes are sold in this state, whether directly or through a distributor, retailer or similar intermediary or intermediaries, shall execute and deliver on a form or in the manner prescribed by the Attorney General a certification to the Oklahoma Tax Commission and Attorney General, no later than April 30 of each year, certifying under penalty of perjury that, as of the date of certification, the tobacco product manufacturer either:
a. is a participating manufacturer, or
b. is in full compliance with the provisions of Sections 600.21 through 600.23 of Title 37 of the Oklahoma Statutes.
2. A participating manufacturer shall include in its certification a list of its brand families. The participating manufacturer shall update the list thirty (30) calendar days prior to any addition to or modification of its brand families by executing and delivering a supplemental certification to the Attorney General and the Oklahoma Tax Commission.
3. A nonparticipating manufacturer shall include in its certification:
a. a list of all of its brand families and the number of units sold for each brand family that were sold in the state during the preceding calendar year, and
b. a list of all of its brand families that have been sold in the state at any time during the current calendar year:
(1) indicating, by an asterisk, any brand family sold in the state during the preceding calendar year that is no longer being sold in the state as of the date of the certification, and
(2) identifying by name and address any other manufacturer of the brand families in the preceding or current calendar year.
The nonparticipating manufacturer shall update the list thirty (30) calendar days prior to any corrected final addition to or modification of its brand families by executing and delivering a supplemental certification to the Attorney General and the Oklahoma Tax Commission.
4. In the case of a nonparticipating manufacturer, the certification shall further certify that the nonparticipating manufacturer:
a. is registered to do business in the state or has appointed a resident agent for service of process and provided notice thereof as required by Section 5 of this act,
b. has established and continues to maintain a qualified escrow fund, and
c. has executed a qualified escrow agreement that has been reviewed and approved by the Attorney General and that governs the qualified escrow fund as defined in Section 600.22 of Title 37 of the Oklahoma Statutes that the nonparticipating manufacturer is in full compliance with the provisions of Sections 600.21 through 600.23 of Title 37 of the Oklahoma Statutes and the Master Settlement Agreement Complementary Act and any rules promulgated pursuant to the Master Settlement Agreement Complementary Act.
5. The nonparticipating manufacturer shall include with certification:
a. the name, address, and telephone number of the financial institution with which the nonparticipating manufacturer has established its qualified escrow fund,
b. the account number of its qualified escrow fund and any subaccount number for the State of Oklahoma,
c. the amount the nonparticipating manufacturer placed in the qualified escrow fund for cigarettes sold in Oklahoma during the preceding calendar year, the date and amount of each deposit to the fund, and any evidence or verification as may be deemed necessary by the Attorney General to confirm the information required by this paragraph, and
d. the amount and date of any withdrawal or transfer of funds the nonparticipating manufacturer made at any time from the qualified escrow fund or from any other qualified escrow fund into which the nonparticipating manufacturer made escrow payments pursuant to Section 600.23 of Title 37 of the Oklahoma Statutes rules promulgated thereto.
6. A tobacco product manufacturer may not include a brand family in its certification unless:
a. in the case of a participating manufacturer, the participating manufacturer affirms that the brand family is to be deemed to be its cigarettes for purposes of calculating its payments under the Master Settlement Agreement for the relevant year, in the volume and shares determined pursuant to the Master Settlement Agreement, or
b. in the case of a nonparticipating manufacturer, the nonparticipating manufacturer affirms that the brand family is to be deemed to be its cigarettes for purposes of the provisions of Sections 600.21 through 600.23 of Title 37 of the Oklahoma Statutes.
7. Nothing in this section shall be construed as limiting or otherwise affecting the right of this state to maintain that a brand family constitutes cigarettes of a different tobacco product manufacturer for purposes of calculating payments under the Master Settlement Agreement or for purposes of Sections 600.21 through 600.23 of Title 37 of the Oklahoma Statutes.
8. Tobacco product manufacturers shall maintain all invoices and documentation of sales and other information relied upon for the certification for a period of five (5) years, unless otherwise required by law to maintain them for a greater period of time.
B. 1. Not later than ninety (90) calendar days after this act takes effect, the Attorney General shall develop and publish on its website a directory listing all tobacco product manufacturers that have provided current and accurate certifications conforming to the requirements of subparagraph a of paragraph 4 of subsection A of this section and all brand families that are listed in the certifications, except as otherwise provided in this section.
2. The Attorney General shall not include or retain in the directory the name or brand families of any nonparticipating manufacturer that has failed to provide the required certification or whose certification the Attorney General determines is not in compliance with paragraphs 3, 4, and 5 of subsection A of this section, unless the Attorney General has determined that a violation has been cured to the satisfaction of the Attorney General.
3. Neither a tobacco product manufacturer nor brand family shall be included or retained in the directory if the Attorney General concludes, in the case of a nonparticipating manufacturer, that:
a. any escrow payment required pursuant to Section 600.23 of Title 37 of the Oklahoma Statutes for any period for any brand family, whether or not listed by the nonparticipating manufacturer, has not been fully paid into a qualified escrow fund governed by a qualified escrow agreement that has been approved by the Attorney General, or
b. any outstanding final judgment, including interest thereon, for a violation of the provisions of Sections 600.21 through 600.23 of Title 37 of the Oklahoma Statutes has not been fully satisfied for the brand family or manufacturer.
4. The Attorney General shall update the directory as necessary in order to correct mistakes and to add or remove a tobacco product manufacturer or brand family to keep the directory in conformity with the requirements of the Master Settlement Agreement Complementary Act.
5. Every stamping agent shall provide and update, as necessary, an electronic mail address to the Oklahoma Tax Commission and the Attorney General for the purpose of receiving any notifications as may be required by the Master Settlement Agreement Complementary Act.
6. Any nonparticipating manufacturer may request, by facsimile transmission or other means to the Attorney General's Tobacco Enforcement Unit, information regarding its current compliance status pursuant to this act and to Sections 600.21 through 600.23 of Title 37 of the Oklahoma Statutes. Upon receipt of such request, the Attorney General shall inform the requesting nonparticipating manufacturer of its current compliance status before close of business within three (3) business days.
C. It shall be unlawful for any person to:
1. Affix a stamp to a package or other container of cigarettes of a tobacco product manufacturer or brand family not included in the directory; and
2. Sell, offer, or possess for sale, in this state, or import for personal consumption in this state, cigarettes of a tobacco product manufacturer or brand family not included in the directory.
Added by Laws 2004, c. 266, § 4, emerg. eff. May 6, 2004.
§68-360.5. Nonresident or foreign nonparticipating manufacturers - Appointment of agent - Appointment of Secretary of State.
A. Any nonresident or foreign nonparticipating manufacturer that has not registered to do business in this state as a foreign corporation or business entity shall appoint and continually engage without interruption, as a condition precedent to having its brand families included or retained in the directory, the services of an agent in this state to act as agent for the service of process on whom all process, and any action or proceeding against it concerning or arising out of the enforcement of the Master Settlement Agreement Complementary Act and Sections 600.21 through 600.23 of Title 37 of the Oklahoma Statutes, may be served in any manner authorized by law. The service shall constitute legal and valid service of process on the nonparticipating manufacturer. The nonparticipating manufacturer shall provide the name, address, phone number, and proof of the appointment and availability of the agent to perform the duties of an agent pursuant to the Master Settlement Agreement Complementary Act and to the satisfaction of the Oklahoma Tax Commission and the Attorney General.
B. The nonparticipating manufacturer shall provide notice to the Oklahoma Tax Commission and Attorney General thirty (30) calendar days prior to termination of the authority of an agent and shall further provide proof to the satisfaction of the Attorney General of the appointment of a new agent no less than five (5) calendar days prior to the termination of an existing agent appointment. If an agent terminates an agency appointment, the nonparticipating manufacturer shall notify the Oklahoma Tax Commission and Attorney General of the termination within five (5) calendar days and shall include proof to the satisfaction of the Attorney General of the appointment of a new agent.
C. Any nonparticipating manufacturer whose cigarettes are sold in this state, who has not appointed and engaged an agent as required by this section, shall be deemed to have appointed the Secretary of State as its agent and may be proceeded against in courts of this state by service of process upon the Secretary of State. However, the appointment of the Secretary of State as the agent shall not satisfy the condition precedent for having the brand families of the nonparticipating manufacturer included or retained in the directory.
Added by Laws 2004, c. 266, § 5, emerg. eff. May 6, 2004.
§68-360.6. Submission of information by stamping agents - Escrow deposits.
A. Not later than twenty (20) calendar days after the end of each calendar month, and more frequently if so directed by the Oklahoma Tax Commission, each stamping agent shall submit any information the Oklahoma Tax Commission requires to facilitate compliance with the Master Settlement Agreement Complementary Act, including, but not limited to, a list by brand families of the total number of cigarettes, or in the case of roll-your-own tobacco, the equivalent stick count, for which the stamping agent affixed stamps during the previous calendar month or otherwise paid the tax due for such cigarettes. The stamping agent shall maintain, and make available to the Oklahoma Tax Commission and the Attorney General, all invoices and documentation of sales of all nonparticipating manufacturer cigarettes and any other information relied upon in reporting to the Oklahoma Tax Commission for a period of five (5) years.
B. The Oklahoma Tax Commission may disclose to the Attorney General any information received under the Master Settlement Agreement Complementary Act and requested by the Attorney General for purposes of determining compliance with and enforcing the provisions of the act. The Oklahoma Tax Commission and Attorney General shall share with each other the information received under the Master Settlement Agreement Complementary Act and may share the information with other federal, state, or local agencies only for purposes of enforcement or litigation of the act, the provisions of Sections 600.21 through 600.23 of Title 37 of the Oklahoma Statutes, corresponding laws of other states, and the Master Settlement Agreement.
C. The Attorney General may require at any time from a nonparticipating manufacturer proof, from the financial institution in which the nonparticipating manufacturer has established a qualified escrow fund for the purpose of compliance with the provisions of Sections 600.21 through 600.23 of Title 37 of the Oklahoma Statutes, of the amount of money in the fund, exclusive of interest, the amount and date of each deposit to the fund, and the amount and date of each withdrawal from the fund.
D. In addition to the information required to be submitted pursuant to the Oklahoma Tax Commission, the Attorney General may require a stamping agent or tobacco product manufacturer to submit any additional information including, but not limited to, samples of the packaging or labeling of each brand family, and proof of compliance with laws and regulations regarding the manufacture, labeling, importation, and exportation of cigarettes, as is necessary to enable the Attorney General to determine whether a tobacco product manufacturer is in compliance with the Master Settlement Agreement Complementary Act. The Oklahoma Tax Commission and the Attorney General may require production of information sufficient to enable the Attorney General to determine the adequacy of the amount of the installment deposit.
E. To promote compliance with the Master Settlement Agreement Complementary Act, the Oklahoma Tax Commission, at the request of the Attorney General, may promulgate rules requiring a tobacco product manufacturer subject to the requirements of paragraph 2 of subsection A of Section 600.23 of Title 37 of the Oklahoma Statutes to make the escrow deposits required in quarterly installments during the year in which the sales covered by the deposits are made.
Added by Laws 2004, c. 266, § 6, emerg. eff. May 6, 2004.
§68-360.7. Violations - Civil penalties - Contraband - Seizure and forfeiture - Injunction.
A. In addition to or in lieu of any other civil or criminal remedy provided by law, upon a determination that a stamping agent has violated Section 6 of this act or any rule promulgated pursuant to the Master Settlement Agreement Complementary Act, the Oklahoma Tax Commission may revoke or suspend the license of the stamping agent. Each stamp affixed and each sale or offer to sell cigarettes in violation of the Master Settlement Agreement Complementary Act shall constitute a separate violation. For each violation, the Oklahoma Tax Commission may also impose a civil penalty in an amount not to exceed the greater of five hundred percent (500%) of the retail value of the cigarettes or Five Thousand Dollars ($5,000.00) upon a determination of violation of the Master Settlement Agreement Complementary Act or any rules promulgated pursuant thereto.
B. Any cigarettes that have been sold, offered for sale, or possessed for sale in this state or imported for personal consumption in this state, in violation of the Master Settlement Agreement Complementary Act, shall be deemed contraband pursuant to the Master Settlement Agreement Complementary Act. Those cigarettes shall be subject to seizure and forfeiture as provided by this section and all cigarettes so seized and forfeited shall be destroyed as provided by this section and not resold.
C. 1. Cigarettes or tobacco product distributors and wholesalers licensed by the Oklahoma Tax Commission, pursuant to Section 304 or 415 of Title 68 of the Oklahoma Statutes, who also distribute cigarettes in a state bordering Oklahoma may store in their Oklahoma warehouse cigarettes made contraband under this section if, and only if, they have the tax stamp of another state affixed to each package of cigarettes.
2. Cigarettes or roll-your-own tobacco products made contraband pursuant to this section, without being subject to seizure or forfeiture, may be transported in, into, or through the state either:
a. on a commercial carrier with a proper bill of lading with an out-of-state destination,
b. when the tax stamp of another state is affixed to each pack of cigarettes or tobacco product transported, or
c. on a commercial carrier with a proper bill of lading to a tobacco product distributor or wholesaler licensed by the Oklahoma Tax Commission, pursuant to Section 304 or 415 of Title 68 of the Oklahoma Statutes, who also distributes cigarettes in a state bordering Oklahoma if, and only if, the packing slip accompanying the shipment indicates the shipment is for sale in another state and indicates which state, and the invoice for the shipment also indicates the shipment is for sale in a state other than Oklahoma and identifies the state in which the shipment is to be sold. The time of delivery of the shipments shall be indicated on the bill of lading of the common carrier when delivery is completed. The receiving Oklahoma distributor or wholesaler must, within twenty-four (24) hours of receiving the delivery, affix or cause to be affixed to each package of cigarettes the stamp of the state in which they are to be sold.
3. All cigarettes, tobacco products, vehicles, and property so seized shall be listed and appraised by the officer making the seizure and turned over to the county sheriff of the county in which the seizure is made and a receipt therefor taken. The person making the seizure shall immediately make a written report of the seizure, showing the name of the person making the seizure, the location of the seizure, the person from whom the property was seized, and an inventory and appraisement of the property at the usual and ordinary retail price of the articles received. The report shall be filed with the Oklahoma Tax Commission and the Attorney General. The district attorney of the county in which the seizures are made, at the request of the Oklahoma Tax Commission or Attorney General, shall file in the district court forfeiture proceedings in the name of the State of Oklahoma, as plaintiff, and in the name of the owner or person in possession, as defendant, if known, and if unknown or not susceptible to the jurisdiction of the court, in the name of the property seized. The clerk of the court shall issue a summons to the owner or person in whose possession the property was found directing the owner or person to answer within ten (10) days. At the forfeiture proceeding, if a distributor or wholesaler demonstrates through clear and convincing evidence that the possession of contraband by the distributor or wholesaler was accidental, the vehicle in which the contraband was being transported shall not be forfeited. In no case, however, shall possession of more than twenty (20) cartons of contraband product be considered by the courts as being possessed accidentally. If the property is declared forfeited and ordered sold, notice of the sale shall be posted not less than ten (10) days before the date of sale in five public places in the county in which the seizures are made. However, any cigarettes or tobacco products forfeited pursuant to this section shall be destroyed by the county sheriff. Proceeds of the sale shall be deposited with the clerk of the court, who shall, after deducting costs including the costs of prosecution, storage, and sale, pay the balance to the Oklahoma Tax Commission for deposit in the Tobacco Settlement Endowment Trust Fund.
D. The Attorney General may seek an injunction to restrain a threatened or actual violation of the Master Settlement Agreement Complementary Act by a stamping agent and to compel the stamping agent to comply with those provisions. In any action brought pursuant to this section, the state shall be entitled to recover the costs of investigation, costs of the action, and reasonable attorney fees.
E. 1. It shall be unlawful for a person to:
a. sell or distribute cigarettes, or
b. acquire, hold, own, possess, transport, import, or cause to be imported cigarettes that the person knows or should know are intended for distribution or sale in the state in violation of the Master Settlement Agreement Complementary Act. A violation of the act shall be a misdemeanor.
2. A person who violates subsection C of Section 4 of this act engages in an unfair and deceptive trade practice in violation of the provisions of the Oklahoma Consumer Protection Act.
Added by Laws 2004, c. 266, § 7, emerg. eff. May 6, 2004.
§68-360.8. Placement of products on directory - Issuance of license - Certification of compliance - Due dates for reports - Recovery of costs.
A. The Attorney General need not place on the directory the products of a tobacco product manufacturer that has not provided all the information required in the certification.
B. The consideration of a certification of a tobacco product manufacturer to have its brand added to the directory by the Attorney General shall not be considered an individual proceeding under the Administrative Procedures Act, nor shall the procedural requirements for an individual proceeding apply to that consideration.
C. No person shall be issued a license or granted a renewal of a license to act as a stamping agent unless the person has certified in writing, under penalty of perjury, that the person will comply fully with this section.
D. For calendar year 2004, if the effective date of this act is later than March 16, 2004, the first report of stamping agents required by subsection A of Section 6 of this act shall be due thirty (30) calendar days after the effective date of this act. The certifications by a tobacco product manufacturer described in subsection A of Section 4 of this act shall be due forty-five (45) calendar days after the effective date of this act. The directory described in subsection B of Section 4 of this act shall be published or made available within ninety (90) calendar days after the effective date of this act. Until the directory is published on the website of the Attorney General, all cigarette brands of tobacco product manufacturers which are on a list of the names and brand names of tobacco product manufacturers that have failed to comply with the provisions of Sections 600.21 through 600.23 of the Title 37 of the Oklahoma Statutes and published on the website of the Oklahoma Tax Commission as provided for in Section 360 of Title 68 of the Oklahoma Statutes, shall remain contraband and be subject to seizure and forfeiture as provided for in that section.
E. The Oklahoma Tax Commission may promulgate rules necessary to implement the provisions of the Master Settlement Agreement Complementary Act.
F. In any action brought by the state to enforce the Master Settlement Agreement Complementary Act, the state shall be entitled to recover the costs of investigation, expert witness fees, costs of the action, and reasonable attorney fees.
G. If a court determines that a person has violated the Master Settlement Agreement Complementary Act, the court shall order any profits, gain, gross receipts, or other benefit from the violation to be disgorged and paid to the State Treasurer for deposit in the Tobacco Settlement Endowment Trust Fund. Unless otherwise expressly provided, the remedies or penalties provided by the Master Settlement Agreement Complementary Act are cumulative to each other and to the remedies or penalties available under all other laws of this state.
Added by Laws 2004, c. 266, § 8, emerg. eff. May 6, 2004.
§68401. Definitions.
For the purpose of this article:
(a) The word "person" shall mean any individual, company, limited liability company, corporation, partnership, association, joint adventure, estate, trust, or any other group, or combination acting as a unit, and the plural as well as the singular, unless the intention to give a more limited meaning is disclosed by the context.
(b) The term "Tax Commission" shall mean the Oklahoma Tax Commission.
(c) The word "wholesaler" shall include dealers whose principal business is that of a wholesale dealer or jobber, and who is known to the trade as such, who shall sell any cigars or tobacco products to licensed retail dealers only for the purpose of resale, or giving them away, or exposing the same where they may be taken or purchased, or otherwise acquired by the retailer.
(d) The word "retailer" shall include every dealer, other than a wholesale dealer as defined above, whose principal business is that of selling merchandise at retail, who shall sell, or offer for sale, cigars or tobacco products, irrespective of quantity, number of sales, giving the same away or exposing the same where they may be taken, or purchased, or otherwise acquired by the consumer.
(e) The word "consumer" shall mean a person who comes into possession of tobacco for the purpose of consuming it, giving it away, or disposing of it in any way by sale, barter or exchange.
(f) The words "first sale" shall mean and include the first sale, or distribution, of cigars or tobacco products in intrastate commerce, or the first use or consumption of cigars, or tobacco products within this state.
(g) The words "tobacco products" shall mean any cigars, cheroots, stogies, smoking tobacco (including granulated, plug cut, crimp cut, ready rubbed and any other kinds and forms of tobacco suitable for smoking in a pipe or cigarette), chewing tobacco (including cavendish, twist, plug, scrap and any other kinds and forms of tobacco suitable for chewing), however prepared; and shall include any other articles or products made of tobacco or any substitute therefor.
(h) The term "distributing agent" shall mean and include every person in this state who acts as an agent of any person outside the state by receiving cigars and tobacco products in interstate commerce and storing such items subject to distribution or delivery, upon order from said person outside the state, to distributors, wholesale dealers and retail dealers, or to consumers. The term "distributing agent" shall also mean and include any person who solicits or takes orders for cigars and tobacco products to be shipped in interstate commerce to a person in this state by a person residing outside of Oklahoma, the tax not having been paid on such cigars and tobacco products.
(i) The term "stamp" shall mean the stamp or stamps by use of which:
1. The tax levied pursuant to the provisions of Section 401 et seq. of this title is paid;
2. The tax levied pursuant to the provisions of Section 426 of this title is paid; or
3. The payment in lieu of taxes authorized pursuant to a compact entered into by the State of Oklahoma and a federally recognized Indian tribe or nation pursuant to the provisions of subsection C of Section 346 of this title is paid.
(j) The term "drop shipment" shall mean and include any delivery of cigars or tobacco products received by any person within the state when payment for such cigars or tobacco products is made to the shipper or seller by or through a person other than the consignee.
(k) The term "cigars" shall include any roll of tobacco for smoking, irrespective of size or shape and irrespective of the tobacco being flavored, adulterated or mixed with any other ingredients, where such roll has a wrapper made chiefly of tobacco.
(l) The word "dealer" shall include every person, firm, corporation, or association of persons, who manufactures cigars or tobacco products for distribution, sale, use or consumption in the State of Oklahoma. The word "dealer" is also further defined to mean any person, firm, corporation or association of persons, who imports cigars or tobacco products from any state or foreign country, for distribution, sale, use or consumption in the State of Oklahoma.
Laws 1965, c. 238, § 2, eff. July 1, 1965; Laws 1992, c. 339, § 17, eff. Jan. 1, 1993; Laws 1993, c. 366, § 31, eff. Sept. 1, 1993.
§68-402. Amount of tax.
There shall be levied, assessed, collected, and paid in respect to the articles containing tobacco enumerated in Section 401 et seq. of this title, a tax in the following amounts:
1. Little Cigars. Upon cigars of all descriptions made of tobacco, or any substitute therefor, and weighing not more than three (3) pounds per thousand, four (4) mills for each cigar. Provided, that the tax levied on the products coming under this paragraph shall not apply if the tax on such products is reported and paid as cigarette tax under Sections 301 through 325 of this title;
2. Cigars. Upon cigars of all descriptions made of tobacco, or any substitute therefor, weighing more than three (3) pounds per thousand and having a manufacturer's recommended retail selling price, under the Federal Code, of not exceeding four cents ($0.04) per cigar, one cent ($0.01) for each cigar;
3. Cigars. Upon all other cigars of all descriptions made of tobacco, or any substitute therefor, and weighing more than three (3) pounds per thousand, Twenty Dollars ($20.00) per thousand. For the purpose of computing the tax, cheroots, stogies, etc., are hereby classed as cigars;
4. Smoking Tobacco. Upon all smoking tobacco including granulated, plug cut, crimp cut, ready rubbed and other kinds and forms of tobacco prepared in such manner as to be suitable for smoking in a pipe or cigarette, the tax shall be twenty-five percent (25%) of the factory list price exclusive of any trade discount, special discount or deals; and
5. Chewing Tobacco. Upon chewing tobacco, smokeless tobacco, and snuff, the tax shall be twenty percent (20%) of the factory list price exclusive of any trade discount, special discount or deals.
It shall not be permissible for a retailer to advertise that the retailer will absorb the tax due on the taxable merchandise described herein. Such tax shall be paid by the consumer.
Notwithstanding any other provision of law, the tax levied pursuant to the provisions of Section 401 et seq. of this title shall be part of the gross proceeds or gross receipts from the sale of cigars or tobacco products, or both, as those terms are defined in paragraph 7 of Section 1352 of this title.
Laws 1965, c. 238, § 2, eff. July 1, 1965; Laws 1972, c. 48, § 1, emerg. eff. March 10, 1972; Laws 1985, c. 179, § 73, operative July 1, 1985; Laws 1999, c. 390, § 6, emerg. eff. June 8, 1999.
§684021. Additional tax on tobacco products Rates Apportionment of revenues.
In addition to the tax levied by Section 402 of this title, there is hereby levied upon the sale, use, exchange or possession of articles containing tobacco as defined in said Section 402, a tax in the following amounts:
(a) Upon little cigars of all descriptions made of tobacco, or any substitute therefor, and weighing not more than three (3) pounds per thousand, two and onehalf (2 1/2) mills for each cigar. Provided, that the tax levied on the products coming under this paragraph shall not apply if the tax on such products is reported and paid as cigarette tax under Sections 301 through 325 of this title.
(b) Upon cigars of all descriptions made of tobacco, or any substitute therefor, and weighing more than three (3) pounds per thousand, and having a manufacturer's recommended retail selling price, under the Federal Code, of more than four cents ($0.04) for each cigar, Ten Dollars ($10.00) per thousand. For the purpose of computing the tax, cheroots, stogies, etc., are hereby classed as cigars.
(c) Upon all smoking tobacco including granulated, plug cut, crimp cut, ready rubbed and other kinds and forms of tobacco prepared in such manner as to be suitable for smoking in a pipe or cigarette, the tax shall be fifteen percent (15%) of the factory list price exclusive of any trade discount, special discount or deals.
(d) Upon chewing tobacco, smokeless tobacco, and snuff, the tax shall be ten percent (10%) of the factory list price exclusive of any trade discount, special discount or deals.
This tax shall be paid by the consumer and no retailer may advertise that he will pay or absorb this tax.
(e) The tax herein levied on tobacco products shall be evidenced by stamps and collected on the same basis and in the same manner and in all respects as the tax levied by the Tobacco Products Tax Law. The revenue from this additional tax shall be apportioned by the Oklahoma Tax Commission in the same manner as provided in Section 404 of this title, for the apportionment of other tobacco products tax revenue.
Amended by Laws 1985, c. 179, § 74, operative July 1, 1985.
§684022. Additional tax on tobacco products Rates Apportionment of records.
In addition to the tax levied by Section 402 of this title, and 4021 of Section 2, Chapter 48, Oklahoma Session Laws 1972 (68 O.S. Supp. 1972, Section 4021), there is hereby levied upon the sale, use, exchange or possession of articles containing tobacco as defined in said Section 402, a tax in the following amounts:
(a) Upon little cigars of all descriptions made of tobacco, or any substitute therefor, and weighing not more than three (3) pounds per thousand, two and onehalf (2 1/2) mills for each cigar. Provided, that the tax levied on the products coming under this paragraph shall not apply if the tax on such products is reported and paid as cigarette tax under Sections 301 et seq. of this title.
(b) The revenue from the additional tax herein levied shall be apportioned by the Oklahoma Tax Commission and transmitted to the State Treasurer who shall deposit the same in the General Revenue Fund of the State of Oklahoma.
Laws 1979, c. 195, § 6, eff. July 1, 1979.
§68-402-3. Tobacco products tax in addition to tax levied in Sections 402 to 402-2 - Rates - Apportionment.
A. In addition to the tax levied in Sections 402, 402-1 and 402-2 of Title 68 of the Oklahoma Statutes, effective January 1, 2005, there shall be levied, assessed, collected, and paid in respect to the articles containing tobacco enumerated in Section 401 et seq. of Title 68 of the Oklahoma Statutes, a tax in the following amounts:
1. Little Cigars. Upon cigars of all descriptions made of tobacco, or any substitute therefor, and weighing not more than three (3) pounds per thousand, twenty-seven (27) mills for each cigar. Provided, that the tax levied on the products coming under this paragraph shall not apply if the tax on such products is reported and paid as cigarette tax under Sections 301 through 325 of Title 68 of the Oklahoma Statutes;
2. Cigars. Upon all other cigars of all descriptions made of tobacco, or any substitute therefor, and weighing more than three (3) pounds per thousand, Ninety Dollars ($90.00) per thousand. For the purpose of computing the tax, cheroots, stogies, etc., are hereby classed as cigars;
3. Smoking Tobacco. Upon all smoking tobacco including granulated, plug cut, crimp cut, ready rubbed and other kinds and forms of tobacco prepared in such manner as to be suitable for smoking in a pipe or cigarette, the tax shall be forty percent (40%) of the factory list price exclusive of any trade discount, special discount or deals; and
4. Chewing Tobacco. Upon chewing tobacco, smokeless tobacco, and snuff, the tax shall be thirty percent (30%) of the factory list price exclusive of any trade discount, special discount or deals.
B. Except as provided in subsection C of this section, the revenue resulting from the additional tax levied in subsection A of this section shall be apportioned by the Oklahoma Tax Commission and transmitted to the State Treasurer as follows:
1. Twenty-two and six-hundredths percent (22.06%) shall be placed to the credit of the Health Employee and Economy Improvement Act Revolving Fund created in Section 1 of Enrolled Senate Bill No. 1546 of the 2nd Session of the 49th Oklahoma Legislature;
2. Three and nine-hundredths percent (3.09%) shall be placed to the credit of the Comprehensive Cancer Center Debt Service Revolving Fund created in Section 5 of this act;
3. Seven and fifty-hundredths percent (7.50%) shall be placed to the credit of the Trauma Care Assistance Revolving Fund created in Section 1-2522 of Title 63 of the Oklahoma Statutes;
4. Three and nine-hundredths percent (3.09%) shall be placed to the credit of the Oklahoma State University College of Osteopathic Medicine Revolving Fund created in Section 6 of this act;
5. Twenty-six and thirty-eight-hundredths percent (26.38%) shall be placed to the credit of the Oklahoma Health Care Authority Medicaid Program Fund created in Section 5020 of Title 63 of the Oklahoma Statutes for the purposes of maintaining programs and services funded under the federal "Jobs and Growth Tax Relief Reconciliation Act of 2003", reimbursing city/county-owned hospitals, increasing emergency room physician rates, and providing TEFRA 134, also known as "Katie Beckett" services;
6. Two and sixty-five-hundredths percent (2.65%) shall be placed to the credit of the Department of Mental Health and Substance Abuse Services Revolving Fund created in Section 2-303 of Title 43A of the Oklahoma Statutes;
7. Forty-four-hundredths of one percent (0.44%) shall be placed to the credit of the Belle Maxine Hilliard Breast and Cervical Cancer Treatment Revolving Fund created in Section 1 of Enrolled House Bill No. 2552 of the 2nd Session of the 49th Oklahoma Legislature;
8. One percent (1%) shall be placed to the credit of the Teachers' Retirement System Revolving Fund created in Section 158 of Title 62 of the Oklahoma Statutes;
9. Two and seven-hundredths percent (2.07%) shall be placed to the credit of the Education Reform Revolving Fund created in Section 41.29b of Title 62 of the Oklahoma Statutes;
10. Sixty-six-hundredths percent (.66%) shall be placed to the credit of the Tobacco Prevention and Cessation Revolving Fund created in Section 1-105d of Title 63 of the Oklahoma Statutes;
11. Sixteen and eighty-three-hundredths percent (16.83%) shall be placed to the credit of the General Revenue Fund; and
12. For fiscal years beginning July 1, 2004, and ending June 30, 2006, fourteen and twenty-three-hundredths percent (14.23%) shall be apportioned to municipalities and counties that levy a sales tax, in the proportions which total municipal and county sales tax revenue was apportioned by the Tax Commission in the preceding month.
For fiscal years beginning July 1, 2006, and thereafter, the apportionment percentage specified in paragraph 12 of this subsection will be adjusted by dividing the total municipal and county sales tax revenue collected in the calendar year immediately preceding the commencement of the fiscal year by the sum of the state sales tax revenue and total municipal and county sales tax revenue collected in the same year. This ratio shall be divided by the ratio of the total municipal and county sales tax revenue collected in the calendar year beginning January 1, 2004, and ending December 31, 2004, divided by the sum of the state sales tax revenue and total municipal and county sales tax revenue collected in the same year. The resulting quotient shall be multiplied by fourteen and twenty-three-hundredths percent (14.23%) to determine the apportionment percentage for the fiscal year.
For fiscal years beginning July 1, 2006, and thereafter, any adjustment to the percentage of revenues apportioned to municipalities and counties shall be reflected in the percent of revenues apportioned to the General Revenue Fund.
C. The net amount of any revenue resulting from a payment in lieu of excise taxes on little cigars, cigars, smoking tobacco and chewing tobacco levied by this section, pursuant to a compact with a federally recognized Indian tribe or nation after deductions for deposits into trust accounts pursuant to such compacts, shall be apportioned by the Tax Commission and transmitted to the State Treasurer as follows:
1. Thirty-three and forty-nine-hundredths percent (33.49%) shall be placed to the credit of the Health Employee and Economy Improvement Act Revolving Fund created in Section 1 of Enrolled Senate Bill No. 1546 of the 2nd Session of the 49th Oklahoma Legislature;
2. Four and sixty-nine-hundredths percent (4.69%) shall be placed to the credit of the Comprehensive Cancer Center Debt Service Revolving Fund created in Section 5 of this act;
3. Eleven and thirty-nine-hundredths percent (11.39%) shall be placed to the credit of the Trauma Care Assistance Revolving Fund created in Section 1-2522 of Title 63 of the Oklahoma Statutes;
4. Four and sixty-nine-hundredths percent (4.69%) shall be placed to the credit of the Oklahoma State University College of Osteopathic Medicine Revolving Fund created in Section 6 of this act;
5. Forty and six-hundredths percent (40.06%) shall be placed to the credit of the Oklahoma Health Care Authority Medicaid Program Fund created in Section 5020 of Title 63 of the Oklahoma Statutes for the purposes of maintaining programs and services funded under the federal "Jobs and Growth Tax Relief Reconciliation Act of 2003", reimbursing city/county-owned hospitals, increasing emergency room physician rates, and providing TEFRA 134, also known as "Katie Beckett" services;
6. Four and one-hundredths percent (4.01%) shall be placed to the credit of the Department of Mental Health and Substance Abuse Services Revolving Fund created in Section 2-303 of Title 43A of the Oklahoma Statutes;
7. Sixty-seven-hundredths percent (0.67%) shall be placed to the credit of the Belle Maxine Hilliard Breast and Cervical Cancer Treatment Revolving Fund created in Section 1 of Enrolled House Bill No. 2552 of the 2nd Session of the 49th Oklahoma Legislature; and
8. One percent (1%) shall be placed to the credit of the Tobacco Prevention and Cessation Revolving Fund created in Section 1-105d of Title 63 of the Oklahoma Statutes.
D. It shall not be permissible for a retailer to advertise that the retailer will absorb the tax due on the taxable merchandise described herein. Such tax shall be paid by the consumer.
Added by Laws 2004, c. 322, § 10, eff. Dec. 1, 2004 (State Question No. 713, Legislative Referendum No. 336, adopted at election held Nov. 2, 2004).
§68403. Payment by affixing stamps.
(a) The excise taxes levied by this article shall be paid by affixing stamps in the manner and at the time herein set forth. In the case of cigars, including fivepack and other small packs, stogies and cheroots, the stamps shall be affixed to the box, or container, in which or from which normally sold at wholesale. Wholesalers and jobbers shall affix the required stamps within seventytwo (72) hours after such tobacco products are received by them. Any retailer shall have twentyfour (24) hours within which to affix the stamps after such tobacco products are received by him, or them. Provided that the Tax Commission may, in its discretion, where it is practical and reasonable for the enforcement of the collection of taxes provided hereunder, promulgate such rules and regulations as to permit cigars, stogies, cheroots, and tobacco products, to remain unstamped in the hands of the wholesalers and jobbers until the original case or crate is broken, unpacked or sold.
(b) In the case of tobacco products wrapped in packages of two (2) pounds or less, the stamps shall be affixed to the containers in which or from which the individual packages are normally sold at wholesale and the stamps shall be affixed by wholesalers and jobbers within seventytwo (72) hours after such products are received by them, and by any retailer within the twentyfour (24) hours of receipt by him or them of any such products. Such goods must be stamped before being sold. All retail dealers in manufactured tobacco products, purchasing or receiving such commodities from without the state, whether the same shall have been ordered through a wholesaler or jobber in this state and/or by drop shipment and/or otherwise, shall within five (5) days after receipt of same, mail a duplicate invoice of all such purchases or receipts to the Tax Commission. Failure to furnish duplicate invoices as required shall be deemed a misdemeanor, and, upon conviction, be punishable by a fine of not more than One Hundred Dollars ($100.00) for each offense, or imprisonment in the county jail for a period not exceeding thirty (30) days.
(c) It is the intent and purpose of this section to require all manufacturers within this state, wholesale dealers, jobbers, distributors and retail dealers, to affix the stamps provided for in this section to taxable commodities, but when the stamps have been affixed as required herein, no further or other stamp shall be required regardless of how often such articles may be sold or resold within this state.
Laws 1965, c. 238, § 2.
§68403.1. Procedures for collection of certain payments in lieu of excise taxes and payment of excise taxes.
The Oklahoma Tax Commission is hereby authorized and empowered, if in its discretion it deems practical and reasonable, to establish procedures for payment of excise taxes levied in Sections 401 et seq. of this title, for the collection from a wholesaler, jobber or warehouseman of payments in lieu of excise taxes authorized pursuant to a compact entered into by the State of Oklahoma and a federally recognized Indian tribe or nation pursuant to the provisions of subsection C of Section 1 of this act or for the payment of the tax specified in Section 10 of this act, in respect to articles containing tobacco, pursuant to monthly tobacco products tax reports in lieu of payment by purchasing and affixing stamps, notwithstanding the provisions of Sections 403 et seq. of this title. Provided, exercise by the Tax Commission of the authority granted herein shall be by adoption of rules and regulations necessary to establish procedures for collection of such tax through monthly reporting procedures consistent with the provisions of Sections 401 et seq. of this title, other than those provisions relating directly to payment of such tax by purchasing and affixing stamps.
In the event the Tax Commission shall determine to collect such tax through monthly reporting procedures and adopt rules and regulations therefor:
1. All provisions of Sections 401 et seq. of this title relating to unstamped tobacco products shall be interpreted to include and shall be applicable to all tobacco products for which the tax required by law has not been paid;
2. No person, dealer, distributing agent or wholesaler, as defined in Section 401 of this title, shall possess, sell, use, exchange, barter, give away or in any manner deal with any tobacco products within this state upon which such tax is levied and unpaid, unless such person, dealer, retailer, distributing agent or wholesaler holds a valid tobacco license issued pursuant to Section 415 of this title; and
3. Any person required to report and remit such taxes or payments in lieu of taxes required pursuant to a compact authorized by subsection C of Section 1 of this act to the Tax Commission shall be allowed a discount of two percent (2%) of the tax due for maintaining and collecting such tax or payments for the benefit of the state, if such tax or payment is timely reported and remitted.
Laws 1980, c. 207, § 3, emerg. eff. May 29, 1980; Laws 1992, c. 339, § 18, eff. Jan. 1, 1993.
§68-403.2. Unlawful affixing of stamp - Prima facie evidence of violation.
A. It shall be unlawful to affix a stamp to any package or container of tobacco products or to sell, offer for sale, or import into this state any package or container of tobacco products:
1. Which bears any label or notice prescribed by the United States Department of Treasury to identify tobacco products intended for export and exempt from tax by the United States pursuant to Section 5704(b) of Title 26 of the United States Code or any notice or label described in Section 290.185 of Title 27 of the United States Code of Federal Regulations;
2. Which is not labeled in conformity with the provisions of the Federal Cigarette Labeling and Advertising Act, or any other federal requirement for the placement of labels, warnings or other information applicable to packages or containers of tobacco products intended for domestic consumption;
3. Upon which all federal taxes due have not been paid or which is not in compliance with all federal trademark and copyright laws; or
4. The packaging of which has been modified or altered by a person other than the manufacturer or person specifically authorized by the manufacturer, including, but not limited to, the placement of a sticker or label to cover information on the package or container.
Possession of more than thirty (30) ounces of tobacco products in packages or containers bearing Oklahoma stamps in violation of this subsection by a person other than an employee of this state or the federal government performing official duties relating to enforcement of the provisions of Section 401 et seq. of this title shall constitute prima facie evidence of a violation of the provisions of this subsection.
B. Except as otherwise provided by law, the Attorney General shall enforce the provisions of this section.
Added by Laws 1999, c. 162, § 4.
NOTE: Editorially renumbered from § 403.1 of this title to avoid duplication in numbering.
NOTE: Section 8 of Laws 1999, c. 162 provides: "This act shall become effective thirty (30) days after approval of this act by the Governor." Laws 1999, c. 162 was approved by the Governor on May 17, 1999.
§68404. Transactions subject to taxation Revenue purpose Disposition of revenue.
The sale, barter or exchange of tobacco products or possession of tobacco products for consumption, is hereby declared to be subject to taxation authorized by Section 12 of Article X of the Oklahoma Constitution, and it is the purpose and intention of this article to provide revenue for the expense of the state government. The revenue, including interest and penalties, collected under this article shall be paid monthly by the Tax Commission to the State Treasurer to be placed in the General Revenue Fund, to be paid out pursuant to direct appropriation by the Legislature.
Amended by Laws 1987, c. 5, § 141, operative March 31, 1987.
§68-405. Repealed by Laws 1994, c. 278, § 38, eff. Sept. 1, 1994.
§68406. Wholesalers and jobbers supplying and charging retailers with stamps.
It shall be the duty of a wholesaler or jobber to supply and charge to the retailer the necessary stamps to cover any and all drop shipments of tobacco products and cigars billed to the retailer or consumer by the wholesaler or jobber, and the wholesaler or jobber shall be liable to the Tax Commission, under his bond, to perform such service. No wholesaler or jobber shall be permitted to sell or transfer stamps to any retailer or consumer other than to customers who purchased drop shipments directly through him.
Laws 1965, c. 238, § 2.
§68407. Regulations Punishment for prohibited practices or hindering inspection.
It shall be provided by regulations of the Tax Commission the methods of breaking packages, forms and kinds of containers, and methods of affixing stamps, that shall be employed by persons subject to the tax levied by this Article which will make possible the enforcement of payment by inspection; and any such person engaging in or permitting such practices as are prohibited by this article, or in any other practice which makes it difficult to enforce the provisions of this article by inspection, and any person or agent thereof who shall upon demand of any officer or agent of the Tax Commission refuse to allow full inspection of the premises or any part thereof, or who shall hinder or in anywise delay or prevent such inspection when demand is made therefor, shall be guilty of a misdemeanor and shall, upon conviction, be fined not more than Two Hundred Dollars ($200.00) for each offense, or imprisonment in the county jail for a period not exceeding sixty (60) days or both.
Laws 1965, c. 238, § 2.
§68408. Purchase and sale of stamps Design, etc. Bond from manufacturer of stamps Matters to appear on stamps.
(a) The Tax Commission shall purchase stamps in the proper denominations necessary to carry out the provisions of this article, and shall sell the same only to licensed manufacturers, wholesalers, warehousemen and/or jobbers doing business within the state of Oklahoma upon demand and payment therefor. All orders for stamps must be accompanied by cash, cashier's check or money order, made payable to the Oklahoma Tax Commission; and the Commission shall be responsible for the custody and sale of such stamps, and for the disposition of the proceeds of such sales as hereinafter provided. Such stamps shall be of such design, character, color combination, color changes, sizes and material as the Tax Commission may, by its rules and regulations determine to afford the best security to the state. The Commission may, by its rules and regulations, require of the manufacturer from whom it purchases such stamps a bond in an amount to be determined by the Commission, containing such conditions as the Commission may deem necessary in order to protect the state against loss.
(b) The stamp, when placed on cigars and tobacco products by the wholesaler, manufacturer, warehouseman, jobber, retailer and/or consumer, shall state the amount of the tax, the payment of which is evidenced thereby, and shall contain the words "Oklahoma Stamp Tax".
Laws 1965, c. 238, § 2.
§68409. Offenses respecting stamps.
Whoever willfully removes or otherwise prepares any adhesive stamps, with intent to use, or cause the same to be used, after it has already been used; or knowingly or willfully buys, sells, offers for sale, or gives away, any such washed or restored stamp to any person, or knowingly uses the same, or has in his possession any washed, restored or altered stamp which has been removed from the articles to which it had been previously affixed, or whoever, for the purpose of indicating the payment of any tax hereunder, reuses any stamp which has heretofore been used for the purpose of paying any tax provided in this article, or whoever buys, sells, offers for sale, or has in his or its possession, any counterfeit stamps, shall be guilty of a felony and, upon conviction, shall be punished by a fine of not more than One Thousand Dollars ($1,000.00), or by imprisonment for not more than five (5) years, or both.
Laws 1965, c. 238, § 2.
§68410. Administration and enforcement of Article.
The Tax Commission shall administer and enforce all provisions of this article. It shall have the power to enter upon the premises of any taxpayer and to examine, or cause to be examined by an agent or representative designated by it for such purpose, any books, invoices, papers, records or memoranda bearing upon the amount of taxes payable, and to secure other information directly concerned in the enforcement of this article.
Laws 1965, c. 238, § 2.
§68411. Temporary, transient or itinerant business.
In case of any person engaging in a temporary, transient, or itinerant business, which is taxable under the provisions of this article, the entire tax shall be paid upon demand by the Tax Commission, or any authorized agent thereof, and in case the tax is not paid upon demand, all penalties provided for by this article shall immediately apply.
Laws 1965, c. 238, § 2.
§68412. Unstamped merchandise Bond.
(a) Every wholesaler, jobber, retailer or consumer, who purchases or allows to come into his possession any unstamped merchandise coming under the scope of this article, shall file with the Tax Commission a surety or collateral or cash bond in such amount as the Commission may prescribe but not less than Five Hundred Dollars ($500.00), payable to the State of Oklahoma and conditioned upon compliance with the provisions of this article and the rules and regulations of the Tax Commission.
(b) Any consumer who purchases or brings into this state unstamped cigars or tobacco products whereon the tax would be more than twentyfive cents ($0.25) is subject to the tax thereon. Upon failure to pay the tax levied in this article, the consumer shall be subject to a fine of not more than Five Hundred Dollars ($500.00) or not less than Twentyfive Dollars ($25.00).
Laws 1965, c. 238, § 2.
§68413. Common carriers - Transportation of tobacco products and cigars - Sales - Statement of consignment - Examination of records - Monthly reports.
(a) The right of a common carrier in this state to carry unstamped cigars and tobacco products shall not be affected hereby; provided, that common carriers delivering untaxed tobacco products to any person in this state for the purpose of selling or consuming untaxed tobacco products in this state in violation of this article shall be subject to seizure of the shipments and forfeiture of the inventory pursuant to the provisions of Section 417 of this title. Provided further, that should any such carrier sell any cigars and tobacco products in this state, such sale shall be subject to the stamp tax and other provisions of this article and to the rules and regulations of the Tax Commission. The common carrier transporting tobacco products and cigars to a point within this state, or a bonded warehouseman or bailee having in its possession tobacco products and cigars, shall transmit to the Commission a statement of such consignment of tobacco products and cigars, showing the date, point of origin, point of delivery, and to whom delivered. All common carriers or bailees or warehousemen shall permit an examination by the Tax Commission, or its agents or legally authorized representatives, of their records relating to the shipment or receipt of tobacco products and cigars. Any person who fails or refuses to transmit to the Commission the aforesaid statement, or who refuses to permit the examination of his records by the Commission or its legally authorized agents or representatives, shall be guilty of a misdemeanor and shall be subject to a fine of not to exceed Five Hundred Dollars ($500.00) and not less than Twenty-five Dollars ($25.00).
(b) Wholesalers, jobbers, and/or warehousemen shall make a monthly report to the Tax Commission. Such report must be received in the office of the Tax Commission not later than the fifteenth day of each month, showing purchases and invoices of all merchandise coming under this article, for the previous month; and the report shall also show the invoice number, the name and address of the consignee and consignor, the date, and such other information as may be requested by the Tax Commission. Retailers or consumers purchasing tobacco products and cigars in drop shipments shall be required to make monthly reports to the Oklahoma Tax Commission, as are required of wholesale dealers.
Laws 1965, c. 238, § 2, eff. July 1, 1965; Laws 1992, c. 339, § 19, eff. Jan. 1, 1993.
§68414. Trucks and vehicles Unstamped merchandise.
(a) Each truck or vehicle wherefrom cigars or tobacco products are sold shall be considered as a place of business and required to have a wholesale license and a bond of not less than Five Hundred Dollars ($500.00).
(b) Any person operating a truck or vehicle by selling, exchanging, or giving away unstamped merchandise covered by this article shall be deemed guilty of violation of same and shall be penalized as hereinbefore set forth, and unstamped merchandise handled by him shall be subject to confiscation by authorized agents of the Tax Commission or duly authorized peace officers.
(c) After seizure or confiscation by such agent or officer, the merchandise and property shall be held until all taxes, interest and penalties due have been paid. If not paid within five (5) days after date of seizure, it shall be sold at public sale by the sheriff of the county where confiscated, after being advertised by posting of notice of such sale in five public places in the county where the sale is to occur. The proceeds of the sale shall be applied to taxes, interest and penalties due and to the cost of the sale, and the remainder, if any, shall be paid to the State Treasurer, by the sheriff conducting such sale, to be deposited to the credit of the General Revenue Fund.
Laws 1965, c. 238, § 2.
§68415. License of purchasers of unstamped products.
All wholesalers, jobbers, retailers and consumers who purchase unstamped cigars and tobacco products covered in this article shall be required to purchase a tobacco license annually, the cost of which shall be Five Dollars ($5.00).
Laws 1965, c. 238, § 2.
§68-417. Unstamped or unlawfully stamped tobacco products - Seizure.
A. All unstamped tobacco products upon which a tax is levied by Section 401 et seq. of this title and all tobacco products stamped, sold, offered for sale, or imported into this state in violation of the provisions of Section 4 of this act, found in the possession, custody or control of any person for the purpose of being consumed, sold or transported from one place to another in this state, for the purpose of evading or violating the provisions of Section 401 et seq. of this title, or with intent to avoid payment of the tax imposed thereunder, may be seized by any authorized agent of the Oklahoma Tax Commission or any sheriff, deputy sheriff or police within the state. Tobacco products from the time of seizure shall be forfeited to the State of Oklahoma. A proper proceeding shall be filed in the district court of the county of seizure, to maintain such seizure and prosecute the forfeiture as herein provided; the provisions of this section shall not apply, however, where the tax on such unstamped tobacco products does not exceed One Dollar ($1.00).
B. All such tobacco products so seized shall first be listed and appraised by the officer making such seizure and turned over to the sheriff of the county in which the seizure is made, and a receipt taken therefor.
C. The person making such seizure shall immediately make and file a written report thereof to the Tax Commission, showing the name of the person making such seizure, the place where seized, the person from whom seized, the property seized and an inventory and appraisement thereof, which inventory shall be based on the usual and ordinary retail price or value of the articles seized, or the Attorney General, in the case of tobacco products stamped, sold, offered for sale, or imported into this state in violation of the provisions of Section 4 of this act. The district attorney of the county in which such seizure is made shall, at the request of the Tax Commission or Attorney General, file in the district court forfeiture proceedings in the name of the State of Oklahoma against the owner or person in possession of the property seized, if known, and if unknown, against the property seized. The clerk of the court shall issue summons to the owner or person in whose possession such property was found. Summons so issued and all procedure thereafter shall be governed by statutes relating to procedure in civil actions. If personal service cannot be had, or if suit be filed against the property seized, service may be obtained by the posting of notices in five public places within the county. The notice shall direct the owner, or if the owner be unknown, the person in possession of the property seized, to answer the petition filed within twenty (20) days from the date of the posting of such notices. The district attorney shall within three (3) days after the posting of the notices cause a copy of the same to be mailed to any defendant on whom personal service was not had, addressed to the defendant's last-known address. If, after a full hearing upon the petition, the court finds that the property seized is forfeited to the State of Oklahoma, the court shall direct to the sheriff to sell the property at public auction ten (10) days after the posting of notices of sale in five public places within the county; provided, tobacco products as described in Section 4 of this act shall only be sold for export outside the United States or as otherwise permitted by federal law. The proceeds of the sale shall be deposited with the clerk of the court who shall, after deducting costs including the cost of the sale, pay same to the Tax Commission as tobacco products tax collected, or in the case of tobacco products seized as being in violation of the provisions of Section 4 of this act, to the Attorney General. The Attorney General shall remit the amount of tobacco products tax, if any be due, including all penalties and interest due, to the Tax Commission as tobacco products tax collected and shall deposit the remainder to the revolving fund created in Section 7 of this act.
D. The seizure and sale of such tobacco products shall not relieve the person from whom such tobacco products were seized from prosecution or the payment of penalties. The purchaser of forfeited tobacco products shall pay the regular tobacco products tax and shall place proper stamps thereon before any of such tobacco products are sold or consumed.
E. The forfeiture provisions of Section 401 et seq. of this title shall only apply to persons having possession of or transporting tobacco products with intent to barter, sell or give away the same.
Added by Laws 1965, c. 238, § 2. Amended by Laws 1999, c. 162, § 5, eff. June 17, 1999.
§68-418. Transportation or possession of unstamped tobacco products - Penalties - Unlawful affixing of stamp - Administrative fines - Revocation of license.
A. It shall be unlawful for any person to transport or possess unstamped tobacco products where the tax on such unstamped tobacco products exceeds the sum of One Dollar ($1.00).
B. Except as otherwise provided in subsections C and D of this section, any person found guilty of violating the provisions of Section 401 et seq. of this title shall be deemed guilty of a misdemeanor, and shall upon conviction be punished by a fine of not more than Five Hundred Dollars ($500.00) or by confinement in the county jail for not to exceed thirty (30) days, or by both such fine and imprisonment.
C. Any retailer violating the provisions of Section 4 of this act shall:
1. For a first offense, be punished by an administrative fine of not more than One Hundred Dollars ($100.00);
2. For a second offense, punished by an administrative fine of not more than One Thousand Dollars ($1,000.00); and
3. For a third or subsequent offense, be punished by an administrative fine of not more than Five Thousand Dollars ($5,000.00).
D. Any wholesaler, distributing agent or dealer violating the provisions of Section 4 of this act shall:
1. For a first offense, be punished by an administrative fine of not more than Five Thousand Dollars ($5,000.00); and
2. For a second or subsequent offense, be punished by an administrative fine of not more than Twenty Thousand Dollars ($20,000.00).
Administrative fines collected pursuant to the provisions of this subsection shall be deposited to the revolving fund created in Section 7 of this act.
E. The Oklahoma Tax Commission shall immediately revoke the license of a person punished for a violation pursuant to the provisions of paragraph 3 of subsection C of this section or a person punished for a violation pursuant to the provisions of subsection D of this section. A person whose license is so revoked shall not be eligible to receive another license pursuant to the provisions of Section 301 et seq. of this title for a period of ten (10) years.
Added by Laws 1965, c. 238, § 2. Amended by Laws 1999, c. 162, § 6, eff. June 17, 1999.
§68419. Exempt sales.
The following sales are hereby exempted from the tobacco products tax levied pursuant to the provisions of Section 401 et seq. of this title:
1. All tobacco products sold to veterans hospitals and stateoperated domiciliary homes for veterans located in the State of Oklahoma, for sale or distribution to disabled exservicemen or disabled exservicewomen interned in or inmates of such hospitals, or residents of such homes;
2. All sales to a federally recognized Indian tribe or nation which has entered into a compact with the State of Oklahoma pursuant to the provisions of subsection C of Section 1 of this act or to a licensee of such a tribe or nation, upon which the payment in lieu of taxes required by the compact has been paid; and
3. All sales to a federally recognized Indian tribe or nation or to a licensee of such a tribe or nation upon which the tax levied pursuant to the provisions of Section 10 of this act has been paid.
Laws 1965, c. 238, § 2, eff. July 1, 1965; Laws 1992, c. 339, § 20, eff. Jan. 1, 1993.
§68420. Rules and regulations.
The Oklahoma Tax Commission shall prescribe such rules and make such regulations as to the sale of such tobacco products and the exemption from the tobacco products tax thereon, as shall be deemed necessary to comply with the provisions of the preceding section.
Laws 1965, c. 238, § 2.
§68-420.1. Maintenance of copies of invoices or equivalent documentation.
A. Each distributor of tobacco products, as defined in Section 401 of Title 68 of the Oklahoma Statutes, shall maintain copies of invoices or equivalent documentation for each of its facilities for every transaction in which the distributor is the seller, purchaser, consignor, consignee, or recipient of tobacco products. The invoices or documentation shall contain the distributor's tobacco license number and the quantity by brand style of the tobacco products involved in the transaction.
B. Each retailer of tobacco products, as defined in Section 401 of Title 68 of the Oklahoma Statutes, shall maintain copies of invoices or equivalent documentation for every transaction in which the retailer receives or purchases tobacco products at each of its facilities. The invoices or documentation shall show the name and address of the distributor from whom, or the address of another facility of the same retailer from which, the tobacco products were received, the quantity of each brand style received in such transaction and the retail cigarette license number or sales tax license number.
Added by Laws 2005, c. 479, § 8, eff. July 1, 2005.
§68421. Restriction on exempt sales Possession by others.
The sale of such tobacco products under the two preceding sections shall be restricted to sales or distribution to inmates of such veterans hospitals, or residents of such state operated domiciliary homes for veterans, as shown by the records thereof, for their own personal use and consumption. Possession of tobacco products taxed under this article, which have been purchased or received from any such veterans hospital or any such home by any person other than an inmate or resident thereof, shall be deemed a misdemeanor and punishable by a fine of Two Hundred Dollars ($200.00) for each offense.
Laws 1965, c. 238, § 2.
§68422. Sellers.
All manufacturers, wholesalers, jobbers, retailers, or other person, selling or distributing such tobacco products under the three preceding sections shall comply with the provisions of such sections, and the rules and regulations of the Oklahoma Tax Commission as to such sale or distribution, and failure to so comply shall constitute grounds for revocation of any license issued to said manufacturer, wholesaler, jobber, retailer or other person, by the Tax Commission.
Laws 1965, c. 238, § 2.
§68423. Intention of Legislature.
It is hereby declared to be the intention of the Legislature that this act be construed as being an amendment and revision of the present tobacco tax law and that the repeal and reenactment of said law herein for such purpose shall not affect any license issued or any tax liability accrued under such prior law.
Laws 1965, c. 238, § 2.
§68-424. Application of §§ 425 to 428 of this title.
The provisions of Sections 9 through 12 of this act shall not apply to a federally recognized Indian tribe or nation which has entered into a compact with the State of Oklahoma pursuant to the provisions of subsection C of Section 1 of this act or to a licensee of such a tribe or nation during the period that such compact is effective.
Added by Laws 1992, c. 339, § 8, eff. Jan. 1, 1993.
§68-425. Definitions.
As used in Sections 9 through 13 of this act:
1. "Tribally owned or licensed store" means a store or place of business which is owned and operated by a federally recognized Indian tribe or nation, other than a federally recognized Indian tribe or nation which has entered into a compact with the State of Oklahoma pursuant to the provisions of subsection C of Section 1 of this act during the period that such compact is effective, on Indian country within the territorial jurisdiction of that tribe or nation or which is duly licensed by such tribe or nation pursuant to tribal laws or ordinances to conduct business located on Indian country within the territorial jurisdiction of that tribe or nation;
2. "Federally recognized Indian tribe or nation" means an Indian tribal entity which is recognized by the United States Bureau of Indian Affairs as having a special relationship with the United States;
3. "Indian country" means:
a. land held in trust by the United States of America for the benefit of a federally recognized Indian tribe or nation,
b. all land within the limits of any Indian reservation under the jurisdiction of the United States Government, notwithstanding the issuance of any patent, and including rights-of-way running through the reservation,
c. all dependent Indian communities within the borders of the United States whether within the original or subsequently acquired territory thereof, and whether within or without the limits of a state, and
d. all Indian allotments, the Indian titles to which have not been extinguished, including individual allotments held in trust by the United States or allotments owned in fee by individual Indians subject to federal law restrictions regarding disposition of said allotments and including rights-of-way running through the same;
4. "Member of the tribe" or "tribal member" means a person who is duly enrolled within the membership of the federally recognized Indian tribe or nation which owns or licenses the store;
5. "Nonmember of the tribe or nation" or "nontribal member" means, with respect to a particular Indian tribe or nation, any person who is not a duly enrolled member of that tribe or nation, and shall include any person who is a member of another Indian tribe or nation but not a member of that tribe or nation;
6. "Untaxed tobacco products" means packages of tobacco products upon which taxes required by state law have not been paid;
7. "Contraband tobacco products" means untaxed tobacco products for which taxes are required to be paid pursuant to the provisions of Sections 9 through 12 of this act or Section 401 et seq. of Title 68 of the Oklahoma Statutes and which are in the possession, custody or control of any person, for the purpose of being consumed, sold, offered for sale or consumption or transported to any person in this state other than a wholesaler licensed under Section 415 of Title 68 of the Oklahoma Statutes; provided, contraband tobacco products shall not include untaxed tobacco products sold to veterans' hospitals, to state-operated domiciliary homes for veterans or to the United States for sale or distribution by said entities in accordance with Sections 419 through 421 of Title 68 of the Oklahoma Statutes;
8. "Taxed tobacco products" means packages of tobacco products upon which taxes required by law have been paid;
9. "Commission" means the Oklahoma Tax Commission; and
10. "Person" shall include any individual, company, partnership, joint venture, joint agreement, association (mutual or otherwise), corporation, trust, estate, business trust receiver or trustee appointed by any state or federal court, syndicates or any combination acting as a unit, in the plural or singular number.
Added by Laws 1992, c. 339, § 9, eff. Jan. 1, 1993.
§68-426. Levy of tax - Tax refunds - Shipping, transporting, receiving, possessing, selling, distributing or purchasing contraband tobacco products.
A. There is hereby levied upon the sale of tobacco products at a tribally owned or licensed store a tax in the amount of seventy-five percent (75%) of the tobacco products excise taxes imposed by Section 401 et seq. of Title 68 of the Oklahoma Statutes, which tax shall be in lieu of all sales and excise taxes on said tobacco products.
B. A federally recognized Indian tribe or nation may receive a refund for a portion of the tax imposed pursuant to the provisions of this section if it can provide sufficient documentation that sales of tobacco products to its tribal members exceed twenty-five percent (25%) of its total sales of tobacco products. The amount of the refund shall be the amount of tax paid which is attributable to sales of tobacco products made to tribal members which is in excess of twenty-five percent (25%) of the tribe's or nation's total sales of tobacco products. Refunds shall be paid quarterly. The Tax Commission shall promulgate rules and regulations to administer the provisions of this subsection.
C. It shall be unlawful for any person knowingly to ship, transport, receive, possess, sell, distribute or purchase contraband tobacco products. Any person who engages in shipping, transporting, receiving, possessing, selling, distributing or purchasing contraband tobacco products shall, upon conviction, be guilty of a misdemeanor punishable by a fine of not more than One Thousand Dollars ($1,000.00). Any person convicted of a second or subsequent violation hereof shall be guilty of a felony and shall be punishable by a fine of not more than Five Thousand Dollars ($5,000.00), by a term of imprisonment in the State Penitentiary for not more than two (2) years, or by both such fine and imprisonment.
D. Any person who knowingly engages in shipping, transporting, receiving, possessing, selling, distributing or purchasing contraband tobacco products shall be subject to the forfeiture of property as is provided by Section 417 of Title 68 of the Oklahoma Statutes and assessment of penalty as provided thereby and assessment for any delinquent taxes found to be owing.
Added by Laws 1992, c. 339, § 10, eff. Jan. 1, 1993. Amended by Laws 1997, c. 133, § 558, eff. July 1, 1999; Laws 1999, 1st Ex.Sess., c. 5, § 407, eff. July 1, 1999.
NOTE: Laws 1998, 1st Ex.Sess., c. 2, § 23 amended the effective date of Laws 1997, c. 133, § 558 from July 1, 1998, to July 1, 1999.
§68-427. Persons who may sell tobacco products to tribally owned or licensed stores - Collecting, reporting and remitting tax.
Every wholesaler, jobber or warehouseman doing business within this state and required to secure a license as provided in Section 415 of Title 68 of the Oklahoma Statutes may sell tobacco products to tribally owned or licensed stores in this state. It shall be the duty of the wholesaler, jobber or warehouseman to collect, report and remit the tax imposed by Section 10 of this act on the tobacco products inventory sold to a tribally owned or licensed store.
Added by Laws 1992, c. 339, § 11, eff. Jan. 1, 1993.
§68-427.1. Tobacco products not purchased for sale at tribally owned or licensed store - Liability for additional tax due or required to be collected.
If a wholesaler, jobber or warehouseman timely accepts documentation as prescribed by the Oklahoma Tax Commission from a person claiming that the tobacco products will be sold at a tribally owned or licensed store, the wholesaler, jobber or warehouseman shall be relieved of any liability for any additional tax due or required to be collected should it later be determined that the tobacco products were not purchased for sale at a tribally owned or licensed store.
Added by Laws 1993, c. 146, § 14.
§68-427.2. Violation of § 350.1 or § 427.1.
Any person determined to have violated the provisions of Section 13 or 14 of this act shall have their license suspended for a period of six (6) months and a subsequent violation by said person shall be grounds to permanently cancel the license.
Added by Laws 1993, c. 146, § 15.
§68-428. Seizure and forfeiture of untaxed tobacco products - Authority of peace officers - Cooperation with Tax Commission.
A. All untaxed tobacco products sold or shipped to tribally owned or licensed stores in this state by wholesalers, jobbers or warehousemen not licensed by this state pursuant to the provisions of Section 415 of Title 68 of the Oklahoma Statutes for the purpose of selling or consuming untaxed tobacco products in this state in violation of this act shall be subject to seizure of the shipments and forfeiture of the inventory pursuant to the provisions of Section 417 of Title 68 of the Oklahoma Statutes.
B. Any peace officer of this state, including but not limited to officers of the Department of Public Safety or the Oklahoma State Bureau of Investigation, any sheriff, any salaried deputy sheriff or any municipal police officer is authorized to stop any vehicle upon any road or highway of this state in order to inspect the bill of lading or to take such action as may be necessary to determine if untaxed tobacco products are being sold or shipped in violation of the provisions of this section. Such officers shall also have the duty to cooperate with the Oklahoma Tax Commission to enforce the provisions of this act.
Added by Laws 1992, c. 339, § 12, eff. Jan. 1, 1993.
§68-429. Disposition of revenues.
A. Any revenue from a payment in lieu of excise taxes on tobacco products pursuant to a compact entered into by the State of Oklahoma and a federally recognized Indian tribe or nation pursuant to the provisions of subsection C of Section 1 of this act shall be deposited to the General Revenue Fund.
B. Any revenue from payment of the tax imposed by Section 10 of this act shall be deposited to the General Revenue Fund.
Added by Laws 1992, c. 339, § 13, eff. Jan. 1, 1993.
§68-450.1. Definitions.
As used in Sections 1 through 9 of this act:
1. "Controlled dangerous substance" means a drug, substance, or immediate precursor specified in Schedules I through V of the Uniform Controlled Dangerous Substances Act which is held, possessed, transported, transferred, sold or offered to be sold in violation of the laws of this state;
2. "Dealer" means a person who in violation of the Uniform Controlled Dangerous Substances Act manufactures, distributes, produces, ships, transports, or imports into Oklahoma or in any manner acquires or possesses more than fortytwo and onehalf (42 1/2) grams of marihuana, or seven or more grams of any controlled dangerous substance other than marihuana, or ten or more dosage units of any controlled dangerous substance other than marihuana which is not sold by weight. A quantity of a controlled dangerous substance is measured by the weight of the substance whether pure, impure or dilute, or by dosage units when the controlled dangerous substance is not sold by weight, in the possession of the dealer. A quantity of a controlled dangerous substance is dilute if it consists of a detectable quantity of pure controlled dangerous substance and any excipients or fillers; and
3. "Commission" means the Oklahoma Tax Commission.
Added by Laws 1990, c. 25, § 1, operative July 1, 1990.
§68-450.2. Levy of tax - Calculation.
There shall be levied, assessed, collected, and paid in respect to controlled dangerous substances, a tax in the following amounts:
1. On each gram of marihuana, or each portion of a gram, Three Dollars and fifty cents ($3.50); and
2. On each gram or portion of a gram of a controlled dangerous substance, other than marihuana, Two Hundred Dollars ($200.00); or
3. On each fifty (50) dosage units or portion thereof, of a controlled dangerous substance, that is not sold by weight, other than marihuana, One Thousand Dollars ($1,000.00).
For the purpose of calculating the tax pursuant to this section, a quantity of marihuana or other controlled dangerous substance is measured by the weight of the substance whether pure, impure or dilute, or by dosage units when the substance is not sold by weight, in the possession of the dealer. A quantity of a controlled dangerous substance is dilute if it consists of a detectable quantity of pure controlled dangerous substance and any excipients or fillers.
Added by Laws 1990, c. 25, § 2, operative July 1, 1990.
§68-450.3. Manner of payment of tax - Intent and purpose of act.
A. The tax levied by Section 2 of this act shall be paid by affixing stamps in the manner and at the time herein set forth.
When a dealer purchases, acquires, transports, or imports into this state a controlled dangerous substance on which a tax is levied by Section 2 of this act, the dealer shall have the stamp affixed on the controlled dangerous substance immediately after receiving the controlled dangerous substance. Each stamp may be used only once.
Taxes imposed upon controlled dangerous substances by Section 2 of this act are due and payable immediately upon acquisition or possession of a controlled dangerous substance in this state by a dealer.
B. It is the intent and purpose of this act that no dealer shall possess any controlled dangerous substance upon which a tax is imposed by Section 2 of this act unless the tax has been paid on the controlled dangerous substance as evidenced by a stamp issued by the Commission.
Added by Laws 1990, c. 25, § 3, operative July 1, 1990.
§68-450.4. Rules and regulations - Purchase of stamps - Reporting forms - Use of stamps in administrative, civil and criminal proceedings.
A. The Commission shall promulgate rules and regulations for a uniform system of providing, affixing, and displaying official stamps for any controlled dangerous substance on which the tax levied in Section 2 of this act is imposed.
B. The official stamps to be affixed to all controlled dangerous substances shall be purchased from the Commission. The dealer purchasing said stamps shall pay in cash one hundred percent (100%) of face value for each stamp at the time of purchase. The Commission shall make the stamps in denominations of Ten Dollars ($10.00).
C. The Commission shall provide reporting forms for the reporting and payment of the taxes levied by Section 2 of this act. Dealers are not required to give their name, address, social security number, or other identifying information on the forms. Neither the Commission nor any public employee may reveal facts contained in a report required by this section, nor can any information contained in such a report be used against the dealer in any criminal proceeding, unless independently obtained, except in connection with a proceeding involving taxes due pursuant to this act from the dealer making the report.
D. A stamp denoting payment of the tax levied by Section 2 of this act shall not be used against the taxpayer in a criminal proceeding, except that the stamp may be used against the taxpayer in connection with the administration or civil or criminal enforcement of the tax levied by Section 2 of this act.
Added by Laws 1990, c. 25, § 4, operative July 1, 1990.
§68-450.5. Immediate assessment and collection of tax - Delinquency - Penalties.
A. The taxable period of the tax levied by Section 2 of this act for any dealer not possessing valid stamps showing that the tax has been paid shall be declared terminated by the Commission as provided in paragraph 4 of subsection a of Section 224 of this title. The Commission shall immediately assess the tax and applicable penalties from any information in its possession, notify the taxpayer, and demand immediate payment thereof. In the event of any failure or refusal to pay the tax and penalties immediately by the taxpayer, the tax shall become delinquent and the Commission shall proceed to collect such tax and penalties in the manner prescribed by law.
B. No person may bring an action to enjoin the assessment or collection of any taxes, interest or penalties imposed by the provisions of this act.
C. The tax and penalties assessed by the Commission pursuant to the provisions of this act are presumed to be valid and correctly determined and assessed. The burden is upon the taxpayer to show their incorrectness or invalidity.
Added by Laws 1990, c. 25, § 5, operative July 1, 1990.
§68-450.6. Exemptions from tax.
Nothing in this act requires any person, including but not limited to pharmacists or doctors licensed by this state, lawfully in possession of a controlled dangerous substance, to pay the tax levied by Section 2 of this act.
Added by Laws 1990, c. 25, § 6, operative July 1, 1990.
§68-450.7. Disposition of revenues.
The revenue, including interest and penalties, collected pursuant to this act shall be paid monthly by the Commission to the State Treasurer to be placed in the Drug Abuse Education Revolving Fund created in Section 2-417 of Title 63 of the Oklahoma Statutes. The monies shall be budgeted and expended by the State Board of Education for drug abuse education programs.
Added by Laws 1990, c. 25, § 7, operative July 1, 1990.
§68-450.8. Civil and criminal penalties - Immunities.
A. Any dealer violating the provisions of this act, except Section 450.9 of this title, shall pay a civil penalty of one hundred percent (100%) of the amount of the tax levied in Section 450.2 of this title in addition to the actual tax levied in said section.
B. Any dealer manufacturing, distributing, producing, shipping, transporting, importing or possessing any controlled dangerous substance without affixing the appropriate stamp, upon conviction, is guilty of a felony punishable by imprisonment in the State Penitentiary for not more than five (5) years or by the imposition of a fine of not more than Ten Thousand Dollars ($10,000.00), or by both such imprisonment and fine.
C. Nothing in this act may in any manner provide immunity for a dealer from criminal prosecution pursuant to Oklahoma law.
Added by Laws 1990, c. 25, § 8, operative July 1, 1990. Amended by Laws 1997, c. 133, § 559, eff. July 1, 1999; Laws 1999, 1st Ex.Sess., c. 5, § 408, eff. July 1, 1999.
NOTE: Laws 1998, 1st Ex.Sess., c. 2, § 23 amended the effective date of Laws 1997, c. 133, § 559 from July 1, 1998, to July 1, 1999.
§68-450.9. Reuse of used stamp prohibited - Penalty.
A. No person shall willfully remove or otherwise prepare any adhesive stamps, with intent to use, or cause the same to be used, after it has already been used or knowingly or willfully buy, sell, offer for sale, or give away, any such washed or restored stamp to any person, or knowingly use the same, or have in his possession any washed, restored, or altered stamp which has been removed from the controlled dangerous substance to which it had been previously affixed.
B. No person shall for the purpose of indicating the payment of any tax levied by Section 450.2 of this title, reuse any stamp which has heretofore been used for the purpose of paying any tax levied by Section 450.2 of this title, or buy, sell, offer for sale, or have in his possession, any counterfeit stamps.
C. Any person convicted of violating any provision of this section shall be guilty of a felony and shall be punished by a fine of not more than One Thousand Dollars ($1,000.00), or by imprisonment for not more than five (5) years, or by both such fine and imprisonment.
Added by Laws 1990, c. 25, § 9, operative July 1, 1990. Amended by Laws 1997, c. 133, § 560, eff. July 1, 1999; Laws 1999, 1st Ex.Sess., c. 5, § 409, eff. July 1, 1999.
NOTE: Laws 1998, 1st Ex.Sess., c. 2, § 23 amended the effective date of Laws 1997, c. 133, § 560 from July 1, 1998, to July 1, 1999.
§68451. Capital Improvement Fund.
There is hereby created in the State Treasury a special fund to be designated the "Oklahoma Capital Improvement Fund". Said fund shall consist of amounts deposited therein pursuant to Section 5(d) of this act, and monies, if any, which have accrued to the State General Revenue Fund at the close of the fiscal year ending June 30, 1979, which were in excess of Five Million Dollars ($5,000,000.00) that year, in excess of the amounts required to satisfy all appropriations made from the State General Revenue Fund for the then current fiscal year together with all other statutory obligations. Provided, the amount apportioned to the Oklahoma Capital Improvement Fund by the Director of State Finance from the fiscal year ending June 30, 1979, shall not exceed the sum of Thirty Million Dollars ($30,000,000.00).
Laws 1979, c. 195, § 7, emerg. eff. May 24, 1979.
§68452. Expenditure of funds.
Revenues dedicated, apportioned, deposited and accruing to the credit of the Oklahoma Capital Improvement Fund created by this act shall be expended only pursuant to legislative appropriation for capital improvement projects.
Laws 1979, c. 195, § 8, emerg. eff. May 24, 1979.
§68-500.1. Short title.
Sections 1 through 63 of this act shall be known and may be cited as the "Motor Fuel Tax Code".
Added by Laws 1996, c. 345, § 1, eff. Oct. 1, 1996.
§68-500.2. Legislative intent and purpose.
A. It is the intent of this act to amend, revise, incorporate and recodify established revenue raising procedures applied to motor fuels for the construction and maintenance of safe public highways and bridges in this state. It is the intent of the Legislature that the taxes imposed on motor fuel have always been and continue to be declared and conclusively presumed to be a direct tax on the ultimate or retail consumer. When the taxes are paid by any person other than the ultimate or retail consumer, the payment shall be considered as precollected and as an advance payment for the purpose of convenience and facility to the consumer and shall thereafter be added to the price of the motor fuel and recovered from the ultimate or retail consumer, regardless of where or how the taxable fuel is ultimately consumed.
B. In order to promote and protect the public safety, health and welfare of this state, it is also the intent of this act to establish a modern, efficient and effective motor fuel tax collection and enforcement system adequate to substantially deter motor fuel tax evasion emanating from sources within and outside this state. In order to achieve the purpose and intent of this act, the Legislature finds it necessary to increase conformity with federal law concerning the imposition of tax on motor fuels and increased reliance on highway enforcement systems. This act is intended to conform the method in this state of imposing an excise tax on motor fuel with the method imposed in the Internal Revenue Code and the regulations issued pursuant thereto.
C. It is also the intent of the Legislature that the recodification of the tax levied by this act shall not be considered and construed to be a new tax or change in the motor fuel tax, but a clarification of the motor fuel tax as it existed prior to the effective date of this act. The purpose of this recodification is a result of the interpretation of the motor fuel tax code of this state by the federal courts, specifically the decision by the Supreme Court of the United States in "Oklahoma Tax Commission v. Chickasaw Nation", 115 S. Ct. 2214 (1995).
Added by Laws 1996, c. 345, § 2, eff. Oct. 1, 1996.
§68-500.3. Definitions.
As used in this act:
1. "Act" or "this act" means the Motor Fuel Tax Code;
2. "Agricultural purposes" means clearing, terracing or otherwise preparing the ground on a farm; preparing soil for planting and fertilizing, cultivating, raising and harvesting crops; raising and feeding livestock and poultry; building fences; pumping water for any and all uses on the farm, including irrigation; building roads upon any farm by the owner or person farming same; operating milking machines; sawing wood for use on a farm; producing electricity for use on a farm; movement of tractors, farm implements and equipment from one field to another and use of farm tractors to move farm products from farm to market;
3. "Blend stock" means any petroleum product component of gasoline, such as naphtha, reformate, or toluene, that can be blended for use in a motor fuel without further processing. However, the term does not include any substance that:
a. will be ultimately used for consumer nonmotor-fuel use, and
b. is sold or removed in drum quantities (55 gallons) or less at the time of the removal or sale;
4. "Blended fuel" means a mixture composed of gasoline or diesel fuel and another liquid, other than a de minimis amount of a product such as carburetor detergent or oxidation inhibitor, that can be used as a fuel in a highway vehicle. This term includes gasohol, ethanol and fuel grade ethanol;
5. "Blender" means any person that produces blended motor fuel outside the bulk transfer/terminal system;
6. "Blending" means the mixing of one or more petroleum products, with or without another product, regardless of the original character of the product blended, if the product obtained by the blending is capable of use or otherwise sold for use in the generation of power for the propulsion of a motor vehicle, an airplane, or a motorboat. The term does not include that blending that occurs in the process of refining by the original refiner of crude petroleum or the blending or products known as lubricating oil and greases;
7. "Bulk end user" means a person who receives into the person's own storage facilities in transport truck lots of motor fuel for the person's own consumption;
8. "Bulk plant" means a motor fuel storage and distribution facility that is not a terminal and from which motor fuel may be removed at a rack;
9. "Bulk transfer" means any transfer of motor fuel from one location to another by pipeline tender or marine delivery within the bulk transfer/terminal system;
10. "Bulk transfer/terminal system" means the motor fuel distribution system consisting of refineries, pipelines, vessels, and terminals. Gasoline in a refinery, pipeline, vessel, or terminal is in the bulk transfer/terminal system. Motor fuel in the fuel supply tank of any engine, or in any tank car, rail car, trailer, truck, or other equipment suitable for ground transportation is not in the bulk transfer/terminal system;
11. "Tax Commission" or "Commission" means the Oklahoma Tax Commission;
12. "Consumer" means the user of the motor fuel on the public highways of this state;
13. "Dead storage" means the amount of motor fuel that will not be pumped out of a storage tank because the motor fuel is below the mouth of the draw pipe. For purposes of this act, a dealer may assume that the amount of motor fuel in dead storage is two hundred (200) gallons for a tank with a capacity of less than ten thousand (10,000) gallons and four hundred (400) gallons for a tank with a capacity of ten thousand (10,000) gallons or more;
14. "Delivery" means the placing of motor fuel or any liquid into the fuel tank of a motor vehicle;
15. "Destination state" means the state, territory, or foreign country to which motor fuel is directed for delivery into a storage facility, a receptacle, a container, or a type of transportation equipment for the purpose of resale or use;
16. "Diesel fuel" means any liquid that is commonly or commercially known or sold as a fuel that is suitable for use in a diesel-powered highway vehicle. A liquid meets this requirement if, without further processing or blending, the liquid has practical and commercial fitness for use in the propulsion engine of a diesel-powered highway vehicle. Except as provided in subsection B of Section 4 of this act, "diesel fuel" does not include jet fuel sold to a buyer who is registered with and certified by the Internal Revenue Service to purchase jet fuel subject to the Internal Revenue Service;
17. "Diesel-powered highway vehicle" means a motor vehicle operated on a highway that is propelled by a diesel-powered engine;
18. "Distributor" means a person who acquires motor fuel from a supplier or from another distributor for subsequent sale or use;
19. "Dyed diesel fuel" means diesel fuel that is required to be dyed pursuant to United States Environmental Protection Agency rules or is dyed pursuant to Internal Revenue Service rules or pursuant to any other requirements subsequently set by the United States Environmental Protection Agency or Internal Revenue Service including any invisible marker requirements;
20. "Eligible purchaser" means a person who has been authorized by the Commission pursuant to Section 23 of this act to make the election pursuant to Section 22 of this act;
21. "Enterer" includes any person who is the importer of record, pursuant to federal customs law, with respect to motor fuel. If the importer of record is acting as an agent, the person for whom the agent is acting is the enterer. If there is no importer of record of motor fuel entered into this state, the owner of the motor fuel at the time it is brought into this state is the enterer;
22. "Entry" means the importing of motor fuel into this state. Motor fuel brought into this state in the fuel tank of a motor vehicle shall not be deemed to be an "entry" if not removed from the fuel tank except as used for the propulsion of that motor vehicle, except to the extent that motor fuel was acquired tax free for export or a refund of tax was claimed as a result of exportation from the state from which that motor fuel was transported into this state;
23. "Export" means to obtain motor fuel in this state for sale or other distribution in another state. In applying this definition, motor fuel delivered out of state by or for the seller constitutes an export by the seller and motor fuel delivered out of state by or for the purchaser constitutes an export by the purchaser;
24. "Exporter" means any person, other than a supplier, who purchases motor fuel in this state for the purpose of transporting or delivering the fuel to another state or country;
25. "Farm tractor" means all tractor-type, motorized farm implements and equipment but shall not include motor vehicles of the truck-type, pickup truck-type, automobiles, and other motor vehicles required to be registered and licensed each year pursuant to the provisions of the motor vehicle license and registration laws of this state;
26. "Fuel transportation vehicle" means any vehicle designed for highway use which is also designed or used to transport motor fuels and includes transport trucks and tank wagons;
27. "Gasoline" means all products commonly or commercially known or sold as gasoline that are suitable for use as a motor fuel. Gasoline does not include products that have an American Society for Testing Materials ("A.S.T.M.") octane number of less than seventy-five (75) as determined by the "motor method". Except as provided in subsection B of Section 4 of this act, "gasoline" does not include aviation gasoline provided that the buyer is registered to purchase aviation gasoline free of tax and the seller obtains certification of such fact satisfactory to the Commission prior to making the sale;
28. "Gasoline blend stocks" includes any petroleum product component of gasoline, such as naphtha, reformate, or toluene, that can be blended for use in a motor fuel. The term shall not include any substance that will be ultimately used for consumer nonmotor-fuel use and is sold or removed in drum quantities of 55 gallons or less at the time of the removal or sale;
29. "Gross gallons" means the total measured motor fuel, exclusive of any temperature or pressure adjustments, in U.S. gallons;
30. "Heating oil" means a motor fuel that is burned in a boiler, furnace, or stove for heating or industrial processing purposes;
31. "Highway vehicle" means a self-propelled vehicle that is designed for use on a highway;
32. "Import" means to bring motor fuel into this state by any means of conveyance other than in the fuel supply tank of a motor vehicle. In applying this definition, motor fuel delivered into this state from out of state by or for the seller constitutes an import by the seller, and motor fuel delivered into this state from out of state by or for the purchaser constitutes an import by the purchaser;
33. "Import verification number" means the number assigned by the Commission with respect to a single transport truck delivery into this state from another state upon request for an assigned number by an importer or the transporter carrying motor fuel into this state for the account of an importer;
34. "In this state" means the area within the border of this state, including all land within the borders of this state owned by the United States of America;
35. "Indian country" means:
a. land held in trust by the United States of America for the benefit of a federally recognized Indian tribe or nation,
b. all land within the limits of any Indian reservation under the jurisdiction of the United States Government, notwithstanding the issuance of any patent, and including rights-of-way running through the reservation,
c. all dependent Indian communities within the borders of the United States whether within the original or subsequently acquired territory thereof, and whether within or without the limits of a state, and
d. all Indian allotments, the Indian titles to which have not been extinguished, including individual allotments held in trust by the United States or allotments owned in fee by individual Indians subject to federal law restrictions regarding disposition of said allotments and including rights-of-way running through the same.
The term shall also include the definition of Indian country as found in 18 U.S.C., Section 1151;
36. "Indian tribe", "tribes", or "federally recognized Indian tribe or nation" means an Indian tribal entity which is recognized by the United States Bureau of Indian Affairs as having a special relationship with the United States. The term shall also include the definition of a tribe as defined in 25 U.S.C., Section 479a;
37. "Invoiced gallons" means the gallons actually billed on an invoice in payment to a supplier;
38. "K-1 kerosene" means a petroleum product having an A.P.I. gravity of not less than forty degrees (40°), at a temperature of sixty degrees (60°) Fahrenheit and a minimum flash point of one hundred degrees (100°) Fahrenheit with a sulphur content not exceeding five one-hundredths percent (0.05%) by weight;
39. "Liquid" means any substance that is liquid in excess of sixty degrees (60°) Fahrenheit and a pressure of fourteen and seven-tenths (14.7) pounds per square inch absolute;
40. "Motor fuel" means gasoline, diesel fuel and blended fuel;
41. "Motor fuel transporter" means a person who transports motor fuel outside the bulk terminal/transfer system by transport truck or railroad tank car;
42. "Motor vehicle" means every automobile, truck, truck-tractor or any motor bus or self-propelled vehicle not operated or driven upon fixed rails or tracks. The term does not include:
a. farm tractors or machinery including tractors and machinery designed for off-road use but capable of movement on roads at low speeds,
b. a vehicle operated on rails, or
c. machinery designed principally for off-road use;
43. "Net gallons" means the motor fuel, measured in U.S. gallons, when corrected to a temperature of sixty degrees (60°) Fahrenheit (13° Celsius) and a pressure of fourteen and seven-tenths (14.7) pounds per square inch (psi);
44. "Permissive supplier" means an out-of-state supplier that elects, but is not required, to have a supplier's license pursuant to this act;
45. "Person" means natural persons, individuals, partnerships, firms, associations, corporations, estates, trustees, business trusts, syndicates, this state, any county, city, municipality, school district or other political subdivision of the state, federally recognized Indian tribe, or any corporation or combination acting as a unit or any receiver appointed by any state or federal court;
46. "Position holder" means the person who holds the inventory position in motor fuel in a terminal, as reflected on the records of the terminal operator. A person holds the inventory position in motor fuel when that person has a contract with the terminal operator for the use of storage facilities and terminaling services for fuel at the terminal. The term includes a terminal operator who owns fuel in the terminal;
47. "Public highway" means every road, toll road, highway, street, way or place generally open to the use of the public as a matter of right for the purposes of vehicular travel, including streets and alleys of any town or city notwithstanding that the same may be temporarily closed for construction, reconstruction, maintenance or repair;
48. "Qualified terminal" means a terminal designated as a qualified terminal pursuant to the Internal Revenue Code, regulation and practices and which has been assigned a terminal control number ("tcn") by the Internal Revenue Service;
49. "Rack" means a mechanism for delivering motor fuel from a refinery, a terminal, or a bulk plant into a railroad tank car, a transport truck or other means of bulk transfer outside of the bulk transfer/terminal system;
50. "Refiner" means any person that owns, operates, or otherwise controls a refinery within the United States;
51. "Refinery" means a facility used to produce motor fuel from crude oil, unfinished oils, natural gas liquids, or other hydrocarbons and from which motor fuel may be removed by pipeline, by vessel, or at a rack;
52. "Removal" means any physical transfer other than by evaporation, loss, or destruction of motor fuel from a terminal, manufacturing plant, customs custody, pipeline, marine vessel such as a barge or tanker, refinery or any receptacle that stores motor fuel;
53. "Retailer" means a person that engages in the business of selling or distributing to the consumer within this state;
54. "Supplier" means a person that is:
a. registered pursuant to Section 4101 of the Internal Revenue Code for transactions in motor fuels in the bulk transfer/terminal distribution system, and
b. one of the following:
(1) the position holder in a terminal or refinery in this state,
(2) imports motor fuel into this state from a foreign country,
(3) acquires motor fuel from a terminal or refinery in this state from a position holder pursuant to a two-party exchange, or
(4) the position holder in a terminal or refinery outside this state with respect to motor fuel which that person imports into this state on the account of that person.
A terminal operator shall not be considered a supplier based solely on the fact that the terminal operator handles motor fuel consigned to it within a terminal. "Supplier" also means a person that produces alcohol or alcohol derivative substances in this state, produces alcohol or alcohol derivative substances for import to this state into a terminal, or acquires upon import by truck, railcar or barge into a terminal or refinery, alcohol or alcohol derivative substances. "Supplier" includes a permissive supplier unless specifically provided otherwise;
55. "Tank wagon" means a straight truck having multiple compartments designed or used to carry motor fuel;
56. "Terminal" means a storage and distribution facility for motor fuel, supplied by pipeline or marine vessel which is registered as a qualified terminal by the Internal Revenue Service and from which motor fuel may be removed at a rack;
57. "Terminal bulk transfers" include but are not limited to the following:
a. a marine barge movement of fuel from a refinery or terminal to a terminal,
b. pipeline movements of fuel from a refinery or terminal to a terminal,
c. book transfers of product within a terminal between suppliers prior to completion of removal across the rack, and
d. two-party exchanges between licensed suppliers;
58. "Terminal operator" means any person that owns, operates, or otherwise controls a terminal, and does not use a substantial portion of the motor fuel that is transferred through or stored in the terminal for its own use or consumption or in the manufacture of products other than motor fuel. A terminal operator may own the motor fuel that is transferred through or stored in the terminal;
59. "Throughputter" means any person that:
a. receives transfer of motor fuel from refiners, importers, terminal operators, or other throughputters,
b. stores the motor fuel in a terminal, and
c. owns the motor fuel or holds the inventory position to the motor fuel, as reflected on the records of the terminal operator, at the time of removal or sale from a terminal;
60. "Transmix" means the buffer or interface between two different products in a pipeline shipment, or a mix of two different products within a refinery or terminal that results in an off-grade mixture;
61. "Transport truck" means a semitrailer combination rig designed or used for the purpose of transporting motor fuel over the highways;
62. "Transporter" means any operator of a pipeline, barge, railroad or transport truck engaged in the business of transporting motor fuels;
63. "Two-party exchange" means a transaction in which the motor fuel is transferred from one licensed supplier or licensed permissive supplier to another licensed supplier or licensed permissive supplier and:
a. which transaction includes a transfer from the person that holds the original inventory position for motor fuel in the terminal as reflected on the records of the terminal operator, and
b. the exchange transaction is simultaneous with removal from the terminal by the receiving exchange partner.
However, in any event, the terminal operator in the books and records of such terminal operator treats the receiving exchange party as the supplier which removes the product across a terminal rack for purposes of reporting such events to this state;
64. "Ultimate vendor" means a person that sells motor fuel to the consumer;
65. "Undyed diesel fuel" means diesel fuel that is not subject to the United States Environmental Projection Agency dyeing requirements, or has not been dyed in accordance with Internal Revenue Service fuel dyeing provisions;
66. "Vehicle fuel tank" means any receptacle on a motor vehicle from which fuel is supplied for the propulsion of the motor vehicle; and
67. "Wholesaler" means a person that acquires motor fuel from a supplier or from another wholesaler for subsequent sale and distribution at wholesale.
Added by Laws 1996, c. 345, § 3, eff. Oct. 1, 1996.
§68-500.4. Levy of tax.
A. A tax is imposed on all gasoline and all diesel fuel used or consumed in this state as follows:
1. Gasoline, sixteen cents ($0.16) per gallon; and
2. Diesel fuel, thirteen cents ($0.13) per gallon.
B. A tax is imposed on all gasoline, diesel fuel and kerosene used or consumed in this state for use as fuel to generate power in aircraft engines or for training, testing or research on aircraft engines in the amount of eight one-hundredths of one cent ($0.0008) per gallon. All gasoline, diesel fuel and kerosene sold for use under this subsection shall not be subject to the excise tax levied in subsection A of this section.
C. Notwithstanding any exemption provided in Section 500.1 et seq. of this title, all gasoline used or consumed in this state for use as fuel for farm tractors or stationary engines and used exclusively for agricultural purposes shall be subject to a tax in the amount of two and eight one-hundredths cents ($0.0208) per gallon. All gasoline sold for use pursuant to this subsection shall not be subject to the excise tax levied in subsection A of this section. The term "farm tractor", as used herein, shall include all tractor-type, motorized farm implements and equipment but shall not include motor vehicles of the truck-type, pickup truck-type, automobiles and other motor vehicles required to be registered and licensed each year under the Oklahoma Vehicle License and Registration Act.
D. It is the intent of this section to amend, revise, incorporate and recodify the tax imposed on motor fuel and that the tax shall be conclusively presumed to be a direct tax and shall be a direct tax on the retail or ultimate consumer precollected for the purpose of convenience and facility to the consumer. The levy and assessment on other persons as specified in this act shall be as agents of the state for the precollection of the tax. The provisions of this section shall in no way affect the method of collecting the tax as provided in this act. The tax imposed by this section shall be collected and paid at those times, in the manner, and by those persons specified in this act.
Added by Laws 1996, c. 345, § 4, eff. Oct. 1, 1996. Amended by Laws 2000, c. 314, § 7, eff. July 1, 2000.
§68-500.4A. Levy of tax equal to reduction in federal excise tax.
A. In the event that, by federal law, the federal excise tax imposed on gasoline or diesel fuel or both is reduced from the rate imposed on January 1, 1996, there shall be levied a tax equal to the reduction in the federal excise tax on gasoline or diesel fuel or both. The tax on gasoline or diesel fuel or both shall be imposed beginning the first day following the reduction in the rate of the federal excise tax on gasoline or diesel fuel or both. The tax imposed by this subsection resulting from a reduction in federal excise tax on gasoline or diesel fuel or both shall not include any reduction in federal excise tax imposed on diesel fuel for use in trains pursuant to the Internal Revenue Code, 26 U.S.C., Section 4041, in that the federal excise tax levy on diesel fuel for use in trains is not appropriated or apportioned to the Federal Highway Trust Fund.
B. The tax levied pursuant to subsection A of this section shall be in addition to and applicable to all gasoline and diesel fuel subject to the tax imposed and levied pursuant to Section 500.4 of Title 68 of the Oklahoma Statutes. It is the intent of this section that the tax shall be conclusively presumed to be a direct tax and shall be a direct tax on the retail or ultimate consumer precollected for the purpose of convenience and facility to the consumer. The levy and assessment on other persons as specified in the Motor Fuel Tax Code shall be as agents of the state for the precollection of the tax. The provisions of this section shall in no way affect the method of collecting the tax as provided in the Motor Fuel Tax Code. The tax imposed by this section shall be collected and paid at those times, in the manner, and by those persons specified in the Motor Fuel Tax Code.
Added by Laws 1997, c. 259, § 1, eff. Nov. 1, 1997.
§68-500.5. Presumptions.
A. Except as otherwise provided in paragraph 11 of Section 10 of this act, the Commission shall consider it a presumption that all motor fuel delivered in this state into a motor vehicle fuel supply tank is to be used or consumed on the highways in this state in producing or generating power for propelling motor vehicles.
B. The Commission shall consider it a rebuttable presumption, subject to proof of exemption under Section 10 of this act, that all motor fuel removed from a terminal in this state, or imported into this state other than by a bulk transfer within the bulk transfer/terminal system or delivered into a bulk end user's storage tank, is to be used or consumed on the highways in this state in producing or generating power for propelling motor vehicles.
Added by Laws 1996, c. 345, § 5, eff. Oct. 1, 1996.
§68-500.6. Apportionment of gasoline tax.
A. The tax of sixteen cents ($0.16) per gallon of gasoline that is levied by paragraph 1 of subsection A of Section 500.4 of this title, and the tax of two and eight one-hundredths cents ($0.0208) per gallon of gasoline that is levied by subsection C of Section 500.4 of this title, and penalties and interest thereon, collected by the Oklahoma Tax Commission under the levy shall be apportioned and distributed monthly as follows:
1. The first Two Hundred Fifty Thousand Dollars ($250,000.00) of the levy collected each month shall be deposited in the State Treasury to the credit of the State Transportation Fund;
2. One and six hundred twenty-five one-thousandths percent (1.625%) of the levy shall be remitted to the State Treasurer to the credit of the General Revenue Fund of the State Treasury;
3. Sixty-three and seventy-five one-hundredths percent (63.75%) of the levy shall be deposited in the State Treasury to the credit of the State Transportation Fund to be apportioned as follows:
a. the first Eight Hundred Fifty Thousand Dollars ($850,000.00) collected each fiscal year shall be deposited into the Public Transit Revolving Fund, created in Section 4031 of Title 69 of the Oklahoma Statutes,
b. the second Eight Hundred Fifty Thousand Dollars ($850,000.00) collected each fiscal year shall be deposited into the Oklahoma Tourism and Passenger Rail Revolving Fund and shall be used by the Department of Transportation:
(1) to contract railroad passenger services, including but not limited to a route linking stations in Oklahoma and Tulsa Counties with other primary points in the national railroad passenger system and passenger rail service within the state, and a route beginning at a station in Oklahoma County and extending north to the Kansas state line in Kay County, and
(2) to provide necessary facility, signaling, and track improvements for those contracted services,
c. forty-one and two-tenths percent (41.2%) of the monies apportioned to the State Transportation Fund shall be used for any purpose provided for in Section 1502 of Title 69 of the Oklahoma Statutes,
d. nine and eight-tenths percent (9.8%) of the monies apportioned to the State Transportation Fund shall be used to provide funds for the construction and maintenance of farm-to-market roads on the state highway system, and other rural farm-to-market roads and bridges, and
e. any remaining amount of the apportionment shall be deposited into the State Transportation Fund;
4. Twenty-seven percent (27%) of the levy shall be transmitted by the Tax Commission to the various counties of the state, to be apportioned and used as follows:
a. sixty-five and three-tenths percent (65.3%) of the monies apportioned under this paragraph shall be used on the following basis:
(1) forty percent (40%) of such sum shall be distributed to the various counties in the proportion which the county road mileage of each county bears to the entire state road mileage as certified by the Transportation Commission, and
(2) the remaining sixty percent (60%) of such sum shall be distributed to the various counties on the basis which the population and area of each county bears to the total population and area of the state. The population shall be as shown by the last Federal Decennial Census or the most recent annual estimate provided by the U.S. Bureau of the Census,
b. twenty-three and one-tenth percent (23.1%) of the monies apportioned under this paragraph shall be distributed to the counties in the following manner:
One-third (1/3) on area; one-third (1/3) on rural population, defined as including the population of all municipalities with a population of less than five thousand (5,000) according to the latest Federal Decennial Census; and one-third (1/3) on county road mileage, as last certified by the Department of Transportation, as each county bears to the entire area, rural population and road mileage of the state, and
c. eleven and six-tenths percent (11.6%) of the monies apportioned under this paragraph shall be distributed to the various counties of the state based on a formula developed by the Department of Transportation and approved by the Department of Transportation County Advisory Board created pursuant to Section 302.1 of Title 69 of the Oklahoma Statutes. The formula shall be similar to the formula currently used for the distribution of monies in the County Bridge Program funds, but shall also take into consideration the effect of the terrain and traffic volume as related to county road improvement and maintenance costs. Any county may, by resolution of the board of county commissioners, direct the Tax Commission to deposit the funds apportioned pursuant to this subparagraph directly into the County Bridge and Road Improvement Fund to be used for the purposes set forth in the County Bridge and Road Improvement Act;
5. Three and one hundred twenty-five one-thousandths percent (3.125%) of the levy shall be distributed to the various counties of the state based on a formula developed by the Department of Transportation and approved by the Department of Transportation County Advisory Board created pursuant to Section 302.1 of Title 69 of the Oklahoma Statutes. The formula shall be similar to the formula currently used for the distribution of monies in the County Bridge Program funds, but shall also take into consideration the effect of the terrain and traffic volume as related to county road improvement and maintenance costs. Any county may, by resolution approved by a majority of the board of county commissioners and filed with the Tax Commission, direct the Tax Commission to deposit the funds apportioned pursuant to this paragraph directly into the County Bridge and Road Improvement Fund to be used for the purposes set forth in the County Bridge and Road Improvement Act;
6. Two and six hundred twenty-five one-thousandths percent (2.625%) of the levy shall be deposited in the County Bridge and Road Improvement Fund of the State Treasury to be used for the purposes set forth in the County Bridge and Road Improvement Act; and
7. One and eight hundred seventy-five one-thousandths percent (1.875%) of the levy shall be transmitted by the Tax Commission to the treasurers of the various incorporated cities and towns of the state in the percentage which the population, as shown by the last Federal Decennial Census or the most recent annual estimate provided by the U.S. Bureau of the Census, bears to the total population of all the incorporated cities and towns in this state. The funds shall be expended for the construction, repair and maintenance of the streets and alleys of the incorporated cities and towns of this state.
Provided, for the fiscal year beginning July 1, 2002, the first Two Hundred Thousand Dollars ($200,000.00) of such revenues shall be apportioned to the Education Reform Revolving Fund.
B. 1. The funds apportioned or transmitted pursuant to subparagraphs a, b, and c of paragraph 4 of subsection A of this section, subsection B of Section 500.7 of this title, subsection B of Section 704 of this title, Section 706 of this title, and paragraph 2 of subsection D of Section 707.3 of this title shall be sent to the respective county treasurers and deposited in the county highway fund to be used by the county commissioners for the purpose of constructing and maintaining county highways and bridges.
2. The funds received by any county shall not be diverted to any other county of the state, and shall only be expended under the direction and control of the board of county commissioners in the county to which the funds are appropriated. If any part of the funds is diverted for any other purpose, the county commissioners shall be liable on their bond for double the amount of the money so diverted. This paragraph shall not prohibit counties from entering into cooperative agreements pertaining to the maintenance and construction of roads and bridges.
3. Where any county highway has been laid out over a road already constructed in any county by the use of money raised from county bond issues for that purpose, either alone or by the use of federal or state aid, or both, the county commissioners may set aside out of the funds apportioned to that county, as provided in this section, an amount of money equal to the value of any part thereof, of the interest of such county in such highway or bridge, which amount of money shall be considered by the excise board in reducing the levy for the purpose of retiring the bonded indebtedness and interest thereon of the county, and shall be used for investment or deposit in the same manner as provided by law for the disposition of other sinking fund money.
4. In all counties where the county excise board may find it necessary, because of insufficient revenue, to maintain county government out of the general fund, after a levy of ten (10) mills has been made for any fiscal year, the county excise board may appropriate out of any such funds apportioned to the county an amount sufficient to pay the salaries of the county commissioners of the county for the fiscal year.
5. Counties may use funds deposited in the county highway fund for the purpose of matching federal or state funds, provided such funds are available, as necessary to secure assistance in the construction or improvement of the county road system.
C. With regards to the apportionment of the levy as set forth in paragraph 5 of subsection A of this section, paragraph 5 of subsection A of Section 500.7 of this title, and subsection C of Section 707.2 of this title:
1. If any county has an accrued balance of funds which were appropriated to or otherwise accrued in a restricted road maintenance fund, such funds shall be deposited directly to the county highway fund of the county;
2. If any county has an accrued balance of funds which were appropriated to or otherwise accrued in the County Road Improvement Fund, or the County Bridge Improvement Fund, such funds shall, by resolution approved by a majority of the board of county commissioners and filed with the Department of Transportation, be deposited in the county highway fund of the county or shall be deposited to the County Bridge and Road Improvement Fund to be used for the purposes set forth in the County Bridge and Road Improvement Act; and
3. If any county has an advanced funding agreement with the Department of Transportation, the Department of Transportation shall notify the Tax Commission as to the amount the county is obligated to pay according to the terms of the advanced funding agreement. The obligated amount shall be transferred each month by the Tax Commission to the Department of Transportation to the credit of the County Bridge and Road Improvement Fund from the funds apportioned to the county pursuant to paragraph 5 of subsection A of this section. A county may elect to increase the monthly amount to be repaid pursuant to the advanced funding agreement from the funds apportioned to the county, but a county shall not be permitted to reduce the amount agreed to pursuant to the advanced funding agreement.
D. The tax levied on gasoline pursuant to Section 500.4A of this title, and the penalties and interest thereon, collected by the Tax Commission under the levy shall be apportioned and distributed on a monthly basis to the State Highway Construction and Maintenance Fund for the purposes authorized by Section 1502 of Title 69 of the Oklahoma Statutes.
Added by Laws 1996, c. 345, § 6, eff. Oct. 1, 1996. Amended by Laws 1997, c. 284, § 1, eff. July 1, 1997; Laws 1998, c. 5, § 20, emerg. eff. March 4, 1998; Laws 1998, c. 405, § 3, eff. Nov. 1, 1998; Laws 1999, c. 340, § 1, eff. July 1, 1999; Laws 2001, c. 267, § 1, eff. July 1, 2001; Laws 2002, c. 458, § 4, eff. July 1, 2002; Laws 2003, c. 472, § 8.
NOTE: Laws 1997, c. 259, § 2 repealed by Laws 1998, c. 5, § 29, emerg. eff. March 4, 1998.
§68-500.6a. Distribution of tax revenue.
All revenue from the tax of eight one-hundredths of one cent ($0.0008) per gallon imposed pursuant to the provisions of subsection B of Section 500.4 of Title 68 of the Oklahoma Statutes, and penalties and interest thereon, collected by the Oklahoma Tax Commission shall be apportioned and distributed monthly as follows:
1. For the fiscal year beginning July 1, 1999, one-third shall be paid to the State Treasurer and placed to the credit of the Oklahoma Aeronautics Commission Revolving Fund and two-thirds shall be apportioned pursuant to the provisions of Section 500.6 of Title 68 of the Oklahoma Statutes;
2. For the fiscal year beginning July 1, 2000, two-thirds shall be paid to the State Treasurer and placed to the credit of the Oklahoma Aeronautics Commission Revolving Fund and one-third shall be apportioned pursuant to the provisions of Section 500.6 of Title 68 of the Oklahoma Statutes; and
3. For the fiscal year beginning July 1, 2001, and for each fiscal year thereafter, all such revenue shall be paid to the State Treasurer and placed to the credit of the Oklahoma Aeronautics Commission Revolving Fund.
Added by Laws 1999, c. 283, § 4, eff. July 1, 1999.
§68-500.7. Apportionment of diesel fuel tax.
A. The tax of thirteen cents ($0.13) per gallon of diesel fuel that is levied by Section 500.4 of this title, and all penalties and interest thereon, collected by the Commission under the levy shall be apportioned and distributed monthly as follows:
1. The first Eighty-three Thousand Three Hundred Thirty-three Dollars and thirty-three cents ($83,333.33) of the levy collected each month shall be deposited in the State Treasury to the credit of the State Transportation Fund;
2. One and thirty-nine one-hundredths percent (1.39%) of the levy shall be paid by the Commission to the State Treasurer to the credit of the General Revenue Fund of the State Treasury;
3. Sixty-four and thirty-four one-hundredths percent (64.34%) of the levy shall be deposited in the State Treasury to the credit of the State Transportation Fund;
4. Twenty-six and fifty-eight one-hundredths percent (26.58%) of the levy shall be transmitted by the Commission to various counties of the state, to be apportioned as follows:
a. forty-two and one-tenth percent (42.1%) of the monies apportioned under this paragraph shall be transmitted to the various counties in the percentage which the population and area of each county bears to the population and area of the entire state. The population shall be as shown by the last Federal Decennial Census or the most recent annual estimate provided by the U.S. Bureau of the Census,
b. fourteen and five-tenths percent (14.5%) of the monies apportioned under this paragraph shall be distributed as follows:
Forty percent (40%) of such sum shall be distributed to the various counties in that proportion which the county road mileage of each county bears to the entire state road mileage as certified by the Transportation Commission, and the remaining sixty percent (60%) of such sum shall be distributed to the various counties on the basis which the population and area of each county bears to the total population and area of the state. The population shall be as shown by the last Federal Decennial Census or the most recent annual estimate provided by the U.S. Bureau of the Census,
c. twenty-eight and nine-tenths percent (28.9%) of the monies apportioned under this paragraph shall be distributed to the several counties in the following manner: one-third (1/3) on area, one-third (1/3) on rural population (defined as including the population of all municipalities with a population of less than five thousand (5,000) according to the latest Federal Decennial Census), and one-third (1/3) on county road mileage, as last certified by the Oklahoma Department of Transportation, as each county bears to the entire area, rural population and road mileage of the state, and
d. fourteen and five-tenths percent (14.5%) of the monies apportioned under this paragraph shall be distributed to the various counties of the state based on a formula developed by the Oklahoma Department of Transportation and approved by the Department of Transportation County Advisory Board created pursuant to Section 302.1 of Title 69 of the Oklahoma Statutes. The formula shall be similar to the formula currently used for the distribution of the County Bridge Program funds, but shall also take into consideration the effect of the terrain and traffic volume as related to the county road improvement and maintenance costs. Any county may, by resolution approved by a majority of the board of county commissioners and filed with the Oklahoma Tax Commission, direct the Oklahoma Tax Commission to deposit the funds so apportioned by this subparagraph directly into the County Bridge and Road Improvement Fund to be used for the purposes set forth in the County Bridge and Road Improvement Act;
5. Three and eighty-five one-hundredths percent (3.85%) of the levy shall be distributed based on a formula developed by the Oklahoma Department of Transportation and approved by the Department of Transportation County Advisory Board created pursuant to Section 302.1 of Title 69 of the Oklahoma Statutes. The formula shall be similar to the formula currently used for the distribution of the County Bridge Program funds, but shall also take into consideration the effect of the terrain and traffic volume as related to the county road improvement and maintenance costs. Any county may, by resolution approved by a majority of the board of county commissioners and filed with the Oklahoma Tax Commission, direct the Oklahoma Tax Commission to deposit the funds so apportioned by this paragraph directly into the County Bridge and Road Improvement Fund to be used for the purposes set forth in the County Bridge and Road Improvement Act. The apportionment of the levy as set forth in this paragraph shall be subject to the provisions of subsection C of Section 500.6 of this title; and
6. Three and eighty-four one-hundredths percent (3.84%) of the levy shall be deposited in the County Bridge and Road Improvement Fund of the State Treasury to be used for the purposes set forth in the County Bridge and Road Improvement Act.
B. The funds apportioned or transmitted pursuant to the provisions of subparagraphs a, b, and c of paragraph 4 of subsection A of this section shall be used in accordance with and subject to the provisions of subsection B of Section 500.6 of this title.
C. The tax levied on diesel fuel pursuant to Section 500.4A of this title, and all penalties and interest thereon, collected by the Commission under the levy shall be apportioned and distributed on a monthly basis to the State Highway Construction and Maintenance Fund for the purposes authorized by Section 1502 of Title 69 of the Oklahoma Statutes.
Added by Laws 1996, c. 345, § 7, eff. Oct. 1, 1996. Amended by Laws 1997, c. 284, § 2, eff. July 1, 1997; Laws 1998, c. 5, § 21, emerg. eff. March 4, 1998.
NOTE: Laws 1997, c. 259, § 3 repealed by Laws 1998, c. 5, § 29, emerg. eff. March 4, 1998.
§68-500.8. Measurement of tax on importer gallons and supplier gallons.
A. The tax imposed by this act on use of motor fuel which was imported into this state by a licensed importer, other than by a bulk transfer, shall arise at the time the product is entered into the state and shall be measured by invoiced gallons received outside this state at a refinery, terminal or at a bulk plant for delivery to a destination in this state.
B. Except as provided in subsection A of this section, the tax imposed by this act on use of motor fuel shall be measured by invoiced gallons of motor fuel removed, other than by a bulk transfer by a licensed supplier:
1. From the bulk transfer/terminal system or from a qualified terminal or refinery within this state;
2. From the bulk transfer/terminal system or from a qualified terminal or refinery outside this state for delivery to a location in this state as represented on the shipping papers, provided that the supplier imports the motor fuel for the account of the supplier, or the supplier has made a tax precollection election under Section 19 of this act; and
3. Upon sale in a qualified terminal or refinery in this state to an unlicensed supplier.
Added by Laws 1996, c. 345, § 8, eff. Oct. 1, 1996.
§68-500.9. Taxation of motor fuels held in inventory on date of increase in tax rate.
A. The tax imposed by Section 4 of this act on the date of an increase in the tax rate set out in Section 4 of this act shall be applicable to previously taxed motor fuel:
1. In excess of one thousand (1,000) gallons held in storage by a bulk end user or a consumer; and
2. Inventory held for sale by a fuel vendor.
B. Persons in possession of motor fuel subject to this section:
1. Shall take an inventory to determine the gallons in storage for purposes of determining the tax on inventory in determining the amount of motor fuel tax due under this section;
2. May deduct the amount of motor fuel in dead storage;
3. May deduct these gallons in which tax at the full rate has previously been paid;
4. May take a deduction for gallons of dyed diesel fuel; and
5. Report the gallons listed in paragraph 1 of this subsection on forms provided by the Commission.
C. The amount of the inventory tax is equal to the inventory tax rate times the gallons in storage as determined pursuant to the provisions of this section. The inventory tax rate is equal to the difference between the increased tax rate minus the previous tax rate to which those gallons were previously subjected to tax.
D. The inventory tax report required by this section shall be accompanied by payment of the inventory tax calculated in accordance with this section, and payment made on or before the due date of the report.
Added by Laws 1996, c. 345, § 9, eff. Oct. 1, 1996.
§68-500.10. Exemptions from motor fuels tax.
Subject to the procedural requirements and conditions set out in this section and Sections 500.11 through 500.17 of this title, the following are exempt from the tax imposed by Section 500.4 of this title on motor fuel:
1. Motor fuel for which proof of export is available in the form of a terminal-issued destination state shipping paper:
a. exported by a supplier who is licensed in the destination state, or
b. sold by a supplier to a licensed exporter for immediate export;
2. Motor fuel which was acquired by an unlicensed exporter and as to which the tax imposed by Section 500.4 of this title has previously been paid or accrued and was subsequently exported by transport truck by or on behalf of the licensed exporter in a diversion across state boundaries properly reported in conformity with Section 500.46 of this title;
3. Motor fuel exported out of a bulk plant in this state in a tank wagon if the destination of that vehicle does not exceed twenty-five (25) miles from the border of this state and as to which the tax imposed by Section 500.4 of this title has previously been paid or accrued, subject to gallonage limits and other conditions established by the Oklahoma Tax Commission;
4. K-1 kerosene sold at retail through dispensers which have been designed and constructed to prevent delivery directly from the dispenser into a vehicle fuel supply tank, and K-1 kerosene sold at retail through nonbarricaded dispensers in quantities of not more than twenty-one (21) gallons for use other than for highway purposes, under such rules as the Tax Commission shall reasonably require;
5. Motor fuel sold to the United States or any agency or instrumentality thereof;
6. Motor fuel used solely and exclusively in district-owned public school vehicles or FFA and 4-H Club trucks for the purpose of legally transporting public school children, and motor fuel purchased by any school district for use exclusively in school buses leased or hired for the purpose of legally transporting public school children, or in the operation of vehicles used in driver training;
7. Motor fuel used solely and exclusively as fuel to propel motor vehicles on the public roads and highways of this state, when leased or owned and being operated for the sole benefit of a county, city, town, a volunteer fire department with a state certification and rating, rural electric cooperatives, rural water and sewer districts, rural ambulance service districts, or federally recognized Indian tribes;
8. Motor fuel used as fuel for farm tractors or stationary engines owned or leased and operated by any person and used exclusively for agricultural purposes, except as to two and eight one-hundredths cents ($0.0208) per gallon of gasoline as provided in subsection C of Section 500.4 of this title;
9. Gasoline, diesel fuel and kerosene sold for use as fuel to generate power in aircraft engines, whether in aircraft or for training, testing or research purposes of aircraft engines, except as to eight one-hundredths of one cent ($0.0008) per gallon as provided in subsection B of Section 500.4 of this title;
10. Motor fuel sold within an Indian reservation or within Indian country by a federally recognized Indian tribe to a member of that tribe and used in motor vehicles owned by that member of the tribe. This exemption does not apply to sales within an Indian reservation or within Indian country by a federally recognized Indian tribe to non-Indian consumers or to Indian consumers who are not members of the tribe selling the motor fuel;
11. Subject to determination by the Tax Commission, that portion of diesel fuel:
a. used to operate equipment attached to a motor vehicle, if the diesel fuel was placed into the fuel supply tank of a motor vehicle that has a common fuel reservoir for travel on a highway and for the operation of equipment, or
b. consumed by the vehicle while the vehicle is parked off the highways of this state;
12. Motor fuel acquired by a consumer out of state and carried into this state, retained within and consumed from the same vehicle fuel supply tank within which it was imported;
13. Diesel fuel used as heating oil, or in railroad locomotives or any other motorized flanged-wheel rail equipment, or used for other nonhighway purposes other than as expressly exempted under another provision;
14. Motor fuel which was lost or destroyed as a direct result of a sudden and unexpected casualty;
15. Taxable diesel which had been accidentally contaminated by dye so as to be unsaleable as highway fuel as proved by proper documentation;
16. Dyed diesel fuel; and
17. Motor fuel sold to the Oklahoma Space Industry Development Authority or any spaceport user as defined in the Oklahoma Space Industry Development Act.
Added by Laws 1996, c. 345, § 10, eff. Oct. 1, 1996. Amended by Laws 1999, c. 164, § 38, eff. July 1, 1999.
§68-500.10-1. Ethanol credit - Refund claims process.
A. As used in this section:
1. "Ethanol" means a blend of gasoline and ethyl alcohol consisting of not more than fifteen percent (15%) ethyl alcohol by volume; and
2. "Retail dealer" means the type of dealer described by paragraph 53 of Section 500.3 of Title 68 of the Oklahoma Statutes.
B. Unless the federal government mandates the use of reformulated fuel in an area within the State of Oklahoma in nonattainment with the National Ambient Air Quality Standards, there shall be allowed as a credit against the tax levy imposed pursuant to paragraph 1 of subsection A of Section 500.4 of Title 68 of the Oklahoma Statutes in the amount of one and six-tenths cents ($0.016) for each gallon of ethyl alcohol which is contained in ethanol sold by a retail dealer.
C. Notwithstanding any other provision of the Oklahoma Motor Fuel Tax Code to the contrary, the retail dealer described by subsection A of this section may make the claim for refund from the Oklahoma Tax Commission. The refund claim process for the credit authorized by this section shall be substantially the same as the refund claims process authorized by the Motor Fuel Tax Code for other refunds provided by law.
D. Each claim for refund filed pursuant to this section shall be accompanied by such documentation as may be required by the Tax Commission that the retail dealer reduced the retail price for each gallon of ethyl alcohol which is contained in ethanol sold, and for which the credit authorized by this section is claimed, by one and six-tenths cents ($0.016) and that such cost savings was economically provided to the purchaser of the ethanol fuel.
Added by Laws 2005, c. 294, § 2, eff. Jan. 1, 2006.
§68-500.11. Perfecting exemption for exports.
The exemption for exports:
1. Under paragraph 1 of Section 10 of this act, shall be perfected by a deduction on the report of the supplier or licensed exporter which is otherwise responsible for the tax on removal of the product from a terminal or refinery in this state;
2. Under paragraph 3 of Section 10 of this act, shall be perfected by the exporter by a refund claim if the claim in the aggregate month to date exceeds One Thousand Dollars ($1,000.00) upon a refund application made to the Commission within three (3) years; or
3. Under paragraph 2 of Section 10 of this act, shall be perfected by the unlicensed exporter, if a diversion by an unlicensed exporter, upon a refund application made to the Commission within three (3) years.
Added by Laws 1996, c. 345, § 11, eff. Oct. 1, 1996.
§68-500.12. Regulations for exempt use of kerosene.
Exempt use of K-1 kerosene shall be governed by regulations promulgated by the Commission which shall follow regulations governing the exemption promulgated by the federal government to the extent that impositions of the conforming regulations would be practical and not be a hardship on sellers and consumers in this state.
Added by Laws 1996, c. 345, § 12, eff. Oct. 1, 1996.
§68-500.13. Procedures for tax exempt sales of motor fuel to governmental agencies.
The exemption for sales of motor fuel for use by the United States or any agency or instrumentality thereof, as provided in paragraph 5 of Section 500.10 of this title, district-owned public school vehicles and buses or FFA and 4-H Club trucks used for the purpose of legally transporting public school children and in the operation of vehicles used in driver training, as provided in paragraph 6 of Section 500.10 of this title, for use by a county, city, town, volunteer fire department, rural electric cooperative, rural water and sewer district, rural ambulance service district, or federally recognized Indian tribe, as provided in paragraph 7 of Section 500.10 of this title, and for use by the Oklahoma Space Industry Development Authority or any spaceport user, as provided in paragraph 17 of Section 500.10 of this title, shall be perfected as follows:
1. The ultimate vendor shall obtain a certificate signed by the purchasing entity listed in this section setting forth:
a. the name and address of the purchasing entity,
b. the quantity of motor fuel, or if the certificate is for all the motor fuel purchased by the purchasing entity, the certificate shall be for a period not to exceed three (3) years,
c. the exempt use of the motor fuel,
d. the name and address of the ultimate vendor from whom the motor fuel was purchased,
e. the federal employer identification number of the purchasing entity, and
f. a statement that the purchasing entity understands that the fraudulent use of the certificate to obtain fuel without paying the tax levied pursuant to Section 500.1 et seq. of this title shall result in the purchaser paying the tax, with penalties and interest, as well as such other penalties provided in Section 500.1 et seq. of this title;
2. The ultimate vendor, having obtained from the purchasing entity the certificate, which the ultimate vendor shall retain for a period of not less than three (3) years, shall execute an ultimate vendor certificate which shall contain the following information:
a. the name and address of the ultimate vendor,
b. the federal employment identification number of the ultimate vendor,
c. the quantity of motor fuel sold and the date of the sale,
d. a certification that the ultimate vendor sold motor fuel to the purchasing entity for the exempt purpose,
e. that the ultimate vendor has the necessary records to support the sale of the motor fuel, and
f. that the ultimate vendor understands and agrees that the fraudulent use of the certificate to obtain fuel without paying the tax levied pursuant to Section 500.1 et seq. of this title, or paying a refund of the tax, whether for the ultimate vendor or others, shall result in the payment of the tax by the ultimate vendor, with penalties and interest, as well as such other penalties provided in Section 500.1 et seq. of this title;
3. The ultimate vendor shall give the executed ultimate vendor certificate to the supplier who, having made reasonable commercial inquiries into the accuracy of the information in the certificate, shall be eligible to claim a credit against the tax liability on the ensuing monthly report of the supplier. As a condition of obtaining the credit, the supplier shall credit or refund the tax to the ultimate vendor who made the sale to the purchasing entity. If there is an intermediate vendor, or vendors, in the distribution chain between the supplier and the ultimate vendor, each vendor shall endorse the certificate, subject to rules promulgated by the Oklahoma Tax Commission, and transmit the certificate to the supplier and remit the credit, once received, to the customer of the intermediate vendor. The supplier and all vendors, if they accept the certificate in good faith and make a reasonable inquiry as to the accuracy of the information contained in the certificate, shall be held harmless if the purchasing entity has made a fraudulent claim; and
4. If the sale of motor fuel to the purchasing entity occurs at a fixed retail pump available to the general public, the ultimate vendor, having made the sale to the purchasing entity without the tax, may apply for a refund from the Tax Commission by submitting the application and supporting documentation as the Tax Commission shall reasonably prescribe by regulation. However, if the purchase is charged to a fleet or government fueling credit card, or to an oil company credit card issued to the purchasing entity, the ultimate vendor may bill the purchasing entity without the tax and seek a refund, or utilize the provisions of paragraph 1, 2, or 3 of this section if the issuer of the card is a supplier.
Added by Laws 1996, c. 345, § 13, eff. Oct. 1, 1996. Amended by Laws 1999, c. 164, § 39, eff. July 1, 1999.
§68-500.14. Perfection of certain exemptions by refund claim.
A. 1. The exemption for use pursuant to paragraph 11 of Section 500.10 of this title shall be perfected by a refund claim filed by the consumer who shall provide evidence of an allocation of use satisfactory to the Oklahoma Tax Commission.
2. The exemption for a consumer who claims a refund pursuant to paragraph 1 of this subsection for tax paid on fuel used to operate trucks designed, equipped and used exclusively for garbage, refuse or solid waste disposal shall be thirty-five percent (35%) of the tax paid on such fuel; provided, the taxpayer may claim an amount greater than thirty-five percent (35%) if the taxpayer supplies evidence of an allocation of use for a tax exempt purpose satisfactory to the Tax Commission of an amount greater than thirty-five percent (35%).
B. The exemption for motor fuel pursuant to paragraphs 14 and 15 of Section 500.10 of this title which fuel was purchased tax paid for a taxable use and was, after the purchase, contaminated by the presence of a dye or marker or subject to a sudden and unexpected casualty loss shall be refunded to the person responsible for the contamination or loss event upon application therefor and on proof shown acceptable to the Tax Commission.
C. Motor fuel tax that has otherwise been erroneously paid by a person shall be refunded by the Tax Commission upon proof shown satisfactory to the Tax Commission. The authority of the Tax Commission under this section shall be broadly construed to prevent unjust and unintended payment of taxes on exempt uses or by exempt users.
D. The consumer shall apply for a refund with respect to motor fuel purchased by the consumer for consumption in an exempt use described under paragraphs 8 and 13 of Section 500.10 of this title as to which the tax imposed by this act had been previously paid and no refund previously issued.
E. The exemption from taxation set forth in paragraph 10 of Section 500.10 of this title shall be perfected by the consumer applying for a refund with respect to motor fuel purchased by the consumer for consumption as to which the tax imposed by this act had been previously paid and no refund previously issued. The Tax Commission shall promulgate any necessary rules to administer this exemption.
F. Motor fuel tax that has been paid more than once with respect to the same gallon of motor fuel shall be refunded by the Tax Commission to the person who last paid the tax upon proof satisfactory to the Tax Commission.
Added by Laws 1996, c. 345, § 14, eff. Oct. 1, 1996. Amended by Laws 2004, c. 37, § 1, eff. Nov. 1, 2004.
§68-500.15. Perfecting exemptions for suppliers, tank wagon importers and importers of dyed diesel fuel.
All exemptions under Section 10 of this act, not expressly covered under Sections 11 through 14 of this act, shall be perfected as follows:
1. A supplier or tank wagon importer shall take a deduction against motor fuel shown on the monthly report for those gallons of diesel fuel removed from a terminal or refinery destined for delivery to a point in this state as shown on the shipping papers, as to which dye was added in a manner which conforms to federal requirements established by the Internal Revenue Code and regulations issued thereunder; or
2. An importer shall take a deduction against tax owed under Section 18 of this act for dyed diesel fuel if such diesel fuel would have met the requirements of paragraph 1 of this section.
Added by Laws 1996, c. 345, § 15, eff. Oct. 1, 1996.
§68-500.16. Procedures for claiming refund - Investigations - Credit in lieu of refund.
A. To claim a refund under Sections 10 through 14 of this act, a person shall present to the Commission a statement containing a written verification that the claim is made under penalties of perjury and lists the total amount of motor fuel purchased and used for exempt purposes. The claim shall not be transferred or assigned and shall be filed not more than three (3) years after the date the motor fuel was purchased. The statement shall show that payment for the purchase has been made and the amount of tax paid on the purchase has been remitted.
B. The Commission may make any investigations it considers necessary before refunding the motor fuel tax to a person and may investigate a refund after the refund has been issued and within the time frame for making adjustments to the tax under this act.
C. In any case where a refund would be payable to a supplier under this act, the supplier may claim a credit in lieu of such refund.
Added by Laws 1996, c. 345, § 16, eff. Oct. 1, 1996.
§68-500.17. Interest on refund.
If a refund is not issued within twenty (20) days of the filing required by this act, the Commission shall pay interest at the rate of six percent (6%) per annum from the date of filing of the claim for refund until the date on which the refund is made.
Added by Laws 1996, c. 345, § 17, eff. Oct. 1, 1996. Amended by Laws 1998, c. 254, § 1, eff. Nov. 1, 1998.
§68-500.18. Payment of tax by licensed occasional importers and licensed bonded importers.
Except as otherwise provided in this act, the tax imposed by Section 4 of this act on motor fuel measured by gallons imported from another state shall be paid by the:
1. Licensed occasional importer who has imported the nonexempt motor fuel within three (3) business days of the earlier of the time that the nonexempt motor fuel was entered into the state, or the time that a valid import verification number required by subsection F of Section 33 of this act was assigned by the Commission, under such rules and procedures as the Commission may provide; or
2. Licensed bonded importer who has imported the nonexempt motor fuel during a month on or before the twenty-fifth day of the following month unless such day falls upon a weekend or state or banking holiday, in which case the liability would be due the next succeeding business day.
However, if the supplier has made a blanket election to precollect tax under Section 19 of this act, then the supplier shall become jointly liable with the importer for the tax and shall remit the tax to the Commission on behalf of the importer under the same terms as a supplier payment under Section 20 of this act, and no import verification number shall be required.
Added by Laws 1996, c. 345, § 18, eff. Oct. 1, 1996.
§68-500.19. Election regarding fuel removals from out-of-state terminals.
A. Any licensed supplier or licensed permissive supplier may make a blanket election with the Commission to treat all removals from all of its out-of-state terminals with a destination in this state as shown on the terminal-issued shipping paper as if the removals were removed across the rack by the supplier from a terminal in this state for all purposes.
B. The election provided by this section shall be made by filing a "notice of election" with the Commission.
C. The Commission shall release a list of electing suppliers under this section upon request by any person.
D. The absence of an election by a supplier under this section shall in no way relieve the supplier of responsibility for remitting the tax imposed by this act upon the removal from an out-of-state terminal for import into this state by the supplier.
E. Any supplier which makes the election provided by this section shall precollect the tax imposed by this act on all removals from a qualified terminal on its account as a position holder, or as a person receiving fuel from a position holder pursuant to a two-party exchange agreement without regard to the license status of the person acquiring the fuel from the supplier, except deliveries from out-of-state terminals to licensed bonded importers, the point or terms of sale, or the character of delivery.
F. Each supplier who elects to precollect tax under this act agrees to waive any defense that the state lacks jurisdiction to require collection on all out-of-state sales by such person as to which the person had knowledge that the shipments were destined for this state and that this state imposes the requirement pursuant to this subsection under its general police powers to regulate the movement of motor fuels.
G. Each supplier who elects to precollect tax pursuant to this act shall not be subject to any civil penalties or interest imposed pursuant to this act for any corrections resulting from a diversion of the motor fuel from the original destination as represented by the purchaser or the agent of the purchaser. However, the supplier and exporter under this subsection may, by mutual agreement, permit the supplier to assume the liability of the exporter and adjust the taxes of the exporter payable to the supplier.
Added by Laws 1996, c. 345, § 19, eff. Oct. 1, 1996.
§68-500.20. Precollection and remittance of tax by suppliers.
A. The tax imposed by Section 500.4 of this title, measured by motor fuel removed by a licensed supplier from a terminal or refinery in this state other than a bulk transfer, shall be precollected and remitted on behalf of the retail consumers to the state by the supplier, as shown in the records of the terminal operator, who removes the taxable gallons.
B. The supplier, and each reseller, shall list the amount of tax as a separate line item on all invoices or billings.
C. All tax to be paid by a supplier with respect to gallons removed on the account of the supplier during a calendar month shall be due and payable on or before the twenty-seventh day of the following month unless such day falls upon a weekend or state or banking holiday in which case the liability would be due the next succeeding business day.
D. A supplier shall remit any late taxes remitted to the supplier by an eligible purchaser and shall timely notify the Commission of any late remittances if that supplier has previously given notice to the Commission of an uncollectible tax amount pursuant to subsection B of Section 500.24 of this title. For the purposes of reporting a payment received on previously claimed uncollectible taxes, any payments made to a supplier on a debt or account shall be applied first proportionally to the gallons sold and the tax thereon, and secondly to interest, service charges, and any other charges.
Added by Laws 1996, c. 345, § 20, eff. Oct. 1, 1996. Amended by Laws 2003, c. 472, § 9.
§68-500.21. Joint and several liability of termianl operators - Remittance of tax by terminal operators.
The terminal operator of a terminal in this state is jointly and severally liable for the tax imposed under Section 4 of this act and shall remit payment to this state upon discovery of either of the following conditions:
1. The supplier, with respect to the motor fuel, is a person other than the terminal operator and is not a licensed supplier. However, the terminal operator shall be relieved of liability if the terminal operator establishes all of the following:
a. the terminal operator has a valid terminal operator's license issued for the facility from which the motor fuel is withdrawn,
b. the terminal operator has an unexpired notification certificate from the supplier as required by the Commission or the Internal Revenue Service, and
c. the terminal operator has no reason to believe that any information on the certificate is false; or
2. In connection with the removal of diesel fuel that is not dyed and marked in accordance with Internal Revenue Service requirements, the terminal operator provides any person with any bill of lading, shipping paper, or similar document indicating that the diesel fuel is dyed and marked in accordance with Internal Revenue Service requirements.
Added by Laws 1996, c. 345, § 21, eff. Oct. 1, 1996.
§68-500.22. Election by eligible purchasers to defer motor fuel tax remittance.
Each supplier and bonded importer who sells motor fuel shall precollect and remit on behalf of and from the purchaser the motor fuel tax imposed under Section 4 of this act. At the election of an eligible purchaser, which notice shall be evidenced by a written statement from the Commission as to the purchaser eligibility status as determined under Section 23 of this act, the seller shall not require a payment of motor fuel tax on transport truck loads from the purchaser sooner than two (2) business days prior to the date on which the tax is required to be remitted by the supplier or bonded importer under Section 20 of this act. This election shall be subject to a condition that the remittances by the eligible purchaser of all amounts of tax due the seller shall be paid on the basis of ninety-eight and four-tenths percent (98.4%) for gasoline and ninety-eight and one-tenth percent (98.1%) for diesel fuel and which shall be paid by electronic funds transfer on or before the second preceding day prior to the date of the remittance by the supplier to the Commission, and the election by the eligible purchaser under this section may be terminated by the seller if the eligible purchaser does not make timely payments to the seller as required by this section.
Added by Laws 1996, c. 345, § 22, eff. Oct. 1, 1996.
§68-500.23. Election to defer motor fuel tax remittances - Rescission of eligibility and election by Commission.
A. Each purchaser that desires to make an election under Section 500.22 of this title shall submit a request to the Oklahoma Tax Commission for approval, setting forth such information as the Tax Commission may require.
B. The Tax Commission may require a purchaser which pays the tax to a supplier to file with the Tax Commission a surety bond payable to the state, upon which the purchaser is the obligor or other financial security, in an amount satisfactory to the Tax Commission. The Tax Commission may require that the bond indemnify the Tax Commission against uncollectible tax credits claimed by the supplier under Section 500.24 of this title.
C. The Tax Commission shall have the authority to rescind a purchaser's eligibility and election to defer motor fuel tax remittances after a hearing and upon a showing of good cause, including failure to make timely tax-deferred payment of tax to a supplier under Section 500.22 of this title, by sending written notice to all suppliers or publishing notice of the revocation pursuant to regulations. The Tax Commission may require further assurance of the financial responsibility of the purchaser, or may increase the bond requirement for that purchaser, or any other action that the Tax Commission may require to ensure remittance of the motor fuel tax. The Tax Commission shall follow the cancellation procedures as provided in Section 212 of this title in rescinding eligible purchaser status.
Added by Laws 1996, c. 345, § 23, eff. Oct. 1, 1996. Amended by Laws 2005, c. 479, § 9, eff. July 1, 2005.
§68-500.24. Suppliers' entitlement to credit for uncollectible taxes.
A. In computing the amount of motor fuel tax due, the supplier shall be entitled to a credit against the tax payable the amount of tax paid by the supplier that has become uncollectible from an eligible purchaser.
B. The supplier shall provide notice to the Commission of a failure to collect tax within ten (10) business days following the date on which the supplier was earliest entitled to collect the tax from the eligible purchaser under Section 22 of this act.
C. The Commission shall adopt rules establishing the evidence a supplier must provide to receive the credit.
D. The credit shall be claimed on the first return following the expiration of the ten-day period as provided in this section if the payment remains unpaid as of the filing date of that return or the credit shall be disallowed.
E. The claim for credit shall identify the defaulting eligible purchaser and any tax liability that remains unpaid.
F. If an eligible purchaser fails to make a timely payment of the amount of tax due, the credit of the supplier shall be limited to the amount due from the purchaser, plus any tax that accrues from that purchaser for a period of ten (10) days following the date of failure to pay.
G. No additional credit shall be allowed to a supplier under this section until the Commission has authorized the purchaser to make a new election under Section 23 of this act.
Added by Laws 1996, c. 345, § 24, eff. Oct. 1, 1996.
§68-500.25. Remittance of motor fuel taxes by licensed tank wagon operator-importers.
Each licensed tank wagon operator-importer who is liable for the tax imposed by this act on nonexempt motor fuel imported by a tank wagon as to which tax has not previously been paid to a supplier, shall remit the motor fuel tax for the preceding month's import activities with the monthly report of activities. The remittance of all amounts of tax due shall be paid on the basis of ninety-eight and four-tenths percent (98.4%) for gasoline and ninety-eight and one-tenth percent (98.1%) for diesel fuel.
Added by Laws 1996, c. 345, § 25, eff. Oct. 1, 1996.
§68-500.26. Remittance by electronic funds transfer required.
All suppliers and bonded importers required to remit the motor fuel tax shall remit the motor fuel taxes due by electronic fund transfer acceptable to the Commission. The transfer or payment shall be made on or before the date the tax is due.
Added by Laws 1996, c. 345, § 26, eff. Oct. 1, 1996.
§68-500.27. Retainage of 0.1% of tax for administrative costs.
Every supplier and permissive supplier which properly remits tax under this act shall be allowed to retain one-tenth of one percent (0.1%) of the tax imposed by this act and collected and remitted by that supplier in accordance with this act to cover the costs of administration imposed by this act including reporting, audit compliance, dye injection, and shipping paper preparation.
Added by Laws 1996, c. 345, § 27, eff. Oct. 1, 1996.
§68-500.28. Collection from ultimate consumer - Joint and several liability of ultimate vendor.
A. In the event the tax imposed by Section 4 of this act is not otherwise precollected, it shall be collected from the ultimate consumer in accordance with regulations promulgated by the Commission, for the use of motor fuel on the highways by any consumer, unless such person is otherwise exempted pursuant to paragraphs 5, 6 and 7 of Section 10 of this act, upon the delivery into the fuel supply tank of a highway vehicle of, including, but not limited to:
1. Any diesel fuel that contains a dye; or
2. Any motor fuel on which a claim for refund has been made.
B. The ultimate vendor of motor fuel, other than a federally recognized Indian tribe, shall be jointly and severally liable for the backup tax precollected by subsection A of this section if the ultimate vendor knows or has reason to know that the motor fuel, as to which tax imposed by this act has not been paid, is or will be consumed in a nonexempt use.
Added by Laws 1996, c. 345, § 28, eff. Oct. 1, 1996.
§68-500.29. Diversions of motor fuel - Payment of tax.
A. In the event an exporter diverts motor fuel removed from a terminal in this state from an intended destination outside this state as shown on the terminal-issued shipping papers to a destination within this state, the exporter, in addition to compliance with the notification provided for in Section 46 of this act, shall notify and pay the tax imposed by Section 4 of this act to the state upon the same terms and conditions as if the exporter were an occasional importer licensed under Section 18 of this act. Each supplier who elects to precollect tax pursuant to this act shall not be subject to any civil penalties or interest imposed pursuant to this act for any corrections resulting from a diversion of the motor fuel from the original destination as represented by the purchaser or the agent of the purchaser. However, the supplier and exporter under this subsection may, by mutual agreement, permit the supplier to assume the liability of the exporter and adjust the taxes of the exporter payable to the supplier.
B. In the event that an exporter removes from a bulk plant in this state motor fuel as to which the tax imposed by this act has previously been paid or accrued, the exporter may apply for and the state shall issue a refund of the tax upon a showing of proof of export satisfactory to the Commission in conformity with Section 11 of this act.
C. In the event that an unlicensed importer diverts motor fuel from a destination outside this state to a destination inside this state after having removed the product from a terminal outside this state, the importer, in addition to compliance with the notification provided for in Section 46 of this act, shall notify the state and shall pay the tax imposed by this act to this state upon the same terms and conditions as if the unlicensed importer were a licensed occasional importer subject to Section 18 of this act without deduction for the allowances provided by Section 27 of this act. However, an importer who has purchased the product from a licensed supplier may, by mutual agreement with the supplier, permit the supplier to assume the liability of the importer and adjust the taxes of the importer payable to the supplier.
D. All licensed importers shall otherwise report and pay tax on diversions into this state of imported product under Section 18 of this act in accordance with the rules applicable to that license class. However, an importer who has purchased the product from a licensed supplier may, by mutual agreement with the supplier, permit the supplier to assume the liability of the importer and adjust the taxes of the importer payable to the supplier.
E. If a monthly report is filed or the amount due is remitted later than the time required by this act, the tax remitter shall pay to the Commission all of the motor fuel tax the remitter collected from the sale of motor fuel during the taxable period in addition to penalties and interest.
F. In the event of a legal diversion from a destination in this state to another state, Section 45 of this act shall apply and an unlicensed exporter diverting the product shall apply for a refund from this state in conformity with paragraph 2 of Section 10 of this act and Section 11 of this act. However, a supplier may take a credit for diversions directed by that supplier for the account of the supplier. Additionally, the exporter may, by mutual agreement with the supplier, assign the claim of the exporter to the supplier for which the supplier may take a credit.
G. In the event that the second state involved in a cross-border shipment has entered into a multi-state compact with this state, the diverter shall pay or seek refund only upon the difference in state taxes with notice to both states upon proof shown of payment to the actual destination state. The Commission shall periodically determine procedures for making this adjustment and a list of those states which meet these criteria.
Added by Laws 1996, c. 345, § 29, eff. Oct. 1, 1996.
§68-500.30. Deferred payment by vendors without eligible purchaser.
A. The final report required by Section 40 of this act shall be accompanied by payment of the liability of the final month except as otherwise provided in this section.
B. Any motor fuel vendor who possessed a license to sell motor fuel at wholesale or at retail prior to the effective date of this act who is ineligible to elect eligible purchaser status, or who otherwise does not apply for or does not receive eligible purchaser status under Section 23 of this act, may in the alternative elect to make payment of the tax calculated pursuant to the final report provided in Section 40 of this act if the tax is paid in two equal installments beginning twelve (12) months after the effective date of this act and subject to regulations promulgated by the Commission.
C. If a person elects under subsection B of this section to defer payment, the person shall not be eligible to claim eligible purchaser status under Section 23 of this act for a period of thirty-six (36) months following the election under subsection B of this section.
Added by Laws 1996, c. 345, § 30, eff. Oct. 1, 1996.
§68-500.31. Blending untaxed materials with taxed fuels - Remittance of tax.
A. Each person blending untaxed materials, including blendstocks, fuel grade ethanol and additives with motor fuels as to which tax has already been paid or accrued shall remit the tax imposed by this act.
B. Any consumer liable for the tax payable under subsection A of this section shall remit the tax directly to the Commission within thirty (30) days of the blending event in accordance with regulations promulgated by the Commission.
Added by Laws 1996, c. 345, § 31, eff. Oct. 1, 1996.
§68-500.32. Importation of motor fuel in tank wagons - Destination within 25 miles of border - Remittance of tax.
Subject to gallonage limits and other conditions established by the Commission, the Commission shall provide for the payment of tax imposed by this act by a person importing gasoline or diesel motor fuel from a bulk plant in another state in a tank wagon if the destination of that vehicle does not exceed twenty-five (25) miles from the border of this state.
Added by Laws 1996, c. 345, § 32, eff. Oct. 1, 1996.
§68-500.33. Licenses.
A. Each supplier engaged in business in this state as a supplier shall first obtain a supplier's license.
B. Any person who desires to precollect the tax imposed by this act as a supplier and who meets the definition of a permissive supplier may obtain a permissive supplier's license. Application for or possession of a permissive supplier's license shall not in itself subject the applicant or licensee to the jurisdiction of this state for any other purpose than administration and enforcement of this act.
C. Each terminal operator, other than a supplier licensed under subsection A of this section, engaged in business in this state as a terminal operator shall first obtain a terminal operator's license for each terminal site.
D. Each person, except suppliers, desiring to export motor fuel to a destination outside of this state shall first obtain an exporter's license. The state shall require that any exporter who exports product to another state without first paying the motor fuel tax of that destination state to the supplier shall first obtain an exporter's license.
E. Each person who is not licensed as a supplier or bonded importer shall obtain a transporter's license before transporting motor fuel by whatever manner from a point outside this state to a point inside this state, or from a point inside this state to a point outside this state, regardless of whether the person is engaged for hire in interstate commerce or for hire in intrastate commerce.
F. 1. Each person desiring to deliver motor fuel into this state on behalf of such person, for the account of that person, or for resale to a purchaser in this state, from another state in a fuel transport truck or in a pipeline or barge shipment into storage facilities other than a qualified terminal, shall first make application for and obtain either an occasional importer's license, or a bonded importer's license.
2. Paragraph 1 of this subsection shall not apply to persons who exclusively import motor fuel which is exempted because in accordance with paragraph 16 of Section 10 of this act it has been dyed.
3. Paragraph 1 of this subsection shall not apply to persons who import nonexempt motor fuels meeting the following conditions:
a. all of the motor fuel is subject to one or more tax precollection agreements with suppliers as provided under Section 19 of this act,
b. all of the motor fuel tax precollected by the supplier is expressly evidenced on the terminal-issued shipping paper as more specifically provided under Section 44 of this act, and
c. the Commission has determined that all border states have adopted terminal reporting requirements adequate for the mutual enforcement of this act.
4. A person desiring to import motor fuel to a destination in this state from another specific terminal source state, and who has not entered into an agreement to prepay the motor fuel tax of this state to the supplier or permissive supplier with respect to the imports, shall obtain a valid occasional importer's license, or subject to the bonding requirements of subsection B of Section 35 of this act, a valid bonded importer's license under paragraph 1 of this subsection. In either event, the person shall:
a. obtain an import verification number from the Commission no sooner than twenty-four (24) hours prior to entering the state for each separate import into this state, but in any event the number shall be obtained prior to entering this state, and
b. display the handwritten import verification number on the terminal-issued shipping document required under Section 50 of this act, and
c. comply with the payment requirements under Section 18 of this act, whichever is applicable.
5. The importers' licenses issued pursuant to this section shall be specific to each source of supply state, and in the event that the other terminal source of supply state shall have adopted reciprocal legislation, or a multi-state compact, providing for collection of destination state tax by the terminal supplier in accordance with terminal-issued shipping papers designating the intended state of destination, then the importer shall be ineligible for a license to import motor fuel outside the bulk transfer system from the other state, and any license to so import from the other state shall be rendered invalid.
G. Each person who is an importer of motor fuel into this state by a tank wagon operating out of or controlling a bulk plant in another state, if the destination of that tank wagon is within twenty-five (25) miles of the border of this state, shall make application for and obtain a license from the Commission prior to engaging in such importation activities. However, registration as a tank wagon operator-importer shall not constitute authorization of such persons to acquire nonexempt motor fuel free of the tax imposed by this act at a terminal either within this state or without this state for direct delivery to a location in this state. Any person who possesses a valid importer's license shall be eligible as a tank wagon operator-importer without issuance of a separate license provided the importer also operates one or more bulk plants outside this state. Operators of a tank wagon delivering a product into this state more than twenty-five (25) miles from the border shall be required to apply for an importer's license under subsection F of this section.
H. 1. Each person who engages in the business of selling motor fuel at wholesale or retail, or storing or distributing motor fuel for resale within this state, shall first obtain a fuel vendor license which shall be operative for all locations controlled or operated by that licensee in this state or in any other state from which the person removes fuel for delivery and use in this state.
2. Each fuel vendor shall maintain detailed records of all purchases and sales for a period of not less than three (3) years.
3. All fuel vendor records shall be maintained in English and Arabic numerals or language acceptable to electronic formats.
4. The Commission may, in its discretion, exempt from paragraph 1 of this subsection any or all classes of persons who possess a valid supplier, terminal operator, carrier, importer, tank wagon operator or exporter license.
Added by Laws 1996, c. 345, § 33, eff. Oct. 1, 1996.
§68-500.34. License application process.
A. Each application for a license under this act shall be made upon a form prepared and furnished by the Commission. It shall be subscribed to by the applicant and shall contain the information as the Commission may reasonably require for the administration of this act, including the applicant's federal identification number and, with respect to the applicant for an exporter's license, a copy of the applicant's license to purchase or handle motor fuel tax free in the specified destination state or states for which the export license is to be issued.
B. The Commission shall investigate each applicant for a license under this act. No license shall be issued if the Commission determines that any one of the following exists:
1. The application is not filed in good faith;
2. The applicant is not the real party in interest;
3. The license of the real party in interest has been revoked for cause;
4. Any good cause the Commission may determine;
5. With respect to an exporter's license, the applicant is not licensed in the intended specific state(s) of destination; or
6. The applicant has a prior conviction for motor fuel tax evasion.
C. Applicants, including corporate officers, partners, and individuals, for a license issued by the Commission may be required to submit their fingerprints to the Commission at the time of applying. Officers of publicly held corporations and their subsidiaries shall be exempt from this fingerprinting provision. Persons, other than applicants for an importer's license, who possessed licenses issued under a predecessor statute continuously for three (3) years prior to the effective date of this act shall also be exempt from this provision. Fingerprints required by this section must be submitted on forms prescribed by the Commission. The Commission may forward to the Federal Bureau of Investigation or any other agency for processing all fingerprints submitted by license applicants. The receiving agency shall issue its findings to the Commission. The Commission, or another state agency, may maintain a file of fingerprints.
Added by Laws 1996, c. 345, § 34, eff. Oct. 1, 1996.
§68-500.35. Bond - Alternative proof of financial responsibility - Qualifications of bond - Financial statements and inquiry - New bond required - Release of existing bond.
A. 1. Terminal operators shall be required to post a bond of not less than three (3) months potential tax liability based on the number of gallons handled as estimated by the Commission, but in no event shall the bond be more than Five Hundred Thousand Dollars ($500,000.00).
2. Exporters shall be required to post a bond of not less than three (3) months potential tax liability based on the number of gallons handled as estimated by the Commission, but in no event shall the bond be more than One Million Dollars ($1,000,000.00).
3. Transporters shall be required to post a bond of not less than three (3) months potential tax liability based on the number of gallons handled as estimated by the Commission, but in no event shall the bond be more than One Hundred Thousand Dollars ($100,000.00).
4. Tank wagon importers shall be required to post a bond of not less than three (3) months potential tax liability based on the number of gallons handled as estimated by the Commission, but in no event shall the bond be more than Fifty Thousand Dollars ($50,000.00).
B. Suppliers and bonded importers shall be required to post a bond of not less than three (3) months potential tax liability based on the number of gallons handled as estimated by the Commission, but in no event shall the bond be less than One Hundred Thousand Dollars ($100,000.00) nor more than Two Million Dollars ($2,000,000.00). An applicant may alternatively show proof of financial responsibility in the following amounts in lieu of posting of bond or in lieu of posting of the full amount of bond, which shall constitute evidence of financial responsibility in the absence of circumstances indicating the Commission is otherwise at risk with respect to collection of taxes from the applicant:
1. Proof of Five Million Dollars ($5,000,000.00) net worth shall constitute evidence of financial responsibility in lieu of posting of bond;
2. Proof of Two Million Five Hundred Thousand Dollars ($2,500,000.00) net worth shall constitute financial responsibility in lieu of posting one-half (1/2) of the bond; and
3. Proof of One Million Two Hundred Fifty Thousand Dollars ($1,250,000.00) net worth shall constitute financial responsibility in lieu of posting one-fourth (1/4) of the bond.
C. If the applicant files a bond, the bond shall:
1. Be with a surety company approved by the Commission which may be an affiliate in the business of assuring such obligations;
2. Name the applicant as the principal and the state as the obliged; and
3. Be on forms prescribed by the Commission.
D. The Commission may, at the reasonable discretion of the Commission, require a licensee, or an applicant, to furnish current verified, financial statements. The Commission may make independent inquiry into the financial condition of the applicant and, in any case, is not required to accept as accurate financial statements which have not been certified or independently audited. If the Commission determines that a financial condition of a licensee warrants an increase in the bond or cash deposit, the Commission may require the licensee to furnish an increased bond or cash deposit.
E. 1. The Commission may require a licensee to file a new bond with a satisfactory surety in the same form and amount if:
a. liability upon the previous bond is discharged or reduced by a judgment rendered, payment made, or otherwise disposed of, or
b. in the opinion of the Commission, any surety on the previous bond becomes unsatisfactory.
If the new bond is unsatisfactory, the Commission shall cancel the license. If the new bond is satisfactorily furnished, the Commission shall release in writing the surety on the previous bond from any liability accruing after the effective date of the new bond.
2. If a licensee has a cash deposit with the Commission and the deposit is reduced by a judgment rendered, payment made, or otherwise disposed of, the Commission may require the licensee to make a new deposit equal to the amount of the reduction.
F. 1. If the Commission reasonably determines that the amount of the existing bond or cash deposit is insufficient to ensure payment to the state of the tax and any penalty and interest for which the licensee is or may become liable, the licensee shall, upon written demand of the Commission, file a new bond or increase the cash deposit. The Commission shall allow the licensee at least fifteen (15) days to secure the increased bond or cash deposit.
2. The new bond or cash deposit shall meet the requirements set forth in this act.
3. If the new bond or cash deposit required under this section is unsatisfactory, the Commission shall cancel the license.
G. 1. Sixty (60) days after making a written request for release to the Commission, the surety of a bond furnished by a licensee shall be released from any liability to the state accruing on the bond after the sixty-day period. The release does not affect any liability accruing before the expiration of the sixty-day period.
2. The Commission shall promptly notify the licensee furnishing the bond that a release has been requested. Unless the licensee obtains a new bond that meets the requirements of this act and files with the Commission the new bond within the sixty-day period, the Commission shall cancel the license.
3. Sixty (60) days after making a written request for release to the Commission, the cash deposit provided by a licensee shall be canceled as security for any obligation accruing after the expiration of the sixty-day period. However, the Commission may retain all or part of the cash deposit for up to three (3) years and one (1) day as security for any obligations accruing before the effective date of the cancellation. Any part of the deposit not retained by the Commission shall be released to the licensee. Before the expiration of the sixty-day period, the licensee shall provide the Commission with a bond that satisfies the requirements of this act or the Commission shall cancel the license.
4. Any licensee who has filed a bond or other security under this act is entitled, on request, to have the Commission return, refund, or release the bond or security if, in the judgment of the Commission, the licensee has continuously complied with the provisions of this act for the previous three (3) consecutive years. However, if the Commission determines that the revenues of the state would be jeopardized by the return, refund or release of bond or security, the Commission may elect to retain the bond or security, or having released such, may reimpose a requirement for bond or security to protect the revenues of this state. The decision of the Commission to not release a bond or security may be reviewed, after application by the licensee, pursuant to the Administrative Procedures Act.
H. In the event any applicant for a license applies for more than one license pursuant to this act, the applicant shall not be required to post a bond for each license, but shall be required to post the bond for the license which requires the greatest amount of bond.
Added by Laws 1996, c. 345, § 35, eff. Oct. 1, 1996.
§68-500.36. Issuance of licenses - Duration - Nontransferability - Display - Surrender - Notice of discontinuance, sale or transfer of business.
A. If the applicant and bond are approved, the Commission shall issue a license and as many copies as the licensee has places of business for which a license is required.
B. A license is valid until suspended, revoked for cause, or canceled.
C. No license is transferable to another person or to another place of business. For purposes of this section, a transfer of a majority interest in a business association, other than a publicly held association, including corporations, partnerships, trusts, joint ventures and any other business association shall be deemed to be a transfer of any license held by the business association to another person. Any substantial change in ownership of a business association, other than a publicly held business association, shall be reported to the Commission pursuant to rules promulgated by the Commission.
D. Each license shall be preserved and conspicuously displayed at the place of business for which it is issued. The Commission shall have authority to waive this requirement for any class of licensee in its discretion.
E. Upon the discontinuance or relocation of the business, the license issued for the location shall be immediately surrendered to the Commission.
F. Whenever any person licensed to do business under this act discontinues, sells, or transfers the business, the licensee shall immediately notify the Commission in writing of the discontinuance, sale, or transfer. The notice shall give the date of discontinuance, sale, or transfer and in the event of the sale or transfer of the business, the name and address of the purchaser or transferee. The licensee shall be liable for all taxes, interest, and penalties that accrue or may be owing and any criminal liability for misuse of the license that occurs prior to issuance of the notice.
Added by Laws 1996, c. 345, § 36, eff. Oct. 1, 1996.
§68-500.37. Supplier reports.
A. For the purpose of determining the amount of precollected motor fuel tax due, every supplier shall file with the Commission, on forms prescribed and furnished by the Commission, a verified statement. The Commission may require the reporting of any information reasonably necessary to determine the amount of precollected motor fuel tax due.
B. The reports required by this section shall be filed with respect to information for the preceding calendar month on or before the twenty-seventh day of the current month.
C. The supplier report required by this section shall include the following information with respect to billed gallons of motor fuel, for all products in the aggregate provided the supplier shall identify if billed gallon is net or gross:
1. Removal of gallons of motor fuel by the reporting supplier from the bulk transfer/terminal system in this state as to which the tax imposed by this act has been precollected or accrued by the reporting supplier;
2. Removal of gallons of diesel fuel or heating oil from terminals in this state by the reporting supplier, tax exempt, as to which dye has been added in accordance with paragraph 16 of Section 10 of this act;
3. Removal of gallons of motor fuel from terminals in this state by the reporting supplier, tax exempt, for export from this state by that supplier, sorted by state of destination;
4. Removal of gallons of motor fuel from terminals in this state by the reporting supplier, tax exempt, for sale to licensed exporters, sorted by state of destination;
5. Removal of gallons of motor fuel from terminals within this state for sale by the reporting supplier directly to the United States government or any agency or instrumentality thereof;
6. Removal of gallons of motor fuel from terminals within this state for sale by the reporting supplier directly to consumers other than the federal government, or any agencies and instrumentalities thereof, for any other exempt use for which the consumers have properly assigned refund claims to the ultimate vendor and each distributor in the chain including the reporting supplier;
7. Total removals in this state;
8. Removal of gallons of motor fuel from a terminal in another state by the reporting supplier, for sale to a licensed importer, tax exempt, for import into this state by that licensed importer;
9. Removal of gallons of motor fuel from a terminal in another state by the reporting supplier for import other than by bulk transfer by that supplier into this state, or for sale by the reporting supplier to a person for import into this state by that person, and in either case, as to which the tax in this state was accrued by the reporting supplier at the time of removal from the out-of-state terminal;
10. Removal of gallons of diesel fuel or heating oil from a terminal in another state by the reporting supplier, for import or for sale for import into this state, as to which dye has been added in accordance with paragraph 16 of Section 10 of this act;
11. Total removals from out-of-state terminals with this state as the state of destination;
12. Corrections made by the supplier pursuant to Section 17 of this act for changes in destination state which affect the tax liability of the supplier or the customer of the supplier to this state; and
13. Such other information which the Commission in its discretion determines is reasonably required to determine tax liability under this act.
D. Every licensed supplier or permissive supplier shall separately disclose and identify, in a written statement to the Commission with the supplier or permissive supplier report, any removal and sale from the bulk transfer/terminal system in another state by that supplier to a person other than a licensed supplier, permissive supplier or importer of gallons of motor fuel, other than diesel fuel dyed in accordance with paragraph 16 of Section 10 of this act, and which gallons are destined for this state, as shown by the terminal-issued shipping paper, and as to which gallons the tax imposed by this act has not been collected or accrued by the supplier upon the removal. Any person who knowingly violates or knowingly aids or abets another to violate this provision shall be guilty of a misdemeanor and shall, upon conviction, be fined not more than One Thousand Dollars ($1,000.00), or shall be sentenced to a term of not more than one (1) year in the county jail, or both such fine and imprisonment.
E. Each supplier shall separately identify each sale of K-1 kerosene, other than dyed diesel fuel, sold free of tax in accordance with reporting requirements established by the Commission.
Added by Laws 1996, c. 345, § 37, eff. Oct. 1, 1996.
§68-500.38. Statement of operations - Licensed occasional importers, licensed bonded importers and licensed tank wagon importers.
A. Each licensed occasional importer and each licensed bonded importer shall file with the Commission by the twenty-seventh day of each month a verified sworn statement of operations within this state including:
1. Taxable gallons tax prepaid to a supplier upon removal from an out-of-state terminal;
2. With regard to a licensed occasional importer, taxable gallons subject to the three-day payment rule as set forth in Section 500.18 of this title sorted by source state, by supplier, and by terminal or bulk plant location;
3. With regard to a licensed bonded importer, taxable gallons subject to tax remittance by the bonded importer according to Section 500.18 of this title, sorted by source state, by supplier, and by terminal or bulk plant;
4. Such other information with respect to the source and means of transportation of nonexempt motor fuel as the Commission in its discretion may require on forms prescribed and furnished by the Commission. However, the Commission may waive any portion or all of the reporting requirements if it determines that border states have adopted and implemented reciprocal terminal report requirements adequate to assure the Commission that it receives complete information in respect of motor fuel removed by and on behalf of suppliers from terminals in border states which is destined for this state.
B. Each licensed tank wagon importer shall file with the Commission by the twenty-fifth day of each month a verified sworn statement of operations within this state and such other information in respect of the source and means of transportation of nonexempt motor fuel as the Commission in its discretion may require on forms prescribed and furnished by the Commission.
C. A person who knowingly violates or knowingly aids and abets another to violate this section shall be guilty of a misdemeanor and shall, upon conviction, be fined not more than One Thousand Dollars ($1,000.00), or shall be sentenced to a term of not more than one (1) year in the county jail, or shall be punishable by both such fine and imprisonment.
Added by Laws 1996, c. 345, § 38, eff. Oct. 1, 1996. Amended by Laws 1998, c. 385, § 6, eff. Nov. 1, 1998.
§68-500.39. Statement of operations by terminal operators - Inventory records - Reports by out-of-state terminal operators.
A. Each person operating a terminal in this state shall file with the Commission by the twenty-seventh day of each month a sworn statement of operations within this state for each terminal within this state, including the information set out in subsection B of this section, on forms prescribed and furnished by the Commission. The Commission may require the reporting of any information it considers reasonably necessary in addition to that required under subsection B of this section.
B. The monthly terminal report required by this section shall include the following information for each terminal location in this state:
1. Terminal code assigned by the Internal Revenue Service;
2. Total inventory at the terminal operated by the terminal operator;
3. Detailed schedules of receipts by shipment including:
a. carrier name or alpha code,
b. carrier federal identification number,
c. mode of transportation,
d. date received,
e. document number,
f. net gallons received, and
g. product type;
4. Detailed schedules of removals by shipment including:
a. carrier name or alpha code,
b. carrier federal identification number,
c. mode of transportation,
d. destination state,
e. supplier removing the fuel,
f. supplier federal identification number,
g. date removed from terminal,
h. document number,
i. net gallons, and
j. gross gallons;
In the event the Internal Revenue Service provides a common system of assigning to carriers alpha-numeric codes in lieu of names, then this data will be required in lieu of carrier names.
C. For purposes of reporting and determining tax liability under this act, every licensee shall maintain inventory records as required by the Commission.
D. In the event that the source state does not require a terminal report which provides data substantially similar to that required by this section, any terminal operator subject to the police power of this state, and who operates a terminal outside that state, shall provide a report of gallons removed as to which the operator issued a shipping paper indicating this state as the destination state consistent with the information required under this section. This provision shall be ineffective if substantially similar data is readily available to this state from a federal terminal report or from the source state.
Added by Laws 1996, c. 345, § 39, eff. Oct. 1, 1996.
§68-500.40. Final report and payment of tax upon termination of business or cancellation of license - Termination of certain licenses - Application by former licensees for eligible purchaser status.
A. Every licensee shall, upon the discontinuance, sale, or transfer of the business or upon the cancellation, revocation or termination by law of a license under subsection C or F of Section 36 of this act, or as otherwise provided, within thirty (30) days, make a report as required under this act marked "Final Report", and shall pay all motor fuel taxes and penalties that may be due the state except as may otherwise be provided by law.
B. The payment shall be made to the Commission in accordance with Section 30 of this act.
C. For purposes of this section, any person who was licensed to remit motor fuel taxes by this state prior to the effective date of this act and who is not licensed as a supplier under this act shall be deemed to have the license terminated under this section as of the effective date of this act.
D. Any former licensee shall be given the opportunity to apply for eligible purchaser status as provided in Sections 22 and 23 of this act, prior to the effective date of this act. Should such determination not be complete before the effective date, collection of tax shown on the final report of the former license shall be delayed until the determination is complete. However, the final report shall be due not later than thirty (30) days after a denial of eligible purchaser status under Section 30 of this act becomes final.
Added by Laws 1996, c. 345, § 40, eff. Oct. 1, 1996.
§68-500.41. Exporter reports.
A. Each person licensed as an exporter shall file by the twenty-seventh day of each month reports with the Commission on forms prescribed and furnished by the Commission concerning the amount of motor fuel exported from this state.
B. The report shall contain the following information with respect to motor fuel other than diesel fuel dyed in accordance with the Internal Revenue Code:
1. All shipments of motor fuel removed from a terminal in this state for direct delivery outside of this state by the licensed exporter, sorted by state of destination;
2. The gallons delivered to taxing jurisdictions outside this state out of bulk plant storage, and whether by transport truck or tank wagon;
3. The name and federal employer identification number of the person receiving the exported motor fuel from the exporter;
4. The date of the shipments; and
5. The carrier name or alpha code and carrier federal identification number.
The Commission may, in addition, require the reporting of any other information it considers reasonably necessary to the enforcement of this act. The Commission may waive this reporting requirement if it finds the reports unnecessary to the administration of this act.
Added by Laws 1996, c. 345, § 41, eff. Oct. 1, 1996.
§68-500.42. Licensed transporter reports.
A. Each person licensed as a transporter in this state shall file monthly reports with the Commission on forms prescribed and furnished by the Commission concerning the amount of motor fuel transported within or across the borders of this state. However, transport truck operations exclusively within the state and those transport trucks operated by a supplier are not reportable. If a transporter fails to make the reports required by this section, the person is subject to a civil penalty of One Thousand Dollars ($1,000.00) for each violation, as reasonably determined by the Commission.
B. The reports required by this section are for information purposes only and the Commission may waive the filing of the reports if the reports are unnecessary for the proper administration of this act. This section shall cease to be effective if substantially similar data is available from federal government sources including a federal terminal report.
Added by Laws 1996, c. 345, § 42, eff. Oct. 1, 1996.
§68-500.43. Payment of tax by consumer.
In the event the tax imposed by this act is not precollected and must be collected from the consumer in accordance with Section 28 of this act, the tax is due and payable by the consumer on the first day of each month for the preceding calendar month, and if not paid on or before the 15th day of the following month, shall be delinquent. The consumer shall file with the Commission, on forms furnished by the Commission, a return verified by affidavit showing in detail the total purchase price of the motor fuel, the number of gallons purchased, the price per gallon, the location of the purchase and any other information the Commission may deem reasonably necessary. With each return, the consumer shall remit to the Commission the amount of tax shown on the return to be due. Reports timely mailed shall be considered timely filed. If a report is not timely filed, interest shall be charged from the date the report should have been filed until the report is actually filed.
Added by Laws 1996, c. 345, § 43, eff. Oct. 1, 1996.
§68-500.44. Shipping documents - Contents - Manual preparation - Certain bulk plant operators exempted - Split loads - Posting of notice - Penalties.
A. Each person operating a refinery, terminal, or bulk plant in this state shall prepare and provide to the driver of every fuel transportation vehicle receiving motor fuel into the vehicle storage tank at the facility a shipping document setting out on its face:
1. Identification by address of the terminal or bulk plant from which the motor fuel was removed;
2. The date the motor fuel was removed;
3. The amount of motor fuel removed, actual gallons and net gallons;
4. The state of destination as represented to the terminal operator by the transporter, the shipper or the agent of the shipper; and
5. Any other information reasonably required by the Commission for the enforcement of this act.
B. A terminal operator may manually prepare shipping papers if the terminal does not have the ability to prepare automated shipping papers or as a result of extraordinary unforeseen circumstances, including acts of God, which temporarily interfere with the ability of the terminal operator to issue automated machine-generated shipping papers. However, the terminal operator shall, prior to manually preparing the papers, provide, in the case of a terminal not having the ability to prepare automated shipping papers, written notice to the Commission, or in the case of extraordinary circumstances, telephonic notice to the Commission and obtain a service interruption authorization number which the employees of the terminal operator shall add to the manually prepared papers prior to removal of each effected transport load from the terminal. The service interruption authorization number shall be valid for use by the terminal operator for a period not to exceed twenty-four (24) hours. If the interruption has not been cured within the twenty-four-hour period, additional notice(s) to the Commission shall be required and interruption authorization number(s) may be issued upon explanation by the terminal operator satisfactory to the Commission. If the terminal operator acquires the ability to prepare automated machine-printed shipping papers, the terminal operator shall notify the Commission no later than ten (10) days prior to the initial use of such capability.
C. An operator of a bulk plant in this state delivering motor fuel into a tank wagon for subsequent delivery to a consumer in this state shall be exempt from this section. An operator of a bulk plant in this state shall not be required to identify net gallons on the shipping documents as provided by this section.
D. A terminal operator may load motor or diesel fuel, a portion of which fuel is destined for sale or use in this state and a portion of which fuel is destined for sale or use in another state or states. However, such split loads removed shall be documented by the terminal operator by issuing shipping papers designating the state of destination for each portion of the fuel.
E. Each terminal operator shall post a conspicuous notice proximately located to the point of receipt of shipping papers by transport truck operators, which notice shall describe in clear and concise terms the duties of the transport operator and retail dealer under Section 45 of this act, provided that the Commission may by rule or notice establish the language, type, style and format of the notice.
F. A person who knowingly violates or knowingly aids and abets another to violate this section with the intent to evade the tax levied by this act shall be guilty of a misdemeanor and shall, upon conviction, be fined not more than One Thousand Dollars ($1,000.00), or be sentenced to a term of not more than one (1) year in the county jail, or shall be punishable by both such fine and imprisonment.
Added by Laws 1996, c. 345, § 44, eff. Oct. 1, 1996.
§68-500.45. Transporters to carry and follow information in shipping documents - Shipping documents to be provided to certain outlets - Retention of shipping documents - Acceptance of delivery without shipping documents prohibited - Penalties.
A. Each person transporting motor fuel in a fuel transportation vehicle upon the public highways of this state shall:
1. Carry on board the shipping document issued by the terminal operator or the bulk plant operator of the facility where the motor fuel was obtained, whether within or without this state. The shipping paper shall set out on its face the state of destination of the motor fuel transported in the vehicle as represented to the terminal operator at the time the fuel transportation vehicle was loaded, or as otherwise provided in paragraph 3 of this subsection;
2. Show and permit duplication of the shipping document by a law enforcement officer, or representative of the Commission, upon request, when transporting, holding or off-loading the motor fuel described in the shipping document;
3. Deliver motor fuel described in the shipping document to a point in the destination state shown on the face of the document unless the person or the agent of the person does all of the following:
a. notifies the Commission before the earlier of removal from the state in which the shipment originated, or the initiation of delivery, that the person received instructions after the shipping document was issued to deliver the motor fuel to a different destination state,
b. receives from the Commission a verification number authorizing the diversion, and
c. writes on the shipping document the change in destination state and the verification number for the diversion;
4. Provide a copy of the shipping document to the distributor or other person who controls the facility to which the motor fuel is delivered;
5. Meet such other conditions as the Commission may reasonably require for the enforcement of this act.
The Commission shall provide by regulation for handwritten designations and alternative procedures for operators of tank wagons that have received motor fuel at a bulk plant for delivery within or without this state.
B. Every person transporting motor fuel in vehicles upon the public highways of this state shall provide the original or a copy of the terminal-issued shipping document accompanying the shipment to the operator of the retail outlet, bulk plant or bulk end user bulk storage facility to which delivery of the shipment was made.
C. Each operator of a motor fuel retail outlet, bulk plant or bulk end user bulk storage facility shall receive, examine, and retain for a period of thirty (30) days at the delivery location the terminal-issued shipping document received from the transporter for every shipment of motor fuel that is delivered to that location with record retention of the shipping paper of three (3) years required off-site. If the delivery location is an unattended location, the operator may retain the shipping documents at the normal billing address of the operator.
D. No retail dealer, bulk plant operator, wholesale distributor or bulk end user shall knowingly accept delivery of motor fuel into bulk storage facilities in this state if that delivery is not accompanied by a shipping paper issued by the terminal operator, or bulk plant operator as provided by regulations, that sets out on its face this state as the state of destination of the motor fuel or a diversion verification number pursuant to Section 46 of this act, and such other information as is required under Sections 49 and 50 of this act.
E. Any person who knowingly violates or knowingly aids and abets another to violate subsection B or D of this section shall be guilty of a misdemeanor and shall, upon conviction, be fined not more than One Thousand Dollars ($1,000.00), or shall be sentenced to a term of not more than one (1) year in the county jail, or shall be punishable by both such fine and imprisonment.
Added by Laws 1996, c. 345, § 45, eff. Oct. 1, 1996.
§68-500.46. Legitimate diversions or erroneous information on shipping paper - Relief.
A. The Commission shall promulgate rules for relief in a case where a shipment of motor fuel is legitimately diverted from the represented destination state after the shipping paper has been issued by the terminal operator or where the terminal operator failed to cause proper information to be printed on the shipping paper.
B. The relief rules shall include a provision requiring that the shipper, the transporter, or an agent of either provide notification before the diversion or correction to the Commission if an intended diversion or correction is to occur, that a verification number be assigned and manually added to the face of the terminal-issued shipping paper, and the relief provision shall be consistent with the refund provisions of this act, including Section 21 of this act.
C. The relief provisions shall establish a protest procedure so that any person found to be in violation of Section 44 and subsection C of Section 45 of this act may establish a defense to any civil penalty imposed under this act for violation of such section or sections upon establishing substantial evidence satisfactory to the Commission that the violation was the result of honest error made in the context of a good faith and reasonable effort to properly account for and report fuel shipments and taxes.
D. The Commission shall make reasonable efforts to coordinate with neighboring states and the Federation of Tax Administrators for the operation of common telephonic diversion verification number assignment system including the shared burdens thereof.
Added by Laws 1996, c. 345, § 46, eff. Oct. 1, 1996.
§68-500.47. Reliance on certain representations.
The supplier and the terminal operator shall be entitled to rely for all purposes of this act on the representation by the transporter, the shipper or the agent of the shipper as to the intended state of destination and tax-exempt use of the shipper. The shipper, importer, transporter, agent of the shipper and any purchaser, not the supplier or terminal operator, shall be jointly liable for any tax otherwise due to the state as a result of a diversion of the motor fuel from the represented destination state. A terminal operator shall be entitled to rely on the representation of a licensed supplier with respect to the obligation of the supplier to precollect tax and the related shipping paper representation to be as shown on the shipping paper as provided by subsection A of Section 44 of this act.
Added by Laws 1996, c. 345, § 47, eff. Oct. 1, 1996.
§68-500.48. Sale or delivery of motor fuel without payment of taxes prohibited - Exceptions - Penalties.
A. Except as expressly provided in subsection B of this section, no person shall sell, use, deliver, or store in this state, or import for sale, use, delivery or storage in this state, motor fuel as to which the tax imposed by Section 4 of this act has not been previously paid to or accrued by either a licensed supplier, or permissive supplier, at the time of removal from a terminal, or a licensed importer provided all the conditions of Section 50 of this act applicable to lawful import by the importer shall have been met.
B. The provisions of subsection A of this section shall not apply to:
1. A supplier with respect to motor fuel held within the bulk transfer/terminal system in this state which was manufactured in this state or imported into this state in a bulk transfer;
2. A consumer with respect to motor fuel placed in the vehicle supply tank of that person outside of this state;
3. Diesel fuel dyed in accordance with paragraph 16 of Section 10 of this act;
4. Motor fuel in the process of exportation by a supplier or a licensed exporter in accordance with the shipping papers required by Section 45 of this act and a statement meeting the requirements of paragraph 2 of subsection A of Section 49 of this act is shown on the shipping papers;
5. Gasoline, diesel fuel and kerosene used in aircraft subject to the conditions and exceptions in paragraph 9 of Section 10 of this act;
6. Fuel in possession of a consumer as to which a refund has been issued;
7. Government and other exempt fuel under paragraphs 5, 6 and 7 of Section 10 of this act; or
8. A licensed importer who has met the conditions of Section 49 of this act.
C. A person who violates this section shall be guilty of a misdemeanor and shall, upon conviction, be fined not more than One Thousand Dollars ($1,000.00), or be sentenced to a term of not more than one (1) year in the county jail, or shall be punishable by both such fine and imprisonment and shall be subject to the provisions of Section 59 of this act.
Added by Laws 1996, c. 345, § 48, eff. Oct. 1, 1996.
§68-500.49. Operation of transport truck without shipping paper prohibited - Violation occurs upon boarding - Advance notification - Penalties - Seizure.
A. Except as provided in subsections C and D of this section, no person shall operate a transport truck that is engaged in the shipment of motor fuel on the public highways of this state without having on board a terminal-issued shipping paper bearing, in addition to the requirements of subsection A of Section 45 of this act, a notation indicating that, with respect to diesel fuel acquired under claim of exempt use, a statement indicating the fuel is "DYED DIESEL FUEL, NONTAXABLE USE ONLY, PENALTY FOR TAXABLE USE" for the load or the appropriate portion of the load.
B. A person is in violation of subsection A of this section upon boarding the vehicle with a shipping paper which does not meet the requirements set forth in this section.
C. The Commission may in its discretion provide an advance notification procedure with respect to documentation for imported motor fuel as to which the importer is unable to obtain terminal-issued shipping papers which comply with this section.
D. Any person who knowingly violates any part of this section shall be guilty of a misdemeanor and shall, upon conviction, be fined not more than One Thousand Dollars ($1,000.00), or be sentenced to a term of not more than six (6) months in the county jail, or shall be punishable by both such fine and imprisonment.
E. The Commission, its appointee, or representative may seize, confiscate and dispose of any motor fuel which should be accompanied by a shipping paper meeting the requirements of this section which is not accompanied by the required shipping paper.
Added by Laws 1996, c. 345, § 49, eff. Oct. 1, 1996.
§68-500.50. Conditions for importers prior to bringing undyed and untaxed fuel into state - Penalties - Seizure.
A. In the event that an importer acquires motor fuel destined for this state which has neither been dyed in accordance with the Internal Revenue Code and the regulations issued thereunder, nor tax paid to or accrued by the supplier at the time of removal from the out-of-state terminal, any licensed importer and transporter operating on behalf of the licensed importer shall meet all of the following conditions prior to entering motor fuel onto the highways of this state by loaded transport truck:
1. The importer or the transporter shall have obtained an import verification number from the Commission not sooner than twenty-four (24) hours prior to entering this state;
2. The import verification number shall have been set out prominently and indelibly on the face of each copy of the terminal-issued shipping paper carried on board the transport truck;
3. The terminal origin and the name and address of the importer shall also be set out prominently on the face of each copy of the terminal-issued shipping paper;
4. The terminal-issued shipping paper data otherwise required by this act shall be present; and
5. All tax imposed by this act with respect to previously requested import verification number activity on the account of the importer or the transporter shall have been timely precollected and remitted.
B. Any person who knowingly violates or knowingly aids and abets another to violate this provision shall be guilty of a misdemeanor and shall, upon conviction, be fined not more than One Thousand Dollars ($1,000.00), or be sentenced to a term of not more than one (1) year in the county jail, or shall be punishable by both such fine and imprisonment and shall be subject to the provisions of Section 59 of this act.
C. The Commission, its appointee, or representative may seize, confiscate and dispose of any motor fuel which should be accompanied by a shipping paper meeting the requirement of this section which is not accompanied by the required shipping paper.
Added by Laws 1996, c. 345, § 50, eff. Oct. 1, 1996.
§68-500.51. Export of motor fuel without license prohibited - Exemption - Penalties.
A. No person shall export motor fuel from this state unless that person has obtained an exporter's license or a supplier's license and can demonstrate proof of export in the form of a destination state bill of lading.
B. A consumer which exports fuel in a vehicle fuel supply tank incident to interstate transportation shall be exempt from this section.
C. Any person who knowingly violates or knowingly aids and abets another to violate this provision with the intent to evade the tax levied by this act shall be guilty of a misdemeanor and shall, upon conviction, be fined not more than One Thousand Dollars ($1,000.00), or be sentenced to a term of not more than one (1) year in the county jail, or shall be punishable by both such fine and imprisonment.
Added by Laws 1996, c. 345, § 51, eff. Oct. 1, 1996.
§68-500.52. Use of dyed fuel on public highways prohibited - Exceptions - Penalties.
A. No person shall operate or maintain a motor vehicle on any public highway in this state with motor fuel contained in the fuel supply tank for the motor vehicle that contains dye as provided under paragraph 16 of Section 10 of this act.
B. This section does not apply to:
1. Persons operating motor vehicles that have received fuel into their fuel tanks outside of this state in a jurisdiction that permits introduction of dyed motor fuel of that color and type into the motor fuel tank of highway vehicles; or
2. Uses of dyed fuel on the highway which are lawful under the Internal Revenue Code and regulations thereunder and as set forth in Section 10 of this act unless otherwise prohibited by this act.
C. Any person who knowingly violates or knowingly aids and abets another to violate the provisions of this section with the intent to evade the tax levied by this act shall be guilty of a misdemeanor and shall, upon conviction, be fined not more than One Thousand Dollars ($1,000.00), or be sentenced to a term of not more than one (1) year in the county jail, or shall be punishable by both such fine and imprisonment.
Added by Laws 1996, c. 345, § 52, eff. Oct. 1, 1996.
§68-500.53. Failure to obtain required licenses - Penalties.
No person shall engage in any business activity in this state as to which a license is required by this act unless the person shall have first obtained the license. Any person who negligently violates this section is subject to a civil penalty in the amount of One Thousand Dollars ($1,000.00). Any person who knowingly violates or knowingly aids and abets another to violate this section with the intent to evade the tax levied by this act shall be guilty of a misdemeanor and shall, upon conviction, be fined not more than One Thousand Dollars ($1,000.00), or be sentenced to a term of not more than one (1) year in the county jail, or shall be punishable by both such fine and imprisonment.
Added by Laws 1996, c. 345, § 53, eff. Oct. 1, 1996.
§68-500.54. Certain statements on shipping papers prohibited.
A. No terminal operator shall imprint, and no supplier shall knowingly permit a terminal operator to imprint on behalf of the supplier, any statement on a shipping paper relating to motor fuel to be delivered to this state or to a state having substantially the same shipping paper legending requirements with respect to:
1. Any responsibility of the supplier or liability for payment of the tax imposed by this act; or
2. The tax-paid or tax-collected status of any motor fuel unless the supplier or representative of the supplier shall have first provided the terminal operator with a representation or direction to make the statement on behalf of the supplier.
B. Any terminal operator who shall knowingly imprint any statement in violation of this section shall be jointly and severally liable for all the taxes levied by this act which are not collected by this state as a result of such actions.
C. Any supplier who knowingly violates this section shall be jointly and severally liable with the terminal operator.
Added by Laws 1996, c. 345, § 54, eff. Oct. 1, 1996.
§68-500.55. Notice to be provided and posted with dyed diesel fuel.
A notice stating "DYED DIESEL FUEL, NONTAXABLE USE ONLY, PENALTY FOR TAXABLE USE" shall be:
1. Provided by the terminal operator to any person that receives dyed diesel fuel at a terminal rack of that terminal operator;
2. Provided by any seller of dyed diesel fuel to its buyer if the diesel fuel is located outside the bulk transfer/terminal system and is not sold from a retail pump posted in accordance with the requirements of paragraph 3 of this section; and
3. Posted by a seller on any retail pump where it sells dyed diesel fuel for use by its buyer.
The form of notice required under paragraphs 1 and 2 of this section shall be provided by the time of the removal or sale and shall appear on shipping papers, bills of lading, and invoices accompanying the sale or removal of the dyed diesel fuel.
Added by Laws 1996, c. 345, § 55, eff. Oct. 1, 1996.
§68-500.56. Shipping papers to meet tamper-resistant standards.
Each terminal operator in this state and every supplier licensed by this state for the collection of tax on motor fuel shall cause terminal-issued shipping papers to meet such tamper-resistant standards as the Commission may by regulation require including, but not limited to messages which identify whether shipping papers have been photocopied, numbering systems, nonreproducible coding and other devices. However, the Commission may not make any such regulations effective earlier than twenty-four (24) months after the promulgation of a final regulation imposing the requirements.
Added by Laws 1996, c. 345, § 56, eff. Oct. 1, 1996.
§68-500.57. Sale or use of dyed diesel fuel for taxable purpose - Evasion of tax or altering dye in diesel fuel - Joint and several liability of certain entities, officers and employees.
A. No person shall sell or hold for sale dyed diesel fuel for any use that the person knows or has reason to know is not a nontaxable use of the diesel fuel.
B. No person shall use or hold for use any dyed diesel fuel for a use other than a nontaxable use and the person knew or had reason to know that the diesel fuel was so dyed.
C. No person shall willfully, with intent to evade tax, alter or attempt to alter the strength or composition of any dye or marker in any dyed diesel fuel.
D. Any business entity, each officer, employee, or agent of the entity who willfully participates in any act in violation of this section shall be jointly and severally liable with the entity for the penalty which shall be the same as imposed pursuant to 26 U.S.C., Section 6714.
Added by Laws 1996, c. 345, § 57, eff. Oct. 1, 1996.
§68-500.58. Failure to precollect or timely remit tax - Fraudulent returns - Operation of motor vehicle in violation of act - Transporting motor fuel without adequate shipping papers - Terminal operators failing to meet shipping paper requirements - Penalties.
A. A supplier, permissive supplier, or importer who knowingly fails to precollect or timely remit tax otherwise required to be paid over to the Commission pursuant to Section 500.18 or 500.20 of this title, or pursuant to a tax precollection agreement under Section 500.19 of this title shall be liable for the uncollected tax plus the appropriate penalties as set forth in Section 217 of this title.
B. If any person liable for the tax under this act files a false or fraudulent return with the intent to evade the tax, then fifty percent (50%) of the total amount of any deficiency, in addition to the deficiency, including interest as provided in Section 217 of this title, shall be added, collected and paid.
C. Any person operating a motor vehicle in violation of Section 500.45, 500.49 or 500.50 of this title shall be guilty of a misdemeanor for the first offense and shall, upon conviction, be fined not more than Five Hundred Dollars ($500.00), or shall be sentenced to a term of not more than six (6) months in the county jail, or shall be punishable by both such fine and imprisonment. For the second and each subsequent offense, violators shall be guilty of a misdemeanor and shall, upon conviction, be fined not more than One Thousand Dollars ($1,000.00), or shall be sentenced to a term of not more than one (1) year in the county jail, or shall be punishable by both such fine and imprisonment.
D. The Commission shall impose a civil penalty of One Thousand Dollars ($1,000.00) for the first occurrence of transporting motor fuel without adequate shipping papers annotated as required under Section 500.45, 500.49 or 500.50 of this title. Each subsequent occurrence described in this subsection is subject to a civil penalty of Five Thousand Dollars ($5,000.00).
E. The Commission may impose a civil penalty against every terminal operator that fails to meet shipping paper issuance requirements under Sections 500.21, 500.44 and 500.55 of this title. The civil penalty imposed on the terminal operator shall be the same as the civil penalty imposed under subsection D of this section.
Added by Laws 1996, c. 345, § 58, eff. Oct. 1, 1996. Amended by Laws 2002, c. 460, § 38, eff. Nov. 1, 2002.
§68-500.59. Impoundment, seizure and sale of vehicle and cargo upon violation of shipping paper requirements - Presumption.
If a person is found operating a motor vehicle in violation of the shipping paper requirements in Sections 45, 49, 50 and 55 of this act, the vehicle and its cargo is subject to impoundment, seizure, and subsequent sale and forfeiture, in accordance with the general laws of this state respecting seizure and forfeiture. The failure of the operator of a motor vehicle to have on board, when loaded, the proper shipping papers with a destination state machine-printed on its face pursuant to Section 45 of this act or which fails to meet the descriptive annotation requirements of Sections 49, 50 and 56 of this act, if applicable, shall be presumptive evidence of a violation sufficient to warrant impoundment and seizure of the vehicle and its cargo.
Added by Laws 1996, c. 345, § 59, eff. Oct. 1, 1996.
§68-500.60. Inspections.
A. The Commission, or its appointees, including federal government employees or persons operating under contract with the state, upon presenting appropriate credentials may conduct inspections and remove samples of fuel to determine coloration of diesel fuel, or to identify shipping paper violations at any place where taxable fuel is or may be produced, stored or loaded into transport vehicles. Inspections shall be performed in a reasonable manner consistent with the circumstances, but in no event is prior notice required. Inspectors may physically inspect, examine or otherwise search any tank, reservoir, or other container that can or might be used for the production, storage, or transportation of fuel. Inspection may be made of any equipment used for, or in connection with, the production, storage, or transportation of fuel. Inspectors may demand to be produced for immediate inspection the shipping papers, documents and records required to be kept by a person transporting fuel. The places which may be inspected pursuant to this section may include, but are not limited to:
1. A terminal;
2. A fuel storage facility that is not a terminal;
3. A retail fuel facility;
4. Highway rest stops; or
5. A designated inspection site. For purposes of this section, a "designated inspection site" means any state highway or waterway inspection station, weigh station, agricultural inspection station, mobile station, or other location designated by the Commission either fixed or mobile.
B. Inspections to determine violations under this act may be conducted by the Department of Public Safety, agents of the Commission, Oklahoma Corporation Commission, motor carrier inspectors in this state in addition to their duties otherwise defined, and any other law enforcement officer through procedures established by the Commission. Agents of the Commission have the same power and authority provided to authorized personnel under the applicable statute.
C. Inspectors may reasonably detain any person or equipment transporting fuel in or through this state for the purpose of determining whether the person is operating in compliance with the provisions of this act and any rules promulgated pursuant to this act. Detainment may continue for such time only as is necessary to determine whether the person is in compliance.
Added by Laws 1996, c. 345, § 60, eff. Oct. 1, 1996.
§68-500.61. Audits and examinations - Penalties.
A. The Commission or any authorized deputy, employee, or agent is authorized to audit and examine the records, books, papers, and equipment of terminal suppliers, importers, wholesalers, jobbers, retail dealers, terminal operators, fuel vendors and all private and common carriers of motor fuel to verify the completeness, truth and accuracy of any statement or report and ascertain whether or not the tax imposed by this act has been paid.
B. The Commission shall have the same general authority provided under subsection A of this section with respect to narrow transportation sampling audits. However, all fuel vendors and bulk purchasers of fuel shall make available to the Commission necessary records with respect to such transaction(s) which the Commission is attempting to verify during normal business hours at the physical location of the person in this state, or at the offices of the Commission if the location at which the records are located is outside of this state, within three (3) business days after request.
C. The Commission or any appointee, including federal government employees and persons contracting with the state, may, upon proof of credentials shown, in the aggregate referred to for purposes of this section as fuel inspectors, inspect and each fuel vendor, motor fuel transporter or bulk purchaser shall disclose, immediately upon request, any shipping paper required by this act to be maintained at the physical location where the request is made which may include any place motor fuel is stored or held for sale or transportation.
D. Any person who shall refuse to permit any inspection or audit authorized by this act shall be subject to a civil penalty of Five Thousand Dollars ($5,000.00) in addition to any penalty imposed by any other provision of this act.
E. Any person who refuses, for the purpose of evading tax, to allow an inspection shall, in addition to being liable for any other penalties imposed by this act, be guilty of a misdemeanor and shall, upon conviction, be fined not more than One Thousand Dollars ($1,000.00), or be sentenced to a term of not more than one (1) year in the county jail, or shall be punishable by both such fine and imprisonment.
Added by Laws 1996, c. 345, § 61, eff. Oct. 1, 1996.
§68-500.62. Taxation of motor fuel inventory not taxed under predecessor statutes.
The tax imposed by Section 4 of this act shall be applicable to all nonexempt inventory held by any person outside of the bulk transfer system in this state in quantities which, in the aggregate with respect to such person, exceed one thousand (1,000) gallons, to the extent the inventory has not previously been subject to the tax imposed by this state under the predecessor motor fuel tax statute. However, no tax shall be payable with respect to motor fuel which is dyed diesel fuel or held by an exempt user. The inventory tax imposed on inventory held outside of the bulk transfer system on the effective date of this act reportable under this section shall be payable in two equal annual installments beginning twelve (12) months after the effective date of this act.
Added by Laws 1996, c. 345, § 62, eff. Oct. 1, 1996.
§68-500.63. Sale of motor fuels by Indian tribes.
A. The Legislature hereby finds:
1. Some Indian tribes within the State of Oklahoma are engaged in the retail sales of motor fuels at locations within their sovereign territories;
2. Both Indian tribes and the government of the State of Oklahoma impose motor fuel taxes;
3. By reason of the ruling of the United States Supreme Court in "Oklahoma Tax Commission v. Chickasaw Nation", 115 S.Ct. 2214 (1995), the State of Oklahoma does not now collect state motor fuel taxes on sales made by Indian tribes. The Legislature hereby acknowledges that, as a matter of federal law, the existing law of the state may not be used to levy or enforce taxes on certain sales of motor fuel made by Indian tribes;
4. It is mutually beneficial to the State of Oklahoma and the federally recognized Indian tribes of this state, exercising their sovereign powers, to enter into contracts as set forth in subsection B of this section, for the purpose of limiting litigation on the issue of state government taxation of motor fuel sales made by Indian tribes. It is in the interest of this state to resolve disputes between the state and federally recognized Indian tribes on this issue by entering into contracts under which the Indian tribes are in part compensated for any tribal motor fuel tax revenues the Indian tribes might lose by reason of the adoption and enforcement of this act. Such mutually beneficial agreements allow both the State of Oklahoma and the Indian tribes to benefit from tax revenues from sales of motor fuel on Indian country.
B. In lieu of the refund procedure provided in subsection E of Section 14 of this act for the exemption provided for sales of motor fuels by an Indian tribe to its tribal members as provided in paragraph 10 of Section 10 of this act, an Indian tribe, on its behalf and on behalf of its members, may elect to enter into a contract with the State of Oklahoma as provided in subsection C of this section.
C. The State of Oklahoma hereby makes the following offer to all federally recognized Indian tribes within this state which, if accepted, will constitute a contract between this state and the accepting tribe or tribes:
1. The accepting tribe shall agree that it will not challenge the constitutionality of this act or the application of this act to motor fuel sales on Indian country in any court or tribunal and shall include all state motor fuel taxes and assessments in the price of its motor fuel sales, including but not limited to sales to tribal members on tribal land. The accepting tribe shall agree as a material term of its agreement to abide with all parts of this act in its entirety and shall agree not to procure, or attempt to procure, motor fuel for sale in Indian country on which the tax imposed by this act has not been precollected as provided for herein;
2. In consideration of this agreement by the tribe or tribes, the State of Oklahoma, through the Oklahoma Tax Commission, shall withhold a percentage of its motor fuel tax revenues, as specified in paragraph 3 of this subsection, which shall be apportioned quarterly to the accepting Indian tribes. The funds apportioned as provided herein are deemed to be in lieu of tribal tax revenues that the tribes would otherwise have collected on sales of motor fuels. The first such apportionment shall be made not later than February 1, 1997, which shall be for motor fuels taxes received by the Tax Commission during the last calendar quarter of 1996, and subsequent apportionments shall be made no later than thirty (30) days after the end of each calendar quarter thereafter. The first such apportionment shall be made to all tribes which have elected and accepted the terms of the contract specified in this subsection before October 1, 1996. Any tribe electing and accepting the terms of the contract specified in this subsection on or after October 1, 1996, shall be eligible to receive quarterly apportionments beginning with the calendar quarter following such election;
3. The percentage of state motor fuel tax and assessment revenues collected pursuant to the provisions of this act which shall be withheld monthly and apportioned quarterly to accepting Indian tribes shall be as follows:
a. for the portion of the fiscal year beginning July 1, 1996, for which this act is effective, three percent (3%),
b. for the fiscal year beginning July 1, 1997, four percent (4%), and
c. for the fiscal year beginning July 1, 1998, and for each fiscal year thereafter, four and one-half percent (4 1/2%);
4. The funds withheld by the Oklahoma Tax Commission pursuant to paragraph 3 of this subsection shall be apportioned quarterly to each accepting Indian tribe as follows:
a. each accepting Indian tribe shall receive a base quarterly sum of Six Thousand Two Hundred Fifty Dollars ($6,250.00). If the gross state motor fuel tax revenues collected do not exceed One Hundred Million Dollars ($100,000,000.00) in any fiscal year, the provisions of this subparagraph shall not be applicable,
b. to those tribes who were engaged in the sales of motor fuels during the fourth calendar quarter of the calendar year 1996:
(1) for the fiscal year beginning July 1, 1996, an amount equal to ten cents ($0.10) per gallon of motor fuels sold by such tribe during the fourth calendar quarter of 1996,
(2) for the fiscal year beginning July 1, 1997, an amount equal to eight cents ($0.08) per gallon of motor fuels sold by such tribe during the fourth calendar quarter of 1996,
(3) for the fiscal year beginning July 1, 1998, an amount equal to six cents ($0.06) per gallon of motor fuels sold by such tribe during the fourth calendar quarter of 1996,
(4) for the fiscal year beginning July 1, 1999, an amount equal to four cents ($0.04) per gallon of motor fuels sold by such tribe during the fourth calendar quarter of 1996, and
(5) for the fiscal year beginning July 1, 2000, and thereafter for the duration of the contract, an amount equal to two cents ($0.02) per gallon of motor fuels sold by such tribe during the fourth calendar quarter of 1996, and
c. after determination of amounts to be apportioned pursuant to subparagraphs a and b of this paragraph, the remainder shall be apportioned according to the proportion the accepting Indian tribe's total Oklahoma resident membership bears to the total Oklahoma tribal resident membership of all accepting Indian tribes;
5. The funds withheld by the Oklahoma Tax Commission and apportioned quarterly pursuant to the provisions of this section shall be used by the accepting tribe exclusively for tribal government programs limited to highway and bridge construction, health, education, corrections, and law enforcement;
6. In the event, at any time during a calendar quarter, an accepting tribe selling motor fuel fails to procure, for whatever reason, motor fuel for sale in Indian country on which the tax imposed by this act has been precollected as provided in this act, or fails, for whatever reason, to include all state motor fuel taxes and assessments in the price of its motor fuels sales including, but not limited to, sales to tribal members on Indian country, the tribe shall not be eligible to receive an apportionment under this section for that calendar quarter. In such instances, the Tax Commission shall notify the tribe that its apportionment shall be withheld and the reasons therefor. The tribe shall have six (6) months from the date of issuance of the notice under this paragraph to file a legal action contesting the decision of the state to withhold its apportionment. The amount withheld from the tribe pursuant to the provisions of this paragraph shall not be apportioned and shall be withheld from all tribes until the expiration of the six-month limitation period and during the pendency of any legal action filed pursuant to this paragraph.
7. Each tribe shall provide to the Oklahoma Tax Commission an audit of its tribal membership or citizenship rolls certified by a certified public accountant showing the correct number of its respective tribal members by blood, excluding members of bands, tribal towns and other tribes or affiliates which may be included on its rolls but who are ineligible for tribal services and benefits. Only tribal members who reside within the State of Oklahoma shall be included in the audit. Citizens of tribal towns, bands of Indians and tribes who are also counted in the audits as members of another tribe participating in the contract provided for in this section and eligible to receive services from the tribe shall not be eligible to also participate under this section. Any tribal member who is also a member of another tribe may only be counted once for purposes of determining tribal membership. Those tribes who were engaged in the sales of motor fuels during the fourth calendar quarter of calendar year 1996 shall also provide certified audited reports on or before January 10, 1997, showing the quantity of motor fuels sold by them during that period. For all tribes electing to accept the terms of the contract specified in this subsection before October 1, 1996, the membership audit report shall be submitted on or before October 1, 1996, and not later than July 1 of each year thereafter. The information provided shall be the basis from which the Oklahoma Tax Commission shall calculate the distribution of the funds withheld pursuant to the provisions of this section. The State of Oklahoma shall be absolved of any liability if the information submitted pursuant to the provisions of this section is not correct. If such information is not submitted by an accepting or participating tribe by October 1, 1996, or in subsequent years by July 1, the Tax Commission shall calculate the distribution of the funds on the basis of the information previously submitted by that tribe. Notwithstanding the provisions of Section 205 of Title 68 of the Oklahoma Statutes, copies of the audits and reports shall be made available to any requesting participating tribes;
8. Acceptance of the offer contained in this section shall be made in writing to the Oklahoma Tax Commission, signed by the chief executive officer of the tribal government, stating that the tribe accepts, without condition, the terms of this section, and for the sole purpose of resolving disputes arising out of a contract entered into pursuant to the provisions of this section, the tribe waives its immunity from suit and liability in state and federal court. In addition, proof of adoption of an ordinance or resolution by the governing body of the tribe accepting without condition the terms of this section, and an effective waiver of its immunity, as specified herein, shall be required. Notwithstanding the enactment of any future legislation on this topic, the term of the contract created by the acceptance of this offer shall extend through and include fiscal year 2016 and shall be renewed for successive ten-year terms unless a tribe notifies the State of Oklahoma of its intention not to participate further or the State of Oklahoma notifies the tribe of its intent not to participate further. Notification by the tribe shall be made in the same manner as required by this paragraph for acceptance of the offer to participate in the contract. Notification by the state shall be made by the Governor in writing to the tribe, and such notification shall be filed with the Secretary of State;
9. The State of Oklahoma hereby waives its immunities from suit granted by the Eleventh Amendment to the Constitution of the United States for the sole purpose of resolving disputes arising out of a contract entered into pursuant to the provisions of this section;
10. Both the State of Oklahoma and the accepting Indian tribe recognize, respect and accept the fact that under applicable laws each is a sovereign with dominion over their respective territories and governments. By entering into this proposed intergovernmental contractual relationship, neither the state nor the tribe has, in any way, caused the other's sovereignty to be diminished;
11. Members of accepting tribes shall not be individually eligible for the exemption provided in paragraph 10 of Section 10 of this act. Apportionment of funds to accepting tribes pursuant to the provisions of paragraph 4 of this subsection are in part in lieu of the refunds to individual tribal members as provided in paragraph 10 of Section 10 of this act. Indian tribes shall continue to be eligible for the tribal government exemption provided in paragraph 7 of Section 10 of this act;
12. A tribe accepting the offer contained in this section agrees to hold the state harmless from suit by its individual tribal members and further agrees that, if a final judgment is rendered against the state pursuant to such a suit, that the tribe will reimburse the state for the amount of any such judgment paid and any costs incurred by the state pursuant to such suit. If a tribe fails to make such reimbursement within ninety (90) days of demand by the Oklahoma Tax Commission, the state shall withhold such amount from the apportionment of funds to the tribe pursuant to the provisions of paragraph 4 of this subsection; and
13. A tribe accepting the offer contained in this section agrees not to license or otherwise authorize an individual tribal member or other person or entity to make sales of motor fuel in violation of the terms of the contract.
Added by Laws 1996, c. 345, § 63, eff. Oct. 1, 1996.
§68-501. Repealed by Laws 1996, c. 345, § 67, eff. Oct. 1, 1996.
§68-502. Repealed by Laws 1996, c. 345, § 67, eff. Oct. 1, 1996.
§68-502.1. Repealed by Laws 1996, c. 345, § 67, eff. Oct. 1, 1996.
§68-502.2. Repealed by Laws 1996, c. 345, § 67, eff. Oct. 1, 1996.
§68-502.3. Repealed by Laws 1996, c. 345, § 67, eff. Oct. 1, 1996.
§68-502.4. Repealed by Laws 1996, c. 345, § 67, eff. Oct. 1, 1996.
§68-502.5. Repealed by Laws 1996, c. 345, § 67, eff. Oct. 1, 1996.
§68-502.6. Repealed by Laws 1996, c. 345, § 67, eff. Oct. 1, 1996.
§68-502.7. Repealed by Laws 1996, c. 345, § 67, eff. Oct. 1, 1996.
§68-504. Repealed by Laws 1996, c. 345, § 67, eff. Oct. 1, 1996.
§68-504.1. Repealed by Laws 1996, c. 345, § 67, eff. Oct. 1, 1996.
§68-505. Repealed by Laws 1996, c. 345, § 67, eff. Oct. 1, 1996.
§68-506. Repealed by Laws 1996, c. 345, § 67, eff. Oct. 1, 1996.
§68-507. Repealed by Laws 1996, c. 345, § 67, eff. Oct. 1, 1996.
§68-508. Repealed by Laws 1996, c. 345, § 67, eff. Oct. 1, 1996.
§68-509. Repealed by Laws 1996, c. 345, § 67, eff. Oct. 1, 1996.
§68-509.1. Repealed by Laws 1993, c. 146, § 29.
§68-509.2. Exempt diesel fuel - Fuel used for purposes other than to operate motor vehicles on public highways.
A. The tax levied by this act shall not apply to diesel fuel used exclusively for purposes other than to operate motor vehicles on the public highways of this state. Provided that distributors shall execute on monthly reports, certification that the purchasers represented to the seller that the diesel fuel was to be used exclusively for purposes other than to operate motor vehicles on the public highways.
B. Every person, firm, corporation, partnership or limited liability company claiming an exemption under the provisions of this section shall first obtain an annual fuel tax exemption permit from the Tax Commission by filing a verified application on a form furnished by the Tax Commission. Each fuel tax exemption permit holder must furnish a copy of the permit to a supplier prior to purchasing diesel fuel. Suppliers selling to permit holders must maintain a record of each sale to a permit holder and shall report the total gallons of tax-exempt diesel fuel sold during a calendar month on a form prescribed by the Tax Commission. Said form will include a listing of the total gallons sold to each permit holder, by name and exemption number. The supplier shall furnish each permit holder a copy of its tax-exempt sales for the calendar month. The supplier and permit holder shall maintain these records for three (3) years. Any supplier selling diesel fuel that is exempt under this section may deduct the number of gallons of such diesel fuel from the total gallonage required to be reported to the Tax Commission only if prescribed forms listing the tax-exempt sales are attached to the report required by the Tax Commission. A supplier shall not deduct from the required report the sale of diesel fuel made by any other distributor. All fuel tax exemption permits expire on the 30th day of June of each year and no exemption shall be allowed to the holder thereof after September 30 of that year. Provided, the Tax Commission may exempt such purchases after September 30 upon verifying that the fuel was actually used in accordance with the exemption provisions of this section.
C. Any person who places diesel fuel that was purchased under an exemption permit authorized by this section into the fuel tank of a motor vehicle for use in operating the motor vehicle on the public highways shall be liable for the taxes levied under Sections 502.1, 502.3, 502.5, 502.7 and 522.1 of this title. Further, the permit issued shall be subject to cancellation and if so canceled shall not be reissued for a period of at least one (1) year. Such person shall also be guilty of a misdemeanor and shall, upon conviction, be fined not more than One Thousand Dollars ($1,000.00), or shall be sentenced to a term of not more than one (1) year in the county jail.
The Tax Commission shall conduct field audits and investigate the uses for which the holder of an off-road exemption permit has made of diesel fuel acquired by him under his permit. Upon a determination that the permit holder has improperly used the diesel fuel purchased, the Tax Commission shall issue a proposed assessment against the permit holder, in accordance with Section 221 of this title, for the diesel fuel taxes levied under this article.
D. The tax levied by Sections 502.1 and 522.1 of this title shall not apply to diesel fuel used exclusively in road machinery and equipment built for and being used on location in the construction, repair or maintenance of public highways, roads and bridges by road contractors and by counties, cities and towns of this state. However, this exemption shall not apply to automobiles or truck-type vehicles such as dump trucks, flatbed trucks and pickup trucks.
E. The tax levied by Sections 502.1 and 522.1 of this title shall not apply to diesel fuel used exclusively in passenger motor buses or coaches, having a seating capacity of ten or more persons, when such fuel is purchased by and used exclusively in public transit systems operated by any county, city or town of this state, or by any public trust created under the laws of this state of which a county, city or town of this state is the sole beneficiary thereof. Provided this exemption shall be allowed only when supported by a certificate executed by such city or trust on forms prescribed and furnished by the Oklahoma Tax Commission.
F. The tax levied by Sections 502.1 and 522.1 of this title shall not apply to diesel fuel purchased by any county, city or town for use as fuel to propel motor vehicles on the public roads and highways of this state, when said vehicles are being operated for the sole benefit of said county, city or town; provided that if the diesel fuel is placed directly into the fuel supply tank or tanks of the motor vehicle by the supplier, certification must be made on the invoice and all such sales must be reported by the supplier on forms furnished by the Oklahoma Tax Commission.
Added by Laws 1993, c. 146, § 18.
§68-510. Repealed by Laws 1996, c. 345, § 67, eff. Oct. 1, 1996.
§68-510.1. Repealed by Laws 1996, c. 345, § 67, eff. Oct. 1, 1996.
§68-511. Repealed by Laws 1996, c. 345, § 67, eff. Oct. 1, 1996.
§68-512. Repealed by Laws 1996, c. 345, § 67, eff. Oct. 1, 1996.
§68-513. Repealed by Laws 1996, c. 345, § 67, eff. Oct. 1, 1996.
§68-514. Repealed by Laws 1996, c. 345, § 67, eff. Oct. 1, 1996.
§68-515. Repealed by Laws 1996, c. 345, § 67, eff. Oct. 1, 1996.
§68-516. Repealed by Laws 1996, c. 345, § 67, eff. Oct. 1, 1996.
§68-517. Repealed by Laws 1996, c. 345, § 67, eff. Oct. 1, 1996.
§68-518. Repealed by Laws 1996, c. 345, § 67, eff. Oct. 1, 1996.
§68-519. Repealed by Laws 1996, c. 345, § 67, eff. Oct. 1, 1996.
§68-520. Repealed by Laws 1996, c. 345, § 67, eff. Oct. 1, 1996.
§68-521. Repealed by Laws 1996, c. 345, § 67, eff. Oct. 1, 1996.
§68-522. Repealed by Laws 1996, c. 345, § 67, eff. Oct. 1, 1996.
§68-522.1. Repealed by Laws 1996, c. 345, § 67, eff. Oct. 1, 1996.
§68-523. Repealed by Laws 1996, c. 345, § 67, eff. Oct. 1, 1996.
§68-523.1. Repealed by Laws 1996, c. 345, § 67, eff. Oct. 1, 1996.
§68-524. Repealed by Laws 1996, c. 345, § 67, eff. Oct. 1, 1996.
§68-525. Repealed by Laws 1996, c. 345, § 67, eff. Oct. 1, 1996.
§68-526. Repealed by Laws 1996, c. 345, § 67, eff. Oct. 1, 1996.
§68-527. Repealed by Laws 1996, c. 345, § 67, eff. Oct. 1, 1996.
§68-530. Repealed by Laws 1996, c. 345, § 67, eff. Oct. 1, 1996.
§68-531. Repealed by Laws 1996, c. 345, § 67, eff. Oct. 1, 1996.
§68-601. Definitions.
For the purposes of this article:
1. "Motor vehicle" or "vehicle" means and includes any automobile, truck, truck-tractor, bus, vehicle, engine, machine, mechanical contrivance, or other conveyance which is propelled by an internal combustion engine or motor and not used in the air or upon fixed rails or tracks;
2. "Use" means and includes the consumption of motor fuel by any person in a motor vehicle for the propulsion thereof upon the public highways of this state;
3. "Gasoline" means the same as the term "motor fuel," and the term "motor fuel" means and includes every petroleum product, fluid, or liquid, or any combination thereof, having an A.P.I. gravity of forty-six (46) degrees Fahrenheit and at atmospheric pressure, and shall include drip, casinghead or natural gasoline, benzol, naphtha, benzine and solvents, and shall include any liquid or fluid of less than forty-six (46) degrees A.P.I. gravity at a temperature of sixty (60) degrees Fahrenheit compounded, blended, manufactured, or otherwise produced by mixing or blending gasoline or naphthas with any blending materials, when the blended product can be used for generating power in internal combustion engines, regardless of how such liquid or fluid is made, compounded, manufactured or recovered, and regardless of the name by which such liquid or fluid may be known or sold;
4. "Diesel fuel" means diesel engine fuel, kerosene, and all other liquids suitable for the generation of power for the propulsion of motor vehicles except those products subject to the tax imposed by Section 500.4 of this title;
5. "Person" means and includes natural persons, individuals, partnerships, firms, associations, limited liability companies, corporations, estate, trustees, business trusts, syndicates, or any corporations or combinations acting as a unit or any receiver appointed by any state or federal court; and the use of the singular number shall include the plural number;
6. "Tax Commission" means the Oklahoma Tax Commission;
7. "Motor Fuel/Diesel Fuel Importer for Use" means and includes any person importing gasoline or motor fuel or diesel fuel into this state in the fuel supply tank or tanks of any motor vehicle or in any other containers for use in propelling said vehicle upon the highways of this state;
8. "Gallon" means the quantity of fluid or liquid at a temperature of sixty (60) degrees Fahrenheit necessary to completely fill a United States standard gallon liquid measure; and
9. "Public highways" means and includes every road, highway, street, way or place within this state, of whatever nature, generally open to the use of the public as a matter of right for the purposes of vehicular travel, including a toll highway, and including streets and alleys of any town or city notwithstanding that the same may be temporarily closed for the purpose of construction, reconstruction, maintenance, or repair.
Added by Laws 1963, c. 363, § 2, eff. July 1, 1963. Renumbered from § 6-601 of this title by Laws 1965, c. 215, § 2. Amended by Laws 1978, c. 220, § 26, eff. Jan. 1, 1979; Laws 1993, c. 366, § 34, eff. Sept. 1, 1993; Laws 1997, c. 284, § 3, eff. July 1, 1997.
§68-602. Purpose of Article - Apportionment and use of revenues.
It is hereby declared to be the purpose of Section 601 et seq. of this title to levy a tax on those importing gasoline and diesel fuel into this state in the fuel supply tanks of vehicles being used on the highways of this state for commercial purposes, as a just and reasonable contribution to the cost of constructing, maintaining and policing such highways incident to the use thereof by such persons, and to the end that the highway users shall pay to this state an equal amount in taxes as is paid by other commercial highway users who use gasoline and diesel fuel on which the motor fuel excise tax has been paid to this state. The revenues, including interest and penalties, collected under the provisions of this article, shall be apportioned monthly in the manner and in the same proportion for the same purposes as the revenue collected pursuant to the Motor Fuel Tax Code is apportioned.
Provided, in the event that collections are insufficient for the monthly payment of motor fuel taxes to other states or jurisdictions in accordance with the International Fuel Tax Agreement, the Oklahoma Tax Commission shall transfer to the Corporation Commission the sum necessary for payment in full from current diesel fuel tax collections. Such transfer shall occur within five (5) working days of the request by the Corporation Commission.
Added by Laws 1963, c. 363, § 2, eff. July 1, 1963. Renumbered from § 6-602 of this title by Laws 1965, c. 215, § 2. Amended by Laws 1985, c. 194, § 5, eff. Nov. 1, 1985; Laws 1986, c. 223, § 36, operative July 1, 1986; Laws 1986, c. 284, § 8, operative July 1, 1986; Laws 1989, 1st Ex.Sess., c. 1, § 12, eff. July 1, 1990; Laws 1997, c. 284, § 4, eff. July 1, 1997; Laws 2005, c. 479, § 10, eff. July 1, 2005.
NOTE: Laws 2005, c. 411, § 2 repealed by Laws 2006, c. 16, § 50, emerg. eff. March 29, 2006.
§68-602.1a. Repealed by Laws 1997, c. 284, § 27, eff. July 1, 1997.
§68-602.2. Repealed by Laws 1997, c. 284, § 27, eff. July 1, 1997.
§68-603. Levy of tax.
A. In consideration of the use of the highways of this state, and in addition to all other taxes levied for such purposes, all persons who import gasoline and diesel fuel into this state in the fuel supply tank or tanks of motor vehicles or in any other containers for use in propelling such vehicles on the highways for commercial purposes, shall report and pay to the Tax Commission a tax for such use of the highways as provided in this section. The tax shall be levied and imposed as follows:
1. Gasoline, sixteen cents ($0.16) per gallon; and
2. Diesel fuel, thirteen cents ($0.13) per gallon.
The tax levied and imposed shall be measured and determined by the number of gallons of gasoline and diesel fuel so imported and actually used on the highways of this state. No gasoline or diesel fuel on which the tax levied by the Motor Fuel Tax Code has been paid to this state shall be used in computing the tax imposed by this section. In the event the tax levied by this section can be more accurately determined on a mileage basis, that is, by determining and using the total number of miles traveled in Oklahoma, or in case it is practicable to so determine the tax, the Tax Commission is authorized to accept and approve such basis.
B. Each person licensed pursuant to Section 607 of this title who properly remits the tax pursuant to this act shall be entitled to retain one and twenty-five one-hundredths percent (1.25%) of the tax imposed on gasoline by this section and remitted by that licensee and one and fifty-four one-hundredths percent (1.54%) of the tax imposed on diesel fuel by this section and remitted by the licensee to cover the costs of administration imposed by this act including record keeping, report filing, and remitting of the tax. The retention of a percentage of the tax permitted by this section shall not be allowed by a licensee if any report or the tax remittance is delinquent.
Added by Laws 1963, c. 363, § 2. Renumbered from § 6-603 of this title by Laws 1965, c. 215, § 2. Amended by Laws 1997, c. 284, § 5, eff. July 1, 1997.
§68-603.1. Repealed by Laws 1997, c. 284, § 27, eff. July 1, 1997.
§68-604. Repealed by Laws 1997, c. 284, § 27, eff. July 1, 1997.
§68-604.1. Repealed by Laws 1997, c. 284, § 27, eff. July 1, 1997.
§68-604.2. Repealed by Laws 1997, c. 284, § 27, eff. July 1, 1997.
§68-604.3. Repealed by Laws 1997, c. 284, § 27, eff. July 1, 1997.
§68-604.4. Repealed by Laws 1997, c. 284, § 27, eff. July 1, 1997.
§68-604.5. Repealed by Laws 1997, c. 284, § 27, eff. July 1, 1997.
§68-604.6. Repealed by Laws 1997, c. 284, § 27, eff. July 1, 1997.
§68-604.7. Repealed by Laws 1997, c. 284, § 27, eff. July 1, 1997.
§68-605. Exemptions.
The tax levied by this article shall not apply to motor fuel or diesel fuel imported into and used on the highways of this state by:
1. Persons operating motor vehicles commonly designated as automobiles or recreational vehicles which are constructed for and being used solely for the transportation of persons for purposes other than for hire or compensation;
2. Any person operating a motor vehicle or combination of vehicles used, designed, or maintained for transportation of persons or property, and a gross vehicle weight of less than twenty-six thousand (26,000) pounds;
3. Persons importing livestock and farm products in the raw state, including cotton, whether in the seed or ginned, and including cottonseed and baled hay, when such commodities are moved from farm to market, or from market to farm on a vehicle or on vehicles owned and operated by a bona fide farmer not engaged in motor vehicle transportation on a commercial scale;
4. Tour buses operated to transport passengers by charter or special service as defined by the Interstate Commerce Commission;
5. Motor fuel or diesel fuel used in vehicles owned by the United States of America; and
6. Persons importing motor fuel/diesel fuel for use into this state having applied for and received a temporary fuel permit from the Tax Commission.
No exemption from the tax levied by Section 603 of this title and as set forth in this section shall be construed as an exemption from the tax levied by the Motor Fuel Tax Code.
Added by Laws 1963, c. 363, § 2, eff. July 1, 1963. Renumbered from § 6-605 of this title by Laws 1965, c. 215, § 2. Amended by Laws 1978, c. 220, § 32, eff. Jan. 1, 1979; Laws 1980, c. 209, § 5, emerg. eff. May 30, 1980; Laws 1988, c. 14, § 6, operative July 1, 1988; Laws 1988, c. 244, § 10, emerg. eff. June 24, 1988; Laws 1997, c. 284, § 6, eff. July 1, 1997.
§68606. Accrual of liability Persons liable Exemptions.
The liability for the tax imposed by this article shall arise and accrue against the person operating a motor vehicle, the operation of which is subject to said tax, at the time and place said motor vehicle shall enter upon the highways of this state. Provided, however, a lessor who is engaged in the business of leasing for compensation motor vehicles and equipment he owns without drivers to carriers or other lessees for interstate operation may be deemed to be the Motor Fuel/Diesel Importer for Use when he supplies or pays for the motor fuel or diesel fuel consumed in such vehicles, and such lessor may be issued Motor Fuel/Diesel Fuel Importer for Use license. Any lessee may exclude motor vehicles of which he is lessee from his reports and liabilities, but only if the motor vehicles in question have been leased from a lessor holding a valid Motor Fuel/Diesel Fuel Importer for Use License.
Laws 1963, c. 363, § 2; Laws 1965, c. 215, § 2; Laws 1978, c. 220, § 33, eff. Jan. 1, 1979.
§68-607. Importer for use licenses - Temporary permits - Cooperative compacts or agreements with other states to collect taxes.
A. Before any person imports gasoline or diesel fuel into the state in the fuel supply tank or tanks of any motor vehicle, or in any other container for use on the highways of this state, such person shall file application for and obtain a Motor Fuel/Diesel Fuel Importer for Use License. Such requirement shall be complied with notwithstanding the tax levied by the Motor Fuel Tax Code has been paid on such gasoline or diesel fuel. However, persons exempted by Section 605 of this title from the tax levied pursuant to Section 603 of this title shall not be required to obtain such license. The application required by this section shall be verified and filed on a form prescribed and furnished by the Corporation Commission showing the name and address and kind of business of the applicant, a designation of the principal place of business and such other information as the Corporation Commission may require. Such application must also contain, as a condition to the issuance of the license, an agreement by the applicant to comply with the requirements of Section 601 et seq. of this title and the rules of the Corporation Commission.
B. Before any such application may be approved by the Corporation Commission, the applicant must fully comply with the contribution requirements pursuant to Section 607.2 of this title. In addition, prior to the approval, the Corporation Commission may require the applicant to file a bond payable to the State of Oklahoma conditioned upon compliance with the provisions of Section 601 et seq. of this title and the rules of the Corporation Commission in a sum of not more than Ten Thousand Dollars ($10,000.00), the amount thereof to be fixed by an order of the Corporation Commission. During the license year, the amount of any such bond required may be increased or reduced by the Tax Commission at its discretion, and the Corporation Commission may in its discretion, waive the filing of a bond by any person who regularly purchases sufficient gasoline or diesel fuel on which the motor fuel or diesel fuel excise tax has been paid to this state when the tax equals or exceeds the amount of the tax levied against such person under Section 601 et seq. of this title.
C. Upon approval of such application and bond, the Corporation Commission shall issue to the applicant a nontransferable Motor Fuel/Diesel Fuel Importer for Use License bearing a distinctive number, at no charge to the applicant. The license shall be issued on an annual basis and shall remain in full force and effect until surrendered, suspended, or canceled in the manner provided by law. Each license shall be valid only for the operation of motor vehicles on the highways of this state by the person to whom it is issued including motor vehicles transporting persons or property in furtherance of the business of the licensee under a lease, a contract or any other arrangement, whether permanent or temporary in nature. The Corporation Commission may issue one (1) license credential to evidence the compliance of the applicant with the provisions of this section and the provisions of Section 1120 of Title 47 of the Oklahoma Statutes.
D. In consideration of the use of the highways of this state, and in addition to all other taxes levied for such purposes, all persons who import motor fuel/diesel fuel into the state in the fuel supply tank or tanks of motor vehicles for use in propelling the vehicles on the highways for commercial purposes may receive a temporary motor fuel/diesel fuel permit from the Corporation Commission. This permit shall be recognized in lieu of licensing requirements in this state. The permit shall indicate the time and date of its issuance and shall be valid for a period not to exceed one hundred twenty (120) hours from such indicated time.
A fee of Twenty-five Dollars ($25.00) shall be charged for the issuance of the temporary permit. Eight Dollars ($8.00) of the fee shall be apportioned in the same manner as other motor fuel/diesel fuel revenue. Two Dollars ($2.00) of the fee shall be retained by the Corporation Commission and apportioned as provided in Section 3 of this act. Fifteen Dollars ($15.00) of the fee shall be paid to the State Treasurer for deposit in the General Revenue Fund.
Any person importing motor fuel/diesel fuel into this state for use while in possession of an expired, altered or undated temporary fuel permit shall be deemed to be operating without proper licensing and shall be subject to licensing and penalties as provided for in the Motor Fuel/Diesel Fuel Importer for Use Tax Code.
The Corporation Commission may prescribe an application form for the temporary permit and such other forms as it deems appropriate. The Corporation Commission, without notice, may suspend the issuance of temporary permits to any person found to be in violation of the Motor Fuel/Diesel Fuel Importer for Use Tax Code or similar laws of this state.
The Corporation Commission may enter into an agreement with any person or corporation located within or without the state for transmission of temporary permits by way of a facsimile machine or other device when the Corporation Commission determines that such agreement is in the best interests of the state.
E. In lieu of the requirements as provided for in Section 601 et seq. of this title in respect to licensing, bonding, reporting and auditing, the Corporation Commission may, when in the best interests of this state and its residents, enter into the International Fuel Tax Agreement or other cooperative compacts or agreements with another state or other states or provinces to permit base state or base jurisdiction licensing of persons importing motor fuel or diesel fuel into this state and liable for the tax levied pursuant to Section 601 et seq. of this title and provide for the cooperation and assistance among the member states and provinces in the administration and collection of motor fuels consumption and use taxes. Any action taken by the Oklahoma Tax Commission with respect to the International Fuel Tax Agreement or other such compacts or agreements prior to the effective date of this act shall remain in effect unless altered by the Corporation Commission pursuant to its authority to do so after the effective date of this act.
Added by Laws 1963, c. 363, § 2, eff. July 1, 1963. Renumbered from § 6-607 of this title by Laws 1965, c. 215, § 2. Amended by Laws 1978, c. 220, § 34, eff. Jan. 1, 1979; Laws 1980, c. 209, § 6, emerg. eff. May 30, 1980; Laws 1986, c. 142, § 4, emerg. eff. April 21, 1986; Laws 1988, c. 14, § 7, operative July 1, 1988; Laws 1990, c. 95, § 1, operative July 1, 1990; Laws 1993, c. 273, § 11, emerg. eff. May 27, 1993; Laws 1997, c. 284, § 7, eff. July 1, 1997; Laws 2003, c. 472, § 10; Laws 2004, c. 522, § 25, eff. July 1, 2004.
§68-607.1. Operation of vehicle without proper display of identification credentials - Penalties.
A penalty of not less than Fifty Dollars ($50.00) shall be imposed for any person operating a vehicle subject to the provisions of Section 601 et seq. of this title and Section 701 et seq. of this title without the proper display of, or, carrying in such vehicle, the identification credentials issued by the Corporation Commission. Such penalty shall not exceed the amount established by the Corporation Commission pursuant to the provisions of subsection A of Section 3 of this act. Revenue from such penalties shall be apportioned as provided in Section 3 of this act.
Added by Laws 1982, c. 104, § 1, operative July 1, 1982. Amended by Laws 1986, c. 142, § 3, emerg. eff. April 21, 1986; Laws 1987, c. 6, § 12, emerg. eff. March 16, 1987; Laws 1997, c. 284, § 8, eff. July 1, 1997; Laws 2004, c. 522, § 26, eff. July 1, 2004.
§68-607.2. Repealed by Laws 2004, c. 529, § 8, eff. Sept. 1, 2004.
§68608. Display of license Operating vehicle without license Penalties Venue.
Section 608. (a) Every person operating a motor vehicle on the highways of this state as a Motor Fuel/Diesel Fuel Importer for Use must at all times during such operation have displayed in the cab of such motor vehicle, a photostatic copy of the Motor Fuel/Diesel Fuel Importer for Use License which shall be subject to inspection at all times by representatives of the Tax Commission.
(b) Any person operating a motor vehicle on the highways of this state, the operation of which is subject to the tax levied by this article, without having obtained a Motor Fuel/Diesel Fuel Importer for Use License as required by Section 607 of this title, shall be guilty of a misdemeanor and, upon conviction, punished by a fine of not more than One Thousand Dollars ($1,000.00), or by imprisonment in the county jail for a period not exceeding one (1) year or both. The venue for prosecutions arising under this section shall be in the district court of any county in which such vehicle is being operated.
Laws 1963, c. 363, § 2; Laws 1965, c. 215, § 2; Laws 1978, c. 220, § 35, eff. Jan. 1, 1979.
§68-609. Reports and payments to Tax Commission - Delinquent payments.
A. Every person licensed under this article shall make and transmit to the Tax Commission on or before the last day of April, July, October, and January of each year, upon a form prescribed and furnished by the Tax Commission, a verified quarterly report, showing the total miles traveled, miles traveled in Oklahoma by each motor vehicle, the total gallonage of motor fuel or diesel fuel consumed, the number of gallons of motor fuel or diesel fuel purchased or received in this state, the date of each purchase or receipt, the name and address of the seller, the delivery invoice number of each purchase or receipt, and the number of gallons of motor fuel or diesel fuel imported into and used in this state. The report must also include the amount of motor fuel or diesel fuel on hand at the beginning and close of the period as shown by the physical inventory taken on that date (those dates), if storage is maintained, and a complete record of all receipts and withdrawals into and from said storage.
The number of gallons of motor fuel or diesel fuel shown to have been purchased or received in Oklahoma on which the tax levied by the Motor Fuel Tax Code has been paid to this state shall be deducted from the total number of gallons of motor fuel or diesel fuel used by such person in Oklahoma to determine the number of gallons of motor fuel or diesel fuel upon which the tax levied by this article is to be computed and paid.
Every person licensed under this article who travels less than ten thousand (10,000) miles per year in Oklahoma may, at the option of the Tax Commission, file an annual report in lieu of filing the quarterly report.
B. Every person at the time of filing each quarterly report shall pay to the Tax Commission the full amount of tax due for the preceding quarter at the rate provided for in this article. Such tax is due and payable on the first day of the succeeding quarter for which the report is filed, and if not paid, is delinquent from and after the twentieth day of such month. When any person shall fail to submit to the Tax Commission any report required hereunder within thirty (30) days from the date it is required to be filed, the Tax Commission shall assess, in addition to the penalties and interest provided for in Section 217 of this title, a penalty of not less than Five Dollars ($5.00) for the first offense and not less than Five Dollars ($5.00) for each subsequent offense.
C. The Motor Fuel/Diesel Fuel Importer for Use License of any person who is delinquent in the payment of tax levied by this article may be canceled by the Tax Commission in the manner provided by law.
Added by Laws 1963, c. 363, § 2, eff. July 1, 1963. Renumbered from § 6-609 of this title by Laws 1965, c. 215, § 2. Amended by Laws 1978, c. 220, § 36, eff. Jan. 1, 1979; Laws 1988, c. 14, § 8, operative July 1, 1988; Laws 1997, c. 284, § 10, eff. July 1, 1997.
§68610. Records of importers.
(a) Each Motor Fuel/Diesel Fuel Importer for Use must maintain and keep for a period of three (3) years such records of motor fuel or diesel fuel used and mileage traveled by each and all motor vehicles on the highways of this state including motor vehicles owned, operated, leased or under any other form of contract, together with inventories, withdrawals, deliveries, purchases supported by invoices, bills of lading and all pertinent records and papers as may be required by the Tax Commission for the administration of this article.
(b) Every retailer or dealer who sells and delivers any motor fuel or diesel fuel into the fuel supply tanks of any motor vehicle of a licensed Motor Fuel/Diesel Fuel Importer for Use must, at the time of the delivery, make and deliver to the person owning or operating such vehicle an invoice covering each such delivery, showing the name of the purchaser, the date, the name and address of the seller printed thereon, the number of gallons delivered, the price per gallon and total sales price, and such other information as the Tax Commission may require. Each invoice must be made in duplicate, be identified by consecutive numbers with at least three digits printed thereon, and each retailer or dealer must furnish said invoices and retain one copy thereof and be able to account for each invoice and each copy thereof.
The invoices required by this section must be demanded by every Motor Fuel/Diesel Fuel Importer for Use covering each purchase.
(c) Any person willfully violating any of the provisions of this section shall be guilty of a misdemeanor and shall, upon conviction thereof, be punished by a fine of not more than One Thousand Dollars ($1,000.00), or be sentenced to imprisonment in the county jail for not more than one (1) year, or both. Venue for prosecution arising under this section shall be in the district court of any county in which such person resides or, if such person is not a resident of this state, any county in which such person uses the highways of this state or maintains an established place of business.
Laws 1963, c. 363, § 2; Laws 1965, c. 215, § 2; Laws 1978, c. 220, § 37, eff. Jan. 1, 1979.
§68-611. Importation of motor fuel or diesel fuel without license - Tax payable - Credits - Refunds - Second and subsequent violations.
(a) Any person importing motor fuel or diesel fuel into this state and liable for the tax levied by this article for the first time who has not obtained a Motor Fuel/Diesel Fuel Importer for Use License, shall, for the purpose of determining the number of gallons of motor fuel or diesel fuel used on the highways of this state, be required to pay to the Tax Commission the tax levied by this article on all motor fuel or diesel fuel contained in the fuel supply tank or tanks, and any other containers for use in propelling said vehicle. Upon obtaining a Motor Fuel/Diesel Fuel Importer for Use License and filing a report showing all of the operations of such person subject to tax by this article, credit shall be allowed on said report for the tax paid under the provisions of this section and any overpayment of tax shall be refunded or credited to a future report. However, this credit shall not be allowed and no refund of such tax shall be made unless the report taking the credit or the claim for the refund is filed within thirty (30) days from the date of payment of said tax.
(b) The second time any person imports motor fuel or diesel fuel into this state and becomes liable for the tax levied by this article, without having obtained a Motor Fuel/Diesel Fuel Importer for Use License, the motor vehicle operated by such person may be seized and held until such person complies with the provisions of this article and pays all taxes determined to be due hereunder. However, said motor vehicle may be released upon the making of a bond or furnishing other security for the payment of the tax.
Added by Laws 1963, c. 363, § 2. Renumbered from § 6-611 of this title by Laws 1965, c. 215, § 2. Amended by Laws 1978, c. 220, § 38, eff. Jan. 1, 1979.
§68-612. Repealed by Laws 1997, c. 284, § 27, eff. July 1, 1997.
§68613. Discontinuance of operations.
(a) Whenever any person to whom a Motor Fuel/Diesel Fuel Importer for Use License has been issued ceases doing business or discontinues all operations in Oklahoma subject to the tax levied by this article, such person must notify the Tax Commission in writing of said fact within fifteen (15) days after such discontinuance and surrender such license together with all Motor Fuel/Diesel Fuel Importer for Use Licenses issued. All tax, penalties and interest levied by this article due from such person at the time of such discontinuance, shall become due and payable concurrently with such discontinuance, and such person must make a report and pay all such tax, interest and penalties at the time his license is surrendered.
(b) Any person willfully violating any of the provisions of this section shall be guilty of a misdemeanor and shall, upon conviction thereof, be punished by a fine of not more than One Thousand Dollars ($1,000.00), or be sentenced to imprisonment in the county jail for not more than one (1) year or both. Venue for prosecution arising under this section shall be in the district court of any county in which such person resides, or, if such person is not a resident of this state, any county in which such person uses the highways of this state or maintains an established place of business.
Laws 1963, c. 363, § 2; Laws 1965, c. 215, § 2; Laws 1978, c. 220, § 40, eff. Jan. 1, 1979.
§68614. Interstate carriers Partial invalidity.
Section 614. Nothing in this article shall be construed as requiring interstatecarriers to make a showing of "public convenience and necessity" in order to secure any license required by the provisions hereof, and the provisions of this article shall apply to interstate commerce only insofar as such regulation is permitted by the Constitutions of Oklahoma and the United States, and the holding of any part of this article or any section or part thereof to be void or ineffective for any cause by any court shall not affect any other section or part of this article.
Laws 1963, c. 363, § 2; Laws 1965, c. 215, § 2; Laws 1978, c. 220, § 41, eff. Jan. 1, 1979.
§68-615. Tax credit on gasoline or diesel fuel consumed outside state - Application and procedure.
Any person licensed under the Motor Fuel/Diesel Fuel Importer for Use Law shall be entitled to a credit equivalent to the tax rate per gallon on all gasoline or diesel fuel upon which the Oklahoma gasoline or diesel fuel tax has been paid and which has thereafter been consumed in motor vehicles outside this state. When the amount of credit provided in this section to which the person is entitled for any calendar quarter exceeds the amount of tax for which such person is liable for gasoline or diesel fuel consumed in Oklahoma in such vehicles during the same quarter, such excess shall, under regulations promulgated by the Tax Commission, be allowed as a credit if used within twenty-four (24) months from the first day of any calendar quarter against the tax for which such person would be otherwise liable for any of the succeeding quarters; or, upon claim filed with the Tax Commission within twenty-four (24) months from the first day of any calendar quarter in which the gasoline or diesel fuel was used, such excess, less one and seven-tenths percent (1.7%) of gasoline tax levied and two percent (2%) of diesel fuel tax levied pursuant to Section 500.4 of this title, may be refunded. Application for refund must be supported by evidence of the mileage traveled and the gallonage consumed and satisfactory evidence of the tax-paid purchases. Refund vouchers shall be paid from current collections derived from the tax levied under which the tax refund claims have been allowed, and a portion of such current collections as are necessary to pay such refund is hereby appropriated.
Added by Laws 1968, c. 79, § 1, emerg. eff. March 26, 1968. Amended by Laws 1978, c. 220, § 42, eff. Jan. 1, 1979; Laws 1988, c. 14, § 9, operative July 1, 1988; Laws 1997, c. 284, § 11, eff. July 1, 1997.
§68616. Citation.
Section 616. Sections 601 through 615 of this title shall be known as the Oklahoma Motor Fuel/Diesel Fuel Importer for Use Tax Code.
Laws 1978, c. 220, § 25, eff. Jan. 1, 1979.
§68701. Definitions.
The following words and phrases when used in this act are hereby defined as follows:
(a) The term "motor vehicle" or "vehicle" means and includes any automobile, truck, truck-tractor, bus, vehicle or mechanical contrivance which is propelled by an internal combustion engine or motor and not used in the air or upon fixed rails or tracks.
(b) The term "person" means and includes every natural person, fiduciary, individual, partnership, firm, association, limited liability company, corporation, business trust, or combination acting as a unit, or any receiver appointed by any state or federal court, and the use of the singular number shall include the plural. Whenever used in any clause prescribing and imposing a fine or imprisonment or both, the term "person" as applied to an association means and includes the parties or members thereof, and as applied to corporations, the officers thereof.
(c) "Commission" or "Tax Commission" means the Oklahoma Tax Commission.
(d) The term "special fuel" or "fuel" means and includes all combustible gases and liquids, including liquefied gases, which exist in the gaseous state at a temperature of sixty (60) degrees Fahrenheit and at a pressure of fourteen and seventenths (14.7) pounds per square inch absolute.
(e) The term "use" shall mean and include the following: (1) the delivery or placing of special fuel into the fuel supply tank or tanks of any motor vehicle in this state for use in whole or in part to propel such vehicle on the public highways of this state; (2) the consumption on the public highways of Oklahoma of any special fuel imported into this state in the fuel supply tank or tanks of any motor vehicle using the public highways of this state for commercial purposes; (3) the consumption of special fuel in any type of motor vehicle on the public highways of this state for any purpose by any person who refuses to divulge the source of such fuel.
(f) The term "public highway" means and includes every road, highway, street, way or place within this state, of whatever nature, generally open to the use of the public as a matter of right for the purposes of vehicular travel, including a toll highway, and including streets and alleys of any town or city, notwithstanding that the same may be temporarily closed for the purpose of construction, reconstruction, maintenance, or repair.
(g) The term "gallon" means one (1) United States standard gallon at a temperature of sixty (60) degrees Fahrenheit.
(h) The term "special fuel dealer" shall mean any person engaged in the business of handling special fuel who delivers any part thereof into the fuel supply tank or tanks of any motor vehicle.
(i) The term "special fuel user" shall mean and include any person other than a special fuel dealer, who uses special fuel in this state, within the meanings of the word "use" as defined in this act, and shall include any person who consumes special fuel to propel a motor vehicle upon the public highways of this state when such special fuel has been purchased or obtained from any source free from the payment to this state of the tax levied by this act.
Laws 1953, p. 328, § 1, eff. May 31, 1953. Renumbered from § 727.1 by Laws 1965, c. 215, § 1. Amended by Laws 1978, c. 220, § 43, eff. Jan. 1, 1979; Laws 1993, c. 366, § 35, eff. Sept. 1, 1993.
§68702. Purpose of act Collection, report and payment of tax.
It is hereby declared to be the purpose of this act to levy a tax upon the use as defined in this act of all special fuels:
(1) delivered into the fuel supply tanks of motor vehicles in Oklahoma or,
(2) imported into Oklahoma in the fuel supply tanks of motor vehicles by persons using Oklahoma highways for hire, compensation or other commercial purposes, not specifically exempted herein, to the end that such highway users shall pay to the State of Oklahoma an equal amount in taxes on special fuels so used by them in Oklahoma as is paid by other commercial highway users who use special fuel obtained in Oklahoma and on which the tax levied by this act is collected by special fuel dealers and remitted to the Tax Commission. Said tax is levied as a toll for the use of the public highways of this state.
When special fuel is delivered into the supply tank or tanks of a motor vehicle in Oklahoma by a special fuel dealer the tax shall be collected by the special fuel dealer at the time of such sale and delivery and shall be reported and remitted to the Tax Commission as hereinafter provided. The tax shall be reported and paid by special fuel dealers on all special fuel delivered by special fuel dealers into the supply tanks of motor vehicles owned or operated by them. In all other cases persons delivering special fuel into the supply tank of any motor vehicle in Oklahoma and all persons who use any special fuel to propel a motor vehicle upon the public highways of this state on which fuel the tax levied by this act has not been paid shall report such use and remit the tax on such special fuel to the Tax Commission as a special fuel user as hereinafter provided.
Laws 1953, p. 328, § 2; Laws 1965, c. 215, § 1.
§68703. Imposition of tax.
(a) There is hereby levied and imposed an excise tax of five and onehalf ($0.055) cents per gallon on the use, within the meanings of the word "use" as defined in this act, of all special fuels delivered in this state into the fuel supply tank or tanks of motor vehicles. The delivery or placing of special fuel into the fuel supply tank or tanks of motor vehicles for use in whole or in part for power to propel such vehicles on the public highways shall constitute and is hereby declared to be the taxable incidence of this levy.
(b) An excise tax of five and onehalf ($0.055) cents per gallon is also levied, in consideration of the use of the highways of this State, on the use of all special fuels imported into Oklahoma in the fuel supply tank or tanks of motor vehicles and used to propel said motor vehicles for commercial purposes, public or private, or for transportation for hire or compensation, on the public highways of this state, which tax shall be measured and determined by the number of gallons of such imported special fuels actually used in Oklahoma.
Laws 1953, p. 329, § 3; Laws 1965, c. 215, § 1.
§68-704. Apportionment and use of proceeds of tax.
A. The purpose of Section 701 et seq. of this title is to provide revenue for general governmental functions of state government and for the construction and maintenance of state and county highways and bridges. The tax, including penalties and interest collected under the levy in Section 703 of this title, shall be apportioned monthly for use as follows:
1. An amount equal to the revenue, including penalties and interest thereon, accruing from four cents ($0.04) per gallon of the five and one-half cents ($0.055) per gallon collected of the tax levied by Section 703 of this title, shall be apportioned monthly and used for the following purposes:
a. three percent (3%) shall be paid by the Tax Commission to the State Treasurer and placed to the credit of the General Revenue Fund of the State Treasury,
b. seventy-two and three-fourths percent (72 3/4%) shall be deposited in the State Treasury to the credit of the State Transportation Fund, and
c. twenty-four and one-fourth percent (24 1/4%) shall be transmitted by the Tax Commission to various counties of the state, in the percentage which the population and area of each county bears to the population and area of the entire state. The population shall be as shown by the last Federal Census or the most recent annual estimate provided by the U.S. Bureau of the Census;
2. An amount equal to the revenue, including penalties and interest thereon, accruing from one cent ($0.01) per gallon of the five and one-half cents ($0.055) per gallon collected of the tax levied by Section 703 of this title, shall be apportioned monthly and shall be deposited in the State Treasury to the credit of the State Transportation Fund; and
3. An amount equal to the revenue, including penalties and interest thereon, accruing from one-half cent ($0.005) per gallon of the five and one-half cents ($0.055) per gallon collected of the tax levied by Section 703 of this title, shall be apportioned monthly and distributed as follows:
Forty percent (40%) of such sum shall be distributed to the various counties in that proportion which the county road mileage of each county bears to the entire state road mileage as certified by the State Transportation Commission, and the remaining sixty percent (60%) of such sum shall be distributed to the various counties on the basis which the population and area of each county bears to the total population and area of the state. The population shall be as shown by the last Federal Census or the most recent annual estimate provided by the U.S. Bureau of the Census.
B. The funds apportioned or transmitted pursuant to the provisions of subparagraph c of paragraph 1 of subsection A of this section and paragraph 3 of subsection A of this section shall be used in accordance with and subject to the provisions of subsection B of Section 500.6 of this title.
Added by Laws 1953, p. 329, § 4, eff. May 31, 1953. Renumbered from § 727.4 of this title by Laws 1965, c. 215, § 1. Amended by Laws 1985, c. 194, § 6, eff. Nov. 1, 1985; Laws 1986, c. 223, § 38, operative July 1, 1986; Laws 1986, c. 284, § 12, operative July 1, 1986; Laws 1989, 1st Ex.Sess, c. 1, § 16, eff. July 1, 1990; Laws 1997, c. 284, § 12, eff. July 1, 1997.
§68705. Additional tax.
(a) There is hereby levied and imposed an excise tax of one ($0.01) cent per gallon on the use, within the meanings of the word "use" as defined in this act, of all special fuels delivered in this state into the fuel supply tank or tanks of motor vehicles. The delivery or placing of special fuel into the fuel supply tank or tanks of motor vehicles for use in whole or in part for power to propel such vehicles on the public highways shall constitute and is hereby declared to be the taxable incidence of this levy.
(b) An excise tax of one ($0.01) cent per gallon is also levied, in consideration of the use of the highways of this state, on the use of all special fuels imported into Oklahoma in the fuel supply tank or tanks of motor vehicles and used to propel said motor vehicles for commercial purposes, public or private, or for transportation for hire or compensation, on the public highways of this state, which tax shall be measured and determined by the number of gallons of such imported special fuels actually used in Oklahoma.
Laws 1953, p. 331, § 5; Laws 1955, p. 388, § 1; Laws 1965, c. 215, § 1.
§68-706. Purpose, apportionment and distribution of tax.
It is hereby declared to be the purpose of the levy in Section 705 of this title to provide funds for the construction and maintenance of county highways and permanent bridges in such counties and for these purposes it is hereby expressly provided that the special fuel use tax levied by Section 705 of this title shall be apportioned and distributed monthly by the Tax Commission to the several counties in the following manner: one-third (1/3) on area, one-third (1/3) on rural population, defined as including the population of all municipalities with a population of less than five thousand (5,000) according to the latest Federal Decennial Census, and one-third (1/3) on county road mileage, as last certified by the Department of Transportation, as each county bears to the entire area, rural population and road mileage of the state. The funds apportioned pursuant to this section shall be used in accordance with and subject to the provisions of subsection B of Section 500.6 of this title.
Added by Laws 1953, p. 331, § 6, eff. May 31, 1953. Amended by Laws 1959, p. 284, § 1. Renumbered from § 727.6 by Laws 1965, c. 215, § 1. Amended by Laws 1986, c. 284, § 13, operative July 1, 1986; Laws 1997, c. 284, § 13, eff. July 1, 1997.
§68707. Determination of tax on mileage basis Levies by political subdivisions prohibited.
In the event the tax herein imposed on special fuels imported into this state in the fuel supply tanks of motor vehicles and the tax on special fuels used in motor vehicles owned and operated by licensed special fuel dealers or other persons acting as special fuel users can be more accurately determined on a mileage basis, that is, by determining and using the total number of miles traveled in Oklahoma and the total gallons of fuel consumed, or in case it is more practicable to so determine the tax, the Tax Commission is authorized to approve and accept such basis.
No city, town, county or other subdivision of the state shall levy or collect any excise tax to be paid upon the use of special fuels as defined by this act.
Laws 1953, p. 332, § 7; Laws 1965, c. 215, § 1.
§68-707.1. Additional excise tax on special fuel - Levy - Exemptions - Disposition of revenues.
A. In addition to the excise taxes levied by Sections 703 and 705 of this title, there is hereby levied an excise tax of two and one-half cents ($0.025) upon the use within this state of each and every gallon of special fuel, which shall be reported and collected in the same manner as provided by law for the reporting and collecting of all other tax levies upon the use of special fuel within this state.
B. The tax levied by this section shall not apply to special fuel which is exempt from tax under the provisions of Section 708 of this title.
C. The excise tax of two and one-half cents ($0.025) per gallon of special fuel levied in this section, together with any interest and penalties thereon, collected by the Tax Commission shall be apportioned monthly as follows:
Two cents ($0.02) of the two and one-half cents ($0.025), together with any interest and penalties thereon, shall be apportioned according to the provisions of paragraph 1 of Section 704 of this title.
One-half of one cent ($0.005) of the two and one-half cents ($0.025), together with any interest and penalties thereon, shall be deposited in the County Bridge and Road Improvement Fund of the State Treasury to be used for the purposes set forth in the County Bridge and Road Improvement Act.
Added by Laws 1984, c. 139, § 5, emerg. eff. April 16, 1984. Amended by Laws 1985, c. 179, § 83, operative July 1, 1985; Laws 1997, c. 284, § 14, eff. July 1, 1997.
§68-707.2. Excise tax on special fuel - Levy - Exemptions - Disposition of revenues.
A. There is hereby levied an excise tax of one cent ($0.01) upon the use within this state of each and every gallon of special fuel, which shall be reported and collected in the same manner as provided by law for the reporting and collecting of all other tax levies upon the use of special fuel within this state.
B. The tax levied by this section shall not apply to special fuel which is exempt from tax pursuant to the provisions of Section 708 of this title.
C. The excise tax of one cent ($0.01) per gallon of special fuel levied by this section, together with any interest and penalties thereon, collected by the Tax Commission shall be apportioned as set forth in paragraph 5 of subsection A and subsection C of Section 500.6 of this title.
Added by Laws 1985, c. 179, § 84, operative July 1, 1985. Amended by Laws 1985, c. 351, § 18, emerg. eff. July 31, 1985; Laws 1987, c. 113, § 15, operative May 18, 1987; Laws 1995, c. 114, § 5, eff. July 1, 1995; Laws 1996, c. 205, § 6, eff. July 1, 1996; Laws 1997, c. 284, § 15, eff. July 1, 1997.
§68-707.3. Additional excise tax on special fuel - Levy - Exemptions - Intent of Legislature - Apportionment of revenues.
A. In addition to the excise taxes levied by Sections 703, 705, 707.1 and 707.2 of this title, there is hereby levied an excise tax of six cents ($0.06) upon the use within this state of each and every gallon of special fuel, which shall be reported and collected in the same manner as provided by law for the reporting and collecting of all other tax levies upon the use of special fuel within this state. The basis for computation of the amount due shall be one hundred percent (100%) of the net gallonage reported to the Tax Commission for taxation, after all deductions allowed by law have been made.
B. The tax levied by this section shall not apply to special fuel which is exempt from tax pursuant to the provisions of Section 708 of this title.
C. It is hereby declared to be the intent of the Legislature that the total state excise tax, levied by this section and Sections 703, 705, 707.1 and 707.2 of this title, shall be sixteen cents ($0.16) upon each gallon of special fuel used within Oklahoma and that no special fuel shall be subject to the total tax more than one time.
D. The additional excise tax of six cents ($0.06) per gallon of special fuel levied by this section, together with any interest and penalties thereon, collected by the Tax Commission shall be apportioned monthly as follows:
1. Five cents ($0.05) of the six cents ($0.06), together with any interest and penalties thereon, shall be apportioned to the State Transportation Fund; and
2. One cent ($0.01) of the six cents ($0.06), together with any interest and penalties thereon, shall be distributed to the various counties in the following manner: thirty percent (30%) based upon area, thirty percent (30%) based upon population according to the latest Federal Decennial Census or the most recent annual estimate provided by the U.S. Bureau of the Census and forty percent (40%) based upon county road mileage on the basis which the respective area, population and county road mileage of each county bear to the total area, population and county road mileage of the state. The funds so transmitted shall be used in accordance with and subject to the provisions of subsection B of Section 500.6 of this title.
Added by Laws 1987, c. 113, § 10, operative May 18, 1987. Amended by Laws 1989, 1st Ex.Sess., c. 1, § 17, eff. July 1, 1990; Laws 1997, c. 284, § 16, eff. July 1, 1997.
§68-708. Exemptions from tax.
The tax levied by this act shall not apply to:
1. Special fuel delivered into the supply tanks of or used by motor vehicles owned by the United States of America. Provided this exemption shall not apply to supply tank deliveries in Oklahoma unless the special fuel dealer demands and receives of the purchaser an exemption certificate of the kind and type prescribed and furnished by the Comptroller General of the United States, and such certificates shall be presented to the Tax Commission in lieu of the tax only by the special fuel dealer handling and delivering such special fuel;
2. Special fuel delivered into the supply tanks of farm tractors and stationary engines owned and operated by the purchaser of such special fuel and used exclusively for agricultural purposes as such purposes and uses are defined and enumerated in paragraph 2 of Section 500.3 of this title;
3. Special fuel imported into Oklahoma in the fuel supply tanks of motor vehicles commonly known and designated as automobiles, as distinguished from truck-type vehicles, which are constructed for, and being used solely for, the transportation of persons for purposes other than for hire or compensation and provided that the aggregate capacity of the fuel supply tank or tanks of any such vehicle shall not exceed thirty (30) gallons;
4. Special fuel imported into Oklahoma in the fuel supply tank or tanks of a motor vehicle when said supply tank or tanks and any additional containers have an aggregate capacity of not more than twenty-five (25) gallons and if such motor vehicle is not being used as a common carrier of persons or property, a contract carrier of persons or property, or as a private commercial carrier of property;
5. Special fuel imported into Oklahoma in the fuel supply tanks of motor vehicles and used on the highways of this state in importing or exporting livestock and farm products in the raw state, including cotton, whether in the seed or ginned, and including cottonseed and baled hay, when such commodities are moved from farm to market, or from market to farm on a vehicle or on vehicles owned and operated by a bona fide farmer not engaged in motor vehicle transportation for hire or compensation;
6. Special fuel used exclusively in road machinery and equipment built for and being used on location in the construction, repair or maintenance of public highways, roads and bridges by road contractors and by counties, cities and towns of this state, provided, however, this exemption shall not apply to automobiles nor to truck-type vehicles such as dump trucks, flatbed trucks and pickup trucks;
7. Special fuel used exclusively in passenger motor buses or coaches, having a seating capacity of ten or more persons, when such fuel is purchased by and used exclusively in public transit systems operated by any county, city, or town of this state, or by any public trust created under the laws of this state of which a county, city, or town of this state is the sole beneficiary thereof. Provided this exemption shall be allowed only when supported by a certificate executed by such city or trust on forms prescribed and furnished by the Tax Commission;
8. Special fuel purchased by any county, city or town for use as fuel to propel motor vehicles on the public roads and highways of this state, when said vehicles are being operated for the sole benefit of said county, city or town; provided that if the special fuel is placed directly into the fuel supply tank or tanks of the motor vehicle by the supplier, an exemption certificate must be furnished to the supplier on forms prescribed and furnished by the Tax Commission;
9. Special fuel purchased by any Oklahoma school district for use as fuel to propel motor vehicles on the public roads and highways of this state, when the vehicles are being operated for the sole benefit of the school district, provided that if the special fuel is placed directly into the fuel supply tank or tanks of the motor vehicle by the supplier, an exemption certificate must be furnished to the supplier on forms prescribed and furnished by the Tax Commission; and
10. Motor fuels purchased by the Oklahoma Department of Transportation for use as fuel to propel motor vehicles on the public roads and highways of this state, when the vehicles are being operated for the sole benefit of the Department of Transportation.
Added by Laws 1953, p. 382, § 8. Amended by Laws 1955, c. 383, § 2. Renumbered from § 727.8 of this title by Laws 1965, c. 215, § 1. Amended by Laws 1969, c. 111, § 1, operative May 1, 1969; Laws 1976, c. 16, § 1, emerg. eff. Feb. 26, 1976; Laws 1997, c. 284, § 17, eff. July 1, 1997; Laws 2001, c. 144, § 1, eff. Nov. 1, 2001.
§68709. Special fuel dealers' and users' licenses.
(a) Before any person uses any special fuel in this state, within the meanings of the word "use" as defined herein, such person shall file an application for and obtain the license (a special fuel dealer's license or a special fuel user's license) required herein to cover such use. Provided, however, that persons exempted from the payment of the tax herein imposed shall not be required to obtain a license. The application required by this section shall be verified by affidavit and filed on a form prescribed and furnished by the Tax Commission showing the name and address and kind of business of the applicant, the type of license desired, a designation of the principal place of business and such other information as the Tax Commission may require. Such application must also contain as a condition to the issuance of the license, an agreement by the applicant to comply with the requirements of this act and the rules and regulations of the Tax Commission.
(b) Before any such application may be approved by the Tax Commission, the applicant must file a bond payable to the State of Oklahoma conditioned upon compliance with the provisions of this act and the rules and regulations of the Tax Commission in the sum of not more than Twentyfive Thousand Dollars ($25,000.00), the amount thereof to be fixed by an order of the Tax Commission. The amount of any such bond required may be increased or reduced by the Tax Commission at any time. Provided, however, that one bond in an amount fixed by the Tax Commission of not more than Fifty Thousand Dollars ($50,000.00) may be made to secure the payment of the tax due the State of Oklahoma under the provisions of this act, and the other motor fuel tax laws.
(c) Upon approval of such application and bond, the Tax Commission shall issue to the applicant a nontransferable special fuel dealer's license or special fuel user's license, as the case may be, bearing a distinctive number. Such license shall remain in full force until surrendered, suspended or canceled in the manner provided by law. The license of each special fuel dealer shall be valid only for the use of special fuel by the person to whom it is issued and shall be displayed conspicuously in the principal place of business of the holder thereof. The license issued to a special fuel user shall be valid only for the use of special fuel in the operation of motor vehicles on the highways of this state by the person to whom it is issued, including motor vehicles, transporting persons or property in furtherance of the business of said licensee under a lease, a contract or any other arrangement, whether permanent or temporary in nature.
(d) Each special fuel dealer or special fuel user must make application for and secure a duplicate of his license for each station or location operated by such dealer or user at which special fuel is placed into the fuel tanks of motor vehicles. The application must be made on a form prescribed and furnished by the Tax Commission, showing the name, address and license number of the applicant, the location of the station or storage for which the duplicate is applied, and such other information as the Tax Commission may require. Upon approval of such application, the Tax Commission shall issue to the applicant a nontransferable duplicate of such special fuel dealer's or special fuel user's license. Each duplicate license shall continue in full force and effect until surrendered by the person holding such license, or until canceled by the Tax Commission. There shall be displayed at each station or location, where special fuel is placed into fuel supply tanks of motor vehicles, the duplicate special fuel dealer's or special fuel user's license under which it is operated. Such license shall be clearly visible from the driver's seat of any vehicle being serviced.
(e) It shall be unlawful for any person, notwithstanding that such person holds a valid license as a distributor or importeruser of motor fuel or gasoline, to act or carry on any operation as a special fuel dealer or a special fuel user in this state unless such person is the holder of an uncanceled special fuel dealer's license or a special fuel user's license, as the case may be, as herein required, issued to him by the Oklahoma Tax Commission. A license issued under the provisions of other motor fuel or gasoline tax laws shall not authorize the holder thereof to use special fuel. Any retail outlet as defined herein may, at its option, pay to the supplier, for the benefit of the state, all taxes due on all special fuels purchased from suppliers or may report all special fuels sales and make payment of all taxes due as provided in Section 710 of this act.
Laws 1953, p. 332, § 9; Laws 1965, c. 215, § 1; Laws 1978, c. 98, § 2, eff. July 1, 1978.
§68710. Reports by dealers and users Payment of tax.
(a) Every special fuel dealer and special fuel user must on or before the twentieth day of each calendar month, file with the Tax Commission a verified report, on a form prescribed and furnished by the Tax Commission showing the total number of gallons of special fuel used within this state during the preceding calendar month.
(b) The monthly reports of every special fuel dealer must show the following information on special fuels: The number of gallons on hand at the beginning and end of each month; the number of gallons received from any and all sources supported by detailed schedules and receipts and purchases; the number of gallons sold and delivered to any other licensed special fuel dealer on which the special fuel tax is assumed by such other licensed dealer, giving full details of each sale, including the date thereof, invoice number and O.T.C. license number of the seller and purchaser; number of gallons delivered into the fuel supply tanks of motor vehicles and such other information as the Tax Commission may require.
(c) The monthly report of every special fuel user must show the following information on special fuels: The total miles traveled; miles traveled in Oklahoma by each motor vehicle using special fuel; the total gallonage of special fuel consumed; the number of gallons of special fuel purchased or received in this state; the date of each purchase or receipt; the name and address of the seller; the delivery invoice number of each purchase or receipt; and the number of gallons of special fuel imported into and used in this state. The report must also include the amount of special fuel on hand at the beginning and close of the month as shown by the physical inventory, if storage is maintained in Oklahoma, and a complete record of all receipts into and withdrawals from said storage. The number of gallons of special fuel shown to have been purchased tax paid from a licensed special fuel dealer in Oklahoma shall be deducted from the total number of gallons of special fuel used in Oklahoma by such special fuel user to determine the number of gallons of special fuel upon which the tax levied by this act is to be computed and paid. The requirement of this section shall not apply to receipts and inventory control date covering separate bulk storage from which only wholesale distribution of special fuel is made.
(d) Each special fuel dealer and special fuel user at the time of filing each monthly report must pay to the Tax Commission the full amount of tax due for the preceding calendar month at the rate provided for in this act. Such tax is due and payable on the first day of each month and if not paid is delinquent from and after the twentieth day of such month. Motor fuel taxes collected by a distributor on behalf of a licensed retailer of the distributor or collected on behalf of a nonlicensed purchaser of motor fuel that are subsequently determined to be uncollectible by the distributor may be credited against subsequent motor fuel tax liability imposed by law upon such distributor. For purposes of this subsection, motor fuel taxes collected on behalf of a licensed retailer of the distributor or collected on behalf of a nonlicensed purchaser shall be deemed uncollectible if such taxes are deducted for purposes of calculating the federal income tax liability of the distributor. The method for crediting uncollectible motor fuel taxes as provided by this subsection shall be prescribed in rules and regulations of the Oklahoma Tax Commission.
(e) The license of any person using special fuel who is delinquent in the payment of the tax levied by this act may be canceled by the Tax Commission in the manner provided by law.
Amended by Laws 1988, c. 14, § 10, operative July 1, 1988.
§68711. Registration of vehicles Use of liquefied gas from cargo tank.
(a) Before any motor vehicle is operated on the public highways of this state, the operation of which is subject to the tax levied by subsection (b) of Section 3 of this act, and including the vehicles of licensed dealers using special fuel, such motor vehicles must be registered under this act with the Tax Commission as herein provided. An application for registration of each motor vehicle required to be registered must be on a form prescribed and furnished by the Tax Commission showing the name, address and special fuel user's or special fuel dealer's license number of the owner or operator of such vehicle, a complete description of the motor vehicle, including the make, model, year made, motor number, license tag number, kind of special fuel used by such motor vehicle and such other information as the Tax Commission may require.
(b) No vehicle used for the transportation of any liquefied gas, including butane or propane, shall be allowed to use, for the operation of said vehicle, gas directly from the cargo tank of said vehicle or any trailer attached thereto; and any connection of a fuel line between the motor of such vehicle and any tank other than the regularly installed fuel tank of such vehicle, direct or indirect, and any valve or outlet for such a connection, is hereby prohibited.
(c) Upon approval of said application, the Tax Commission shall register such vehicle and issue a nontransferable special fuel use vehicle permit therefor bearing a distinctive number and showing that the vehicle described is registered with the Commission by a licensed special fuel dealer or user who has complied with the provisions of this act. Such permits shall remain in force until surrendered, suspended or canceled in the manner provided by law.
(d) Every person operating a motor vehicle on the highways of this state as a special fuel dealer or a special fuel user must at all times during such operation have displayed in the cab of such motor vehicle a special fuel use vehicle permit which shall be subject to inspection at all times by representatives of the Tax Commission and peace officers.
Laws 1953, p. 334, § 11; 1965, c. 215, § 1.
§68712. Records of dealers and users.
Every special fuel dealer using special fuel to propel any motor vehicle on the highways of this state and all special fuel users, including special fuel users who import special fuel into this state in the supply tanks of motor vehicles using the highways for commercial purposes, shall keep, in addition to the foregoing requirements as to records which apply to them, records of the mileage traveled by each and all motor vehicles propelled by special fuel using the highways of this state including the motor vehicles owned, operated, leased or under any other form of contract, together with inventories, withdrawals, deliveries, purchases supported by invoices, and such other records as may be required by the tax Commission. All such records and invoices must be preserved for a period of at least three (3) years.
Laws 1953, p. 335, § 12; Laws 1965, c. 215, § 1.
§68713. Unlicensed first time users Payment of tax Credit or refund.
Any person operating any motor vehicle on the highways of this state as a special fuel user by importing special fuel into this state in the supply tanks of the motor vehicle who shall be liable for the tax levied by this act for the first time and who has not obtained a special fuel user's license and special fuel use vehicle permit, shall, for the purpose of determining the number of gallons of special fuel used on the highways of this state, be required to pay the Tax Commission the tax levied by this act on all special fuel contained in the fuel supply tank or tanks, and any other containers, for use in propelling said vehicle. Upon obtaining a special fuel user's license and proper vehicle permits and filing a report showing all of the operations of such person subject to the tax levied by this act, credit shall be allowed on said report for the tax paid under the provisions of this section, and any overpayment of the tax shall be refunded or credited to a future report. However, this credit shall not be allowed and no refund of such tax shall be made unless the report taking the credit or the claim for refund is filed within thirty (30) days from the date of payment of said tax.
Laws 1953, p. 335, § 13; Laws 1965, c. 215, § 1.
§68714. Accrual of liability for tax Liability of lessees.
The liability for the tax imposed by this act shall arise and accrue on the first use of special fuels in this state either against the special fuel dealer at the time of delivery of special fuel into the supply tank or tanks of a motor vehicle or against a special fuel user operating a motor vehicle upon the highways of this state, the operation of which is subject to and liable for the payment of said tax. The liability for said tax shall accrue against a special fuel user importing special fuel into this state in the supply tank or tanks of a motor vehicle using Oklahoma highways for commercial purposes at the time and place such motor vehicle shall enter upon a public highway of this state.
Any special fuel dealer or special fuel user who as lessee, in furtherance of his business enters into a lease for one or more trips or a contract or other arrangement, with another person for the operation of a motor vehicle, the operation of which vehicle is or will be subject to the tax herein imposed, shall be deemed to be the operator of said vehicle or vehicles, and shall report and pay the tax accruing by reason of such use under said lease, or contract. Provided that this provision shall not be construed as relieving any lessor or person acting as a special fuel user from the payment of the tax herein imposed in cases where the lessee, with whom such lessor has entered into a lease or contract has not obtained a special fuel dealer's or user's license under this act. Provided further, nothing herein shall be construed as requiring the filing of more than one report covering a given special fuel use operation or as requiring the payment of the tax herein imposed more than once on the same special fuel.
Laws 1953, p. 335, § 14; Laws 1965, c. 215, § 1.
§68715. Cessation of use of special fuel.
Whenever any person to whom a special fuel dealer's license or a special fuel user's license has been issued ceases using special fuel within this state, such person must notify the Tax Commission in writing of said fact within fifteen (15) days after such discontinuance and surrender his license together with all special fuel use vehicle permits issued and outstanding under said license. All tax, penalty and interest on special fuel levied by this act and due from such person at the time of such discontinuance, shall become due and payable concurrently with such discontinuance, and such person must make a report and pay all the tax, interest and penalties due at the time his license is surrendered.
Laws 1953, p. 336, § 15; Laws 1965, c. 215, § 1.
§68716. Invoices Record of deliveries.
Every person acting as a special fuel dealer who sells and delivers any special fuel, as defined in this act, into the fuel supply tank or tanks of any motor vehicle in this state must, at the time of such delivery, make and deliver to the person owning or operating such vehicle (the purchaser of such fuel or his agent) an invoice covering each such delivery, showing the name of the operator or purchaser, the date, the name and address of the special fuel dealer and his special fuel dealer's license number, the number of gallons of special fuel delivered, the place of delivery, the correct name of such fuel, the price per gallon and total sale price of the amount delivered, and such other information as the Commission may require. Each such invoice must be made in duplicate, be identified by consecutive numbers printed thereon, and each special fuel dealer must furnish said invoices and retain one copy thereof and be able to account for each numbered delivery invoice and each copy thereof.
The invoices required by this section must be demanded by every person purchasing and receiving a delivery of special fuel into the supply tank of a motor vehicle in Oklahoma at the time of such delivery and such person shall carry any such invoice with the vehicle until the fuel covered by same is consumed. If the special fuel is delivered by a licensed dealer or user into the supply tank or tanks of his own vehicles, a notation or proper record of same shall be made on the invoice.
Every person making such sales and deliveries of special fuel and every person so receiving and purchasing special fuel must each retain one copy of each such invoice as a part of his permanent records for a period of at least three (3) years.
Every special fuel dealer or user who shall make any delivery of special fuel into the supply tank of any motor vehicle owned and operated by such dealer or user shall make and maintain for at least three (3) years a record of all such deliveries of special fuel showing such information as the Commission may require.
Laws 1953, p. 336, § 16; Laws 1965, c. 215, § 1.
§68717. Records of purchases, sales, delivery, use or disposition of special fuel Monthly reports.
All persons manufacturing, refining, producing, importing or causing to be imported into Oklahoma, any special fuel and all persons purchasing, receiving or in any manner coming into possession of such fuel, as defined herein, for sale or use must keep a record of all such fuel purchased, received, sold, delivered, used, or otherwise disposed of, including the date and number of gallons of each such transaction, together with the purchase or sales invoices, or copies thereof. All such records and invoices must be kept for a period of at least three (3) years.
All persons making sales or deliveries to any service station or to any person acting as a special fuel dealer or operating as a special fuel user must on or before the twentieth day of each calendar month, file with the Tax Commission a report covering the preceding calendar month, on a form prescribed and furnished by the Tax Commission, scheduling and giving full details of each such sale and such other information as the Tax Commission may require. Provided, however, that if it should be determined by the Tax Commission that a report filed on the basis of the total gallons of special fuel sold or delivered to each station, dealer or user per month is sufficient the Commission is authorized to approve and accept such a report. Laws 1953 P. 337, Sec. 17; Laws 1965 C. 215, Sec. 1.
Laws 1953, p. 337, § 17; Laws 1965, c. 215, § 1.
§68718. Reports by carriers.
The Tax Commission may require any railroad company, street, suburban or interurban railway company, pipeline company, common carrier and any other person transporting special fuel, either in interstate or intrastate commerce, to a point within this state, to make a verified report on a form prescribed and furnished by the Tax Commission on or before the twentieth day of each month for the preceding calendar month, showing the name and address of the transporter, a schedule of all deliveries and consignments of fuel within the state, including the name and address of the person to whom such fuel was actually delivered, delivery date, waybill or invoice number, consignor, point of origin, shipping date, tank car initial and number, true name of fuel, number of gallons delivered and such other information as the Tax Commission may require.
The requirements of this section shall not apply to the transportation of special fuel contained in the fuel supply tank or tanks of motor vehicles.
Laws 1953, p. 337, § 18; Laws 1965, c. 215, § 1.
§68719. Violations Punishment Venue.
Any person who uses special fuel in this state without a proper license or who violates any of the provisions of this act shall be guilty of a misdemeanor and shall, upon conviction thereof, be punished by a fine of not more than One Thousand Dollars ($1,000.00) or by imprisonment in the county jail for not more than one (1) year, or by both such fine and imprisonment. The venue for prosecutions arising under this section shall be in the county court in which such violation is committed.
Laws 1953, p. 337, § 19; Laws 1965, c. 215, § 1.
§68720. Interstate carriers Showing of public convenience and necessity Application of Act.
Nothing in this act shall be construed as requiring interstate carriers to make a showing of "public convenience and necessity" in order to secure any license or permit required by the provisions hereof, and the provisions of this act shall apply to interstate commerce only in so far as such regulation is permitted by the Constitution of Oklahoma and the United States, and the holding of any part of this act or any section or part thereof to be void or ineffective for any cause by any court shall not affect any other section or part of this act.
Laws 1953, p. 337, § 20; Laws 1965, c. 215, § 1.
§68721. Lien of tax.
The tax levied by this act is hereby declared to be a lien upon any motor vehicle owned or operated in Oklahoma by any person: (1) who is delinquent in the payment of the tax levied by this act; or, (2) who imports special fuel into this state in the supply tank or tanks of a motor vehicle, the use of which special fuel is subject to the tax levied by this act, when such person has not obtained a special fuel user's license.
Any motor vehicle subject to such lien, or being operated on the highways of Oklahoma in violation of any of the provisions of this act, may be seized by any authorized agent of the Oklahoma Tax Commission or any highway patrolman, sheriff, deputy sheriff, or other peace officer within this state, and disposed of or sold under said lien to satisfy payment of any tax due from the owner or operator of such vehicle under this act. Such seizure and sale shall be in the manner and form as provided by law.
Laws 1953, p. 337, § 21; Laws 1965, c. 215, § 1.
§68722. Tax credit on special fuels consumed outside State Application and procedure.
Any person licensed as a special fuel dealer or special fuel user shall be entitled to a credit equivalent to the tax rate per gallon on all special fuels upon which the Oklahoma special fuel tax has been paid and which has thereafter been consumed in motor vehicles outside the State of Oklahoma. When the amount of credit herein provided to which the dealer or user is entitled for any calendar month exceeds the amount of tax for which such dealer or user is liable for special fuels consumed in Oklahoma in such vehicles during the same month, such excess shall, under regulations promulgated by the Oklahoma Tax Commission, be allowed as a credit against the tax for which such dealer or user would be otherwise liable for any of the succeeding months; or, upon claim filed with the Oklahoma Tax Commission within one (1) year from the first day of any calendar month in which said special fuel was used, such excess may be refunded. Application for refund must be supported by evidence of the mileage traveled and the gallonage consumed and satisfactory evidence of the taxpaid purchases. Refund vouchers shall be paid from current collections derived from the tax levied under which the tax refund claims have been allowed, and a portion of such current collections as are necessary to pay such refund is hereby appropriated.
Laws 1968, c. 80, § 1, emerg. eff. March 26, 1968.
§68723. Fee in lieu of tax.
A. In lieu of the special fuel tax imposed by Sections 703, 705, 707.1, 707.2 and 707.3 of this title, there is hereby levied a flat fee of Fifty Dollars ($50.00) on each passenger automobile, and on each pickup truck or van not exceeding one (1) ton in capacity, using liquefied petroleum gas or natural gas as fuel, except that no such fee shall be levied on any vehicle which is the subject of an exemption pursuant to Section 708 of this title. Provided that, should the passenger automobile, pickup truck or van have been acquired or should the liquefied petroleum gas or natural gas system be installed on or after July 1, the flat fee shall be Twentyfive Dollars ($25.00) for the remainder of the calendar year, except as hereinafter provided.
B. Beginning January 1, 1991, in lieu of the special fuel tax imposed by Sections 703, 705, 707.1, 707.2 and 707.3 of this title, there is hereby levied a flat fee of One Hundred Dollars ($100.00) on each passenger automobile, and on each pickup truck or van not exceeding one (1) ton in capacity, using compressed natural gas, liquefied natural gas, methanol or "M-85" which is a mixture of methanol and gasoline containing at least eighty-five percent (85%) methanol as fuel, except that no such fee shall be levied on any vehicle which is the subject of an exemption pursuant to Section 708 of this title. Provided that, should the passenger automobile, pickup truck or van have been acquired or should the compressed natural gas, liquefied natural gas, methanol or "M-85" system be installed on or after July 1, the flat fee shall be Fifty Dollars ($50.00) for the remainder of the calendar year, except as hereinafter provided.
C. Beginning January 1, 1993, in lieu of the special fuel tax imposed by Sections 703, 705, 707.1, 707.2 and 707.3 of this title, there is hereby levied a flat fee of One Hundred Fifty Dollars ($150.00) on each vehicle exceeding one (1) ton in capacity, using liquefied petroleum gas, compressed natural gas, liquefied natural gas, methanol or "M-85" as fuel, except that no such fee shall be levied on any vehicle which is the subject of an exemption pursuant to Section 708 of this title. Provided that, should the vehicle be acquired or should the compressed natural gas, liquefied natural gas, methanol or "M-85" system be installed on or after July 1, the flat fee shall be Seventy-five Dollars ($75.00) for the remainder of the calendar year, except as hereinafter provided.
D. Every person operating a vehicle using liquefied petroleum gas, liquefied natural gas, compressed natural gas, methanol or "M-85" as fuel shall make application for and obtain a decal to be issued on a yearly basis by the Oklahoma Tax Commission on forms prescribed and furnished by the Tax Commission.
E. Every person required to make application for and receive a decal under this section shall, at the time of making said application, remit to the Tax Commission the total amount of the fee due.
F. Each decal issued by the Tax Commission pursuant to the provisions of this section, shall expire on December 31 of every year, and in addition thereto said decals shall be displayed in the lower right hand corner of the front windshield of said vehicle. Upon receipt of satisfactory proof by the Tax Commission that it has become necessary to replace the windshield of the vehicle for which the decal was issued, another decal shall be issued by the Tax Commission as a replacement for a fee of One Dollar ($1.00).
G. When any vehicle using liquefied petroleum gas, liquefied natural gas, compressed natural gas, methanol or "M-85" as fuel and displaying a current decal as provided in this section is sold, such decal shall remain with the vehicle sold, unless the equipment installed to enable the vehicle to use liquefied petroleum gas, liquefied natural gas, compressed natural gas, methanol or "M-85" has been removed from the vehicle before the sale.
H. When the aforementioned equipment has been removed before the sale, the seller of the vehicle shall also remove the decal required of vehicles using liquefied petroleum gas, liquefied natural gas, compressed natural gas, methanol or "M-85". The removed decal, a receipt from the Oklahoma Tax Commission showing that the fee required has been paid for the current year, and the payment of a onedollar fee for duplicate decal shall entitle the seller to make application for and obtain a new decal to be used for the remainder of the year on any vehicle using liquefied petroleum gas, liquefied natural gas, compressed natural gas, methanol or "M-85" in accordance with the provisions of this section.
I. Provisions contained in Sections 701 through 721 of this title shall not apply to any vehicle using liquefied petroleum gas, liquefied natural gas, compressed natural gas, methanol or "M-85".
J. All funds derived from the fee imposed by subsection A of this section shall be deposited annually in the General Revenue Fund of the State Treasury by the Tax Commission. When any person fails to obtain a current decal within thirty (30) days of the date said decal is required as provided in this section, there shall become due and payable a penalty of twenty percent (20%) of the fee in addition to the fee. Said penalty to be deposited in the same manner as the fee pursuant to this subsection.
K. All funds derived from the fee imposed by subsections B and C of this section shall be collected by the Oklahoma Tax Commission and apportioned annually to the State Transportation Fund. When any person fails to obtain a current decal within thirty (30) days of the date such decal is required as provided in this section, there shall become due and payable a penalty of twenty percent (20%) of the fee in addition to the fee. Such penalty shall be deposited in the same manner as the fee pursuant to this subsection.
Laws 1975, c. 360, § 1, eff. Jan. 1, 1976; Laws 1978, c. 242, § 1, eff. July 1, 1978; Laws 1982, c. 54, § 1, emerg. eff. March 30, 1982; Laws 1990, c. 336, § 11, operative July 1, 1990; Laws 1991, c. 235, § 18, eff. July 1, 1991; Laws 1992, c. 306, § 2, eff. July 1, 1992; Laws 1993, c. 224, § 7, eff. Sept. 1, 1993.
§68801. Determination of state's claim for inheritance or transfer taxes Process Disclaimer Pleading.
In any action to determine heirs, partition real estate, quiet title thereto, foreclose a lien thereon, or any combination thereof, where such title has been derived wholly or in part, directly or remotely, by inheritance, devise or gift made in contemplation of death, from any deceased person, the State of Oklahoma may be made a party defendant for the purpose of determining its claim against the estate of such deceased person for inheritance or transfer taxes. The court shall not acquire jurisdiction to enter any judgment against the State of Oklahoma or the Oklahoma Tax Commission in any such action until there shall have been served on the Oklahoma Tax Commission, in the manner hereinafter provided, a notice of the pendency of the suit containing the title and number under which the action is filed, the court in which filed, the name, date and place of death of the deceased person, the name, relationship and address, if known, of each heir, executor, administrator, devisee, trustee, and assign, of such deceased person, the identifying number of any tax liens which may have been filed against the decedent, and a description of the real estate covered by such action in which it is claimed the decedent owned or held any right, title or interest, which notice shall be signed by the plaintiff or his attorney of record. The notice, with a copy of the petition in the cause thereto attached, shall be served on the Oklahoma Tax Commission in the same manner as for the service of summons. The Oklahoma Tax Commission or its General Counsel may, in lieu of service, accept service by indorsement of such acceptance on one copy of the notice and the service or acceptance of service shall operate to make the State of Oklahoma a party to such action. The Oklahoma Tax Commission may in its discretion, without service of any notice on the Commission, disclaim or plead in any such cause. The Oklahoma Tax Commission shall have forty (40) days after the date of service or acceptance of service within which to plead in the cause, and the Oklahoma Tax Commission shall set up any interest the State of Oklahoma may have in the subject matter of the action. If the Oklahoma Tax Commission fails to answer such petition within the time allowed, judgment may be rendered foreclosing the State of Oklahoma from any interest, lien or claim for state taxes, interest or penalty on or against the property described in the notice. Provided, that in all cases where the person, or persons, owning the real property involved in the action at the time of death has been dead for more than ten (10) years, prior to the institution of the action and such facts are set forth in the petition, it shall not be necessary to make the State of Oklahoma a party to such action.
Added by Laws 1965, c. 250, § 2. Amended by Laws 1997, c. 294, § 13, eff. July 1, 1997.
§68802. Levy of tax.
A tax, at the rates prescribed in the following section is hereby levied upon the transfer of the net estate of every decedent, whether in trust or otherwise, to persons, associations, corporations, or bodies politic, of property, real, personal, or mixed, whether tangible or intangible, or any interest therein or income therefrom, by will or the intestate laws of this state, by any order setting apart property and/or granting family allowances pursuant to the probate code, by deed, grant, bargain, sale, or gift made in contemplation of death of the grantor, vendor or donor or intended to take effect in possession or enjoyment at or after such death. Provided, however, that nothing in this article shall be construed as subjecting to payment of such tax the escheat of property to the state for the benefit of its common schools. Such tax shall be imposed upon the value of the net estate and transfers at the rates, under the conditions, and subject to the exemptions and limitations hereinafter prescribed.
The word "transfer," as used in this article, shall be taken to include, but shall not be limited to, the passing of property, or any vested or contingent interest therein, in possession or enjoyment, present or future, by distribution, by statute, descent, devise, bequest, grant, deed, bargain, sale, or gift.
Laws 1965, c. 250, § 2.
§68802.1. Credit to tax levied by Section 802.
A credit to the tax levied by Section 802 of Title 68 of the Oklahoma Statutes shall be allowed for all or a part of the Oklahoma estate tax paid with respect to the transfer of property, including property passing as a result of the exercise or nonexercise of a power of appointment, to the present decedent by or from a person who died within ten (10) years before, or within two (2) years after, the present decedent. The credit shall be computed in the same manner as provided by Section 2013 of the Internal Revenue Code of 1954, as amended.
Added by Laws 1974, c. 312, § 4, emerg. eff. June 1, 1974. Amended by Laws 1996, c. 334, § 1, eff. Nov. 1, 1996.
§68803. Rates of tax.
The tax upon the net estate and transfers, as defined and determined under this Article, shall be determined and computed as follows:
1. Upon the net estate and transfers passing to the father, mother, child, child of husband or wife, adopted child, or any lineal descendant of decedent or of such adopted child, the rate shall be as follows:
(a) Fivetenths percent (0.5%) of the value of the net estate not in excess of Ten Thousand Dollars ($10,000.00).
(b) One percent (1%) of the value of the net estate in excess of Ten Thousand Dollars ($10,000.00), and not in excess of Twenty Thousand Dollars ($20,000.00).
(c) One and fivetenths percent (1.5%) of the value of the net estate in excess of Twenty Thousand Dollars ($20,000.00), and not in excess of Forty Thousand Dollars ($40,000.00).
(d) Two percent (2%) of the value of the net estate in excess of Forty Thousand Dollars ($40,000.00), and not in excess of Sixty Thousand Dollars ($60,000.00). (e) Two and fivetenths percent (2.5%) of the value of the net estate in excess of Sixty Thousand Dollars ($60,000.00), and not in excess of One Hundred Thousand Dollars ($100,000.00).
(f) Three percent (3%) of the value of the net estate in excess of One Hundred Thousand Dollars ($100,000.00), and not in excess of Two Hundred Fifty Thousand Dollars ($250,000.00).
(g) Six and fivetenths percent (6.5%) of the value of the net estate in excess of Two Hundred Fifty Thousand Dollars ($250,000.00), and not in excess of Five Hundred Thousand Dollars ($500,000.00).
(h) Seven percent (7%) of the value of the net estate in excess of Five Hundred Thousand Dollars ($500,000.00), and not in excess of Seven Hundred Fifty Thousand Dollars ($750,000.00).
(i) Seven and fivetenths percent (7.5%) of the value of the net estate in excess of Seven Hundred Fifty Thousand Dollars ($750,000.00), and not in excess of One Million Dollars ($1,000,000.00).
(j) Eight percent (8%) of the value of the net estate in excess of One Million Dollars ($1,000,000.00), and not in excess of Three Million Dollars ($3,000,000.00).
(k) Eight and fivetenths percent (8.5%) of the value of the net estate in excess of Three Million Dollars ($3,000,000.00), and not in excess of Five Million Dollars ($5,000,000.00).
(l) Nine percent (9%) of the value of the net estate in excess of Five Million Dollars ($5,000,000.00), and not in excess of Ten Million Dollars ($10,000,000.00).
(m) Ten percent (10%) of the value of the net estate in excess of Ten Million Dollars ($10,000,000.00).
2. The tax upon the net estate and transfers other than those transfers specified in paragraph 1, above, shall be at the following rates:
(a) One percent (1%) of the value of the net estate not in excess of Ten Thousand Dollars ($10,000.00).
(b) Two percent (2%) of the value of the net estate in excess of Ten Thousand Dollars ($10,000,00), and not in excess of Twenty Thousand Dollars ($20,000.00).
(c) Three percent (3%) of the value of the net estate in excess of Twenty Thousand Dollars ($20,000.00), and not in excess of Forty Thousand Dollars ($40,000.00). (d) Four percent (4%) of the value of the net estate in excess of Forty Thousand Dollars ($40,000.00), and not in excess of Sixty Thousand Dollars ($60,000.00). (e) Five percent (5%) of the value of the net estate in excess of Sixty Thousand Dollars ($60,000.00), and not in excess of One Hundred Thousand Dollars ($100,000.00).
(f) Six percent (6%) of the value of the net estate in excess of One Hundred Thousand Dollars ($100,000.00), and not in excess of Two Hundred Fifty Thousand Dollars ($250,000.00).
(g) Thirteen percent (13%) of the value of the net estate in excess of Two Hundred Fifty Thousand Dollars ($250,000.00), and not in excess of Five Hundred Thousand Dollars ($500,000.00).
(h) Fourteen percent (14%) of the value of the net estate in excess of Five Hundred Thousand Dollars ($500,000.00), and not in excess of One Million Dollars ($1,000,000.00).
(i) Fifteen percent (15%) of the value of the net estate in excess of One Million Dollars ($1,000,000.00).
Laws 1965, c. 250, § 2; Laws 1973, c. 206, § 1, operative July 1, 1974; Laws 1975, c. 1, § 1, emerg. eff. Feb. 4, 1975; Laws 1981, c. 237, § 1, eff. Jan. 1, 1982.
§68804. Additional tax to absorb federal credit.
In case the tax levied upon the value of the property of the estate in Oklahoma and transfers by Section 801 et seq. of this title is less than the credit allowed by the federal government on estate tax imposed upon the value of the property of the estate in Oklahoma, for state estate and inheritance taxes imposed upon the value of the property of the estate in Oklahoma, pursuant to 26 U.S.C. Section 2011, then, in that event, there shall be levied an additional tax which shall be imposed upon the value of the property of the estate in Oklahoma, as of the date of the determination of the Federal Estate Tax, equal to the difference between such credit and the Oklahoma Estate Tax levied upon the value of the property of the estate in Oklahoma and transfers by this Article. Such credit allowed by the federal government shall be the percentage of such credit which is the percentage which the value of the property of the estate in Oklahoma bears to the total value of the estate of the decedent. Such additional tax to absorb the credit shall be determined, assessed, collected and paid pursuant to the provisions of Section 801 et seq. of this title.
Added by Laws 1965, c. 250, § 2. Amended by Laws 1981, c. 237, § 2, eff. Jan. 1, 1982; Laws 1996, c. 334, § 2, eff. Nov. 1, 1996.
§68-805. Payment of tax.
The tax levied by Section 801 et seq. of this title, with any interest or penalties pertaining thereto, shall be payable to and collectible by the Oklahoma Tax Commission. All revenues, including fees collected under the provisions of Section 801 et seq. of this title shall be paid monthly by the Tax Commission to the State Treasurer and placed to the credit of the General Revenue Fund of the state to be used for governmental functions and to be paid out only pursuant to direct appropriation by the Legislature; provided, for the fiscal year beginning July 1, 2002, the first One Million Four Hundred Thousand Dollars ($1,400,000.00) of such revenues shall be apportioned to the Education Reform Revolving Fund.
Added by Laws 1965, c. 250, § 2. Amended by Laws 2002, c. 458, § 5, eff. July 1, 2002.
§68806. Time when tax due Inability to determine amount Hearing.
(a) The tax levied by this article shall accrue at the time of the transfer by the death of decedent or otherwise and shall be due and payable nine (9) months after the date of the death of the decedent. All taxes shall bear interest at the rate of one and onequarter percent (1 1/4%) per month from the date when the same are delinquent. No interest or penalty shall be collected on any tax levied by this article except as provided in this section.
(b) The Tax Commission is authorized to accept payment of any tax hereunder in partial payments and shall provide by rules and regulations for the manner, method and time of making such partial payments. If, because of pending litigation, contingent claims, or disagreement between interested parties as to the value of the estate subject to tax, a determination of the full amount of taxes cannot be had and upon a finding of the district court that such a situation reasonably exists, the tax on that portion of the estate, the taxable value of which cannot be reasonably determined, shall bear interest at the rate of onehalf (1/2) of the rate of interest specified in subsection (a) of this section per month in lieu of the rate provided in this section for other cases. The district court shall conduct a hearing and shall make findings of fact. The district court shall notify the Oklahoma Tax Commission at least thirty (30) days prior to the hearing for purposes of making the finding required by this subsection. The district court shall make specific findings of fact in support of any conclusion that some portion of the taxable value of the estate cannot be reasonably determined as a result of pending litigation, contingent claims or disagreement between interested parties as to the value of the estate subject to tax. For purposes of this subsection, neither the Oklahoma Tax Commission nor the Internal Revenue Service shall be considered interested parties.
(c) Upon the payment of taxes, interest and penalties the Tax Commission shall issue its official receipt therefor. The Commission may, if requested, issue acquittances, releases and waivers for the transfer of stock or shares which shall be admitted to record and registration without further attestation; and such receipt or certificate shall be furnished by the Tax Commission without cost to the estate or beneficiaries. The Tax Commission may issue a duplicate certificate, showing that the tax upon any particular parcel or tract of real estate has been paid, to any person entitled to such certificate under the provisions of this article, charging therefor a fee of fifty cents ($0.50).
Amended by Laws 1983, c. 13, § 2, emerg. eff. March 23, 1983; Laws 1988, c. 87, § 2, operative July 1, 1988; Laws 1989, c. 249, § 17, eff. July 1, 1989; Laws 1990, c. 339, § 5, emerg. eff. May 31, 1990.
§68-807. Value of gross estate - Terms defined - Property not specifically devised - Exempt estates.
A. The value of the gross estate, used as a basis for a determination of the value of the net estate, shall be determined by including:
1. The value, at the time of the death of the decedent, or the alternate valuation as herein authorized, of all property, real, personal, or mixed, whether tangible or intangible, in which the decedent had an interest, whether vested or contingent, within the jurisdiction of this state, and any interest therein, or income therefrom, which shall pass in possession or enjoyment, present or future, by distribution, by statute, descent, devise, bequest, grant, deed, bargain, sale, gift or contract, to any person or persons, associations or corporations, in trust or otherwise, by testamentary disposition or by the laws of inheritance or succession of this or any other state or country, and including the value of the homestead.
However, in determining the value of the gross estate of a nonresident of this state, there shall be excluded all intangible personal property, except intangible personal property required to be included in such gross estate and subjected to tax under paragraph 7 of this subsection, if:
a. the transferor at the time of the transfer was a resident of a state or territory of the United States, or of any foreign country, which at the time of the transfer did not impose a transfer tax or death tax of any character in respect of personal property of residents of this state, except tangible personal property having an actual situs in such state or territory or foreign country, or
b. the laws of the state, territory or country of residence of the transferor at the time of the transfer contained a reciprocal exemption provision under which nonresidents were exempted from transfer taxes or death taxes of every character in respect to personal property, except tangible personal property having an actual situs therein, provided the state, territory or country of residence of such nonresident allowed a similar exemption to residents of the state, territory or country of residence of such transferor. For the purpose of this subsection the District of Columbia and possessions of the United States shall be considered territories of the United States;
2. Except as provided in this paragraph, the value of any real or personal property, including the homestead passing by deed, grant, bargain, sale or gift made in contemplation of death of the grantor, vendor, or donor, or intended to take effect in possession or enjoyment at or after the death of the decedent. Any transfer made by the decedent of a material part of the estate of the decedent within three (3) years prior to death, without an equivalent in monetary consideration, shall, unless shown to the contrary, be deemed to have been in contemplation of death, and such transfers shall be included at their net value at the date of decedent's death. Except as to gifts with respect to a life insurance policy, this paragraph shall not apply to that portion of a gift which is properly excluded from the decedent's federal taxable gifts or which is treated as a federal taxable gift of the decedent only because the decedent consented to have a gift made by his or her spouse treated as made one-half by the decedent;
3. To the extent of any interest therein of which the decedent has, at any time, made a transfer, in trust or otherwise, where the enjoyment thereof was subject, at the date of the death of the decedent, to any change through the exercise of a power, either by the decedent alone or in conjunction with any person, to alter, amend or revoke the terms of such trust, or where the decedent relinquished any such power in contemplation of death, or where the decedent reserved to the decedent during the life of the decedent the income from the property included in any such transfer; and to the extent of any interest in property in which the decedent donee has released a general power of appointment in contemplation of the death of the decedent, whether or not the decedent had previously transferred such property;
4. To the extent of the value of any interest of the decedent in any property owned by the decedent and any other person as joint tenants, or tenants by the entirety, including funds or securities deposited with any person, corporation, bank or trust company or held in any safety box kept by the beneficiary or joint survivor, except such part of the property or deposit as may be shown to have originally belonged to such other person and never to have been acquired by the latter from the decedent for less than an adequate and full consideration in money or money's worth. Persons claiming to own an interest with the decedent in any property, real or personal, included in the taxable estate of the decedent must support said claim by adequate proof, showing the value of claimant's interest contributed in money or money's worth from separate funds or properties, and provided that a sworn affidavit setting forth the facts supporting such claims shall be considered prima facie evidence of adequate proof;
5. To the extent of the total amount of the proceeds of insurance payable or accruing to the decedent's estate by virtue of policies upon the life of the decedent or the annuities, cash surrender values or options held in life insurance policies upon the lives of others;
6. To the extent of the amount receivable directly, in trust, or as annuities by all other beneficiaries, or under a joint policy by the survivor, of the proceeds of life insurance, by virtue of policies taken out on the life of the decedent and in which, at the time of death, the decedent had the right, directly or indirectly, to change the beneficiary or to convert the policy to decedent's own use, or in which the decedent possessed any other incidents of ownership, exercisable either alone or in conjunction with any other person.
This section shall not operate to include as a taxable asset any interest in any policy or contract of insurance, wherein the insured survives such spouse or beneficiary, belonging to any deceased spouse as such, or to any deceased spouse as beneficiary, or to any deceased beneficiary, claimed or existing on account of payment of premiums from funds of any beneficiary.
Each and every insurance company, association or other institution which has outstanding on the life of a deceased resident of this state policies of insurance in an aggregate amount of Two Thousand Five Hundred Dollars ($2,500.00) or more, immediately upon being notified of the death of the insured, shall file with the Oklahoma Tax Commission an information return containing complete information pertaining to such insurance, including any information on file with the reporting insurer concerning policies of insurance issued by other insurers on the life of the decedent. Notwithstanding any provisions of this or other sections, no insurer shall be liable for any part of the tax levied by Section 801 et seq. of this title, and no insurer shall be required to retain any portion of the proceeds of a policy.
The provisions of this section and of Section 801 et seq. of this title shall not apply to the value of an annuity or other payment receivable by any beneficiary under:
a. an employees' trust, or under a contract purchased by an employees' trust, forming a part of a pension, stock bonus, or profit-sharing plan, where said trust was created for the exclusive benefit of the employee members or their beneficiaries and said purpose had not been altered at the time of the decedent's separation from employment, whether by death or otherwise, or at the time of termination of the plan if earlier, and was a plan described in Section 401(a) of the Internal Revenue Code of 1954, as amended,
b. a retirement annuity contract purchased by an employer, and not by an employees' trust, pursuant to a plan which, at the time of decedent's separation from employment, by death or otherwise, or at the time of termination of the plan if earlier, was a plan described in Section 403(a) of the Internal Revenue Code of 1954, as amended, or
c. a retirement annuity contract purchased for an employee by an employer which is an organization referred to in subsection A of Section 2359 of this title, and which is exempt from tax.
If such amounts payable after the death of the decedent under a plan described in subparagraph a or b of this paragraph, under a contract described in subparagraph c of this paragraph, are attributable to any extent to payments or contributions made by the decedent, no exclusion shall be allowed for that part of the value of such amounts in the proportion that the total payments or contributions made by the decedent bear to the total payments or contributions, except that all amounts payable to a surviving spouse shall not be included in the decedent's estate. For purposes of this subsection, contributions or payments made by the decedent's employer or former employer under a trust or plan described in subparagraph a or b of this paragraph shall not be considered to be contributed by the decedent, and contributions or payments made by the decedent's employer or former employer toward the purchase of an annuity contract described in subparagraph c of this paragraph shall, to the extent excludable from gross income under Section 403(b) of the Internal Revenue Code of 1954, as amended, not be considered to be contributed by the decedent;
7. To the extent of the interest of any decedent, who at the time of death was a nonresident of the State of Oklahoma, in any intangible personal property which is used in connection with any established business, having a business situs in this state including, the interest of such nonresident in a partnership the business of which is conducted in the state or the majority of assets of which are located in this state. None of the intangible personal property subject to tax under this paragraph shall be exempt under the provisions for reciprocity in paragraph 1 of subsection A of this section. No property exempted by paragraph 6 of this subsection shall be subject to tax by reason of this paragraph;
8. If a decedent bequeaths property to one or more executors or trustees in lieu of their commissions or allowance or in any amount exceeding the commission or allowance prescribed by law, the excess in value of the property so bequeathed over the amount prescribed by law; and
9. To the extent of the value of any interest in property within the jurisdiction of this state, over which the decedent at the time of the death of the decedent had possessed a "general power of appointment". A "general power of appointment" as used herein is restricted to one which is exercisable in favor of the decedent, the estate of the decedent, creditors of the decedent, or the creditors of the estate of the decedent.
B. In determining the value of the gross estate under this section there shall be excluded the value of any interest in decedent's estate, beneficial or otherwise, vesting in the surviving spouse, provided that the value of such interest shall be included for the purpose of computing additional tax liability under Section 804 of this title.
Such exclusion shall be limited to that value of the gross estate, beneficial or otherwise, vesting in the surviving spouse, less debts, mortgages, liens, administration charges or other encumbrances chargeable against the value of the gross estate so vested.
C. The gross value of the estate shall not be diminished by any transfers due to the claim of any creditor against the estate arising from a contract payable by its terms at or after the death of the decedent, except insofar as it may be affirmatively shown by competent evidence that such claim was legally due and payable in the lifetime of the decedent or was supported by a consideration of equivalent monetary value; and the forgiveness of any debt or the surrender of any right in any contract or chose in action upon the death of the decedent shall be deemed a transfer to the extent of the value or interest of the decedent therein at the time of death.
The deduction of any right of dower or curtesy claimed or passing under the laws of any other state, territory or foreign country, and the ownership of property, devolution, and succession thereto, the construction of wills, deeds, or transfers of both real and personal property within this state, the taxable situs thereof and the domicile of the decedent shall be governed by the laws of this state for the purposes of Section 801 et seq. of this title.
D. The term "tangible property," as used in Section 801 et seq. of this title, means and includes all corporeal property such as real estate, goods, wares and merchandise, or any interest therein, or income therefrom. The term "real estate" includes any royalty, ground rental, leasehold interest or income therefrom. The terms "goods, wares, and merchandise" means and includes all property, real, personal or mixed, situated within the State of Oklahoma or within its jurisdiction. The term "intangible property," as used herein, means and includes all incorporeal property other than that named as tangible.
E. Whenever the property within this state of a resident or nonresident decedent is not specifically bequeathed or devised, such property, including all transfers under a residuary clause, shall for the purpose of Section 801 et seq. of this title be deemed to be transferred proportionally to and divided pro rata among all the general legatees and devisees named in the will.
F. There shall be exempt from payment of tax hereunder any estate, the total net value of which, within the State of Oklahoma, does not exceed the sum of One Hundred Dollars ($100.00).
Added by Laws 1965, c. 250, § 2. Amended by Laws 1968, c. 171, § 1, emerg. eff. April 15, 1968; Laws 1972, c. 237, § 1, emerg. eff. April 7, 1972; Laws 1973, c. 206, § 3, operative July 1, 1974; Laws 1974, c. 312, § 1, emerg. eff. June 1, 1974; Laws 1975, c. 1, § 2, emerg. eff. Feb. 4, 1975; Laws 1976, c. 266, § 1, emerg. eff. June 17, 1976; Laws 1989, c. 249, § 18, eff. July 1, 1989; Laws 1998, c. 301, § 2, eff. Nov. 1, 1998; Laws 2003, c. 472, § 11.
NOTE: Laws 2003, c. 408, § 1 repealed by Laws 2004, c. 5, § 63, emerg. eff. March 1, 2004.
§68808. Determining net estate Deductions.
For the purpose of determining the net estate and transfers there shall be deducted from the value of the gross estate, as provided in Section 807 of this title, the following amounts and no others:
(a) All debts of the decedent, taxes on real property within this state which are a lien at the date of the decedent's death and taxes on the personal property which were a personal obligation of the decedent during his lifetime or a lien upon such personal property at the date of death.
(b) State and federal income taxes on the income of the decedent to the date of death and unpaid federal gift taxes on gifts made by the decedent.
(c) Death duties, estate or inheritance taxes paid or payable to foreign countries or other states and territories on intangible personal property included in the gross estate of the decedent, provided that federal estate taxes upon the decedent's estate shall not be deducted.
(d) Special assessments which are due and which are a lien upon taxable property located within the state.
(e) Funeral expenses, all amounts actually expended in the last sickness for the care of the deceased which are proven and allowed by the court having jurisdiction of the settlement of said estate or by the Tax Commission. Provided, that the amount actually expended for a burial lot or crypt or a mausoleum not exceeding One Thousand Dollars ($1,000.00) and any amount actually expended for a tombstone, monument or marker not exceeding the sum of Five Hundred Dollars ($500.00) shall be included.
(f) Commissions of executors and administrators not in excess of the statutory fees and allowances actually allowed by the court and paid.
(g) The costs of administration, including reasonable attorney's fees allowed by the court and paid, documentary stamps purchased for deed recordation, auction fees, and abstract costs.
(h) All transfers, gifts or bequests made in good faith to, or in trust for, the use, benefit or support of any charitable, educational or religious institution or agency, or nonprofit medical research foundation, or to nonprofit organizations devoted exclusively to youth programs emphasizing physical fitness, character development, and citizenship training, such as the Girl Scouts or Boy Scouts of America, incorporated or operating either
(1) Under the laws of this state or
(2) Under the laws of another state or territory, if at the time of the transfer either
a. Such other state or territory did not impose any transfer or death tax of any character in respect to property transferred to a similar institution, agency, foundation, organization or trust incorporated or operating under the laws of this state, or
b. The laws of the other state or territory in which such institution, agency, foundation, organization or trust is incorporated or operating contained a reciprocal exemption provision under which property transferred to similar donees incorporated or operating under the laws of this state was exempt from all transfer or death taxes of any character provided this state allowed a similar exemption in regard to property transferred to a similar institution, agency, foundation, organization or trust incorporated or operating under the laws of such other state, or to, or in trust for, the education, support and relief of the poor, indigent, blind or crippled of this state.
Amended by Laws 1988, c. 312, § 1, eff. Nov. 1, 1988.
§68809. Exemptions to parents, children or descendants.
A. If any portion of the net estate, as herein determined, in excess of the deductions allowed in Section 808 of this title passes to the father, mother, child, child of husband or wife, adopted child or any lineal descendant of decedent or of such adopted child, there shall be deducted from such net estate the portion of the net estate passing to such person or persons to the extent of and not exceeding a total aggregate exemption in amounts as follows, and the tax shall be paid on the remainder at the rates herein set out:
1. For the estate of a decedent who dies before January 1, 1999, the exemption shall be One Hundred Seventy-five Thousand Dollars ($175,000.00);
2. For the estate of a decedent who dies on or after January 1, 1999, and before January 1, 2000, the exemption shall be Two Hundred Seventy-five Thousand Dollars ($275,000.00);
3. For the estate of a decedent who dies on or after January 1, 2000, and before January 1, 2001, the exemption shall be Four Hundred Seventy-five Thousand Dollars ($475,000.00);
4. For the estate of a decedent who dies on or after January 1, 2001, and before January 1, 2002, the exemption shall be Six Hundred Seventy-five Thousand Dollars ($675,000.00);
5. For the estate of a decedent who dies on or after January 1, 2002, and before January 1, 2004, the exemption shall be Seven Hundred Thousand Dollars ($700,000.00);
6. For the estate of a decedent who dies on or after January 1, 2004, and before January 1, 2005, the exemption shall be Eight Hundred Fifty Thousand Dollars ($850,000.00);
7. For the estate of a decedent who dies on or after January 1, 2005, and before January 1, 2006, the exemption shall be Nine Hundred Fifty Thousand Dollars ($950,000.00); and
8. For the estate of a decedent who dies on or after January 1, 2006, the exemption shall be One Million Dollars ($1,000,000.00).
B. 1. In addition to the exemption provided pursuant to subsection A of this section, for the estate of a decedent who dies on or after January 1, 1997, there shall be deducted the value of the assets used in a qualifying family business or farm passing to one or more qualifying heirs of the decedent to the extent of and not exceeding a total aggregate exemption of the amounts specified in this subsection. The additional exemption shall be in an amount as follows:
a. for the estate of a decedent who dies before January 1, 1999, the exemption shall be Four Hundred Twenty-five Thousand Dollars ($425,000.00),
b. for the estate of a decedent who dies on or after January 1, 1999, and before January 1, 2000, the exemption shall be Three Hundred Twenty-five Thousand Dollars ($325,000.00),
c. for the estate of a decedent who dies on or after January 1, 2000, and before January 1, 2001, the exemption shall be One Hundred Twenty-five Thousand Dollars ($125,000.00),
d. for the estate of a decedent who dies on or after January 1, 2001, no additional exemption shall be allowed.
2. For the estate of a decedent who dies prior to January 1, 2001, the total exemption allowed pursuant to subsection A of this section and this subsection shall not exceed a total of Six Hundred Thousand Dollars ($600,000.00) for any estate. For purposes of this subsection:
a. "assets of a qualifying family business or farm" means real or tangible personal property owned by a qualifying business or farm and used as a farm or for farming purposes, or in a trade or business other than farming,
b. "qualifying family business or farm" means any interest in a closely held family corporation, sole proprietorship, partnership, limited liability company, or other unincorporated family business engaged in the trade or business of farming or in a trade or business other than farming, where some or all of the assets thereof are held by a decedent or are held collectively by a decedent and one or more qualifying heirs of the decedent, provided the decedent, or at least one qualifying heir of the decedent, was receiving wages from the business or farm or was subject to the self employment tax on income earned from the business or farm on the date of the death of the decedent,
c. "closely held family corporation" means any corporation if at least fifty percent (50%) of the total combined voting power of all classes of stock entitled to vote, and at least fifty percent (50%) of all other classes of stock of the corporation are owned by the decedent and not more than ten (10) qualifying heirs, and
d. "qualifying heir" means any heir as set forth in subsection A of this section.
C. In order to qualify for the exemption provided in subsection B of this section, the estate of the decedent shall submit the appropriate tax returns or tax schedules of the qualifying family business or farm for the five (5) taxable years prior to the death of the decedent showing proof of continuous operation of the qualifying family business or farm. The qualifying family business or farm shall also be required to continue the business or farm for a period of five (5) years following the date of death of decedent and shall submit each taxable year the appropriate tax returns or tax schedules to the Oklahoma Tax Commission as proof of continuous operation of the business or farm. If evidence of continuous operation is not submitted, the qualified heirs shall be liable for twenty percent (20%) of the total estate tax which would have been due if the business or farm had not qualified for the exemption provided for in subsection B of this section for each year evidence of continuous operation is not submitted.
D. It is declared to be intended by this section that where a portion of the net estate passes to any of the parties named herein, no greater amount shall be deducted from the net estate than passes to such person or persons combined and that the exemption shall in no event exceed the amounts specified in this section, regardless of the amount of the estate that may pass to any or all of such person or persons; provided, that when the property comprising the estate of the decedent consists of property within and property without the state, only the percentage of the exemptions and deductions enumerated in this section, and in Section 808 of this title, shall be allowed as the ratio of the value of the estate within this state bears to the value of the entire estate.
Added by Laws 1965, c. 250, § 2. Amended by Laws 1973, c. 206, § 5, operative July 1, 1974; Laws 1975, c. 1, § 3, emerg. eff. Feb. 4, 1975; Laws 1981, c. 237, § 3, eff. Jan. 1, 1982; Laws 1996, c. 334, § 3, eff. Nov. 1, 1996; Laws 1998, c. 427, § 1, eff. Jan. 1, 1999.
§68810. Executors, administrators and others may borrow and pledge assets to pay tax.
(a) Any executor, administrator or other person required to pay a tax under this article is hereby authorized to borrow money equal to but not in excess of an amount sufficient to pay the tax due, including the principal, interest and penalties and such reasonable expenses as may be incident to the borrowing of the money and the mortgaging or pledging of the assets of the estate, and for this purpose, is authorized to mortgage or pledge any of the assets of the estate.
(b) Any contract for the borrowing of money or the mortgaging or pledging of the estate assets for the purpose stated must have the approval of the judge of the district court having jurisdiction of the settlement of the estate. Such authority shall be granted and the procedure therefor shall be the same procedure as that provided for in 58 O.S.1961, Sections 385b 385d.
Laws 1965, c. 250, § 2.
§68-811. Lien of tax.
A. Taxes levied pursuant to the provisions of this article shall be and remain a lien upon all the property transferred until paid, except that such part of the gross estate as is used for the payment of charges against the estate and expenses of administration, allowed by the court having jurisdiction thereof, shall be divested of such lien. The person, corporation, or association to whom the property is transferred and the administrator, executor, and trustee of every estate so transferred who, before paying the tax, distributes or transfers any of said estate, to the extent of the value of the property at the time the tax became due, shall be personally liable for such tax until its payment. Every executor, administrator, or trustee shall have full power to sell or to convert into money so much of the property of the decedent or the property of any transferee subject to the tax as will enable him to pay such tax in the same manner as he might be entitled to do by law for the payment of other preferred and secured claims against the decedent.
B. If any executor, administrator, trustee, or other person serving in a fiduciary capacity shall make written application to the Oklahoma Tax Commission for a determination by the Tax Commission of the amount of the tax, and discharge from liability therefor, accompanied by an inventory of the estate prepared by such person showing the estate taxable pursuant to the provisions of this article, the Tax Commission, as soon as possible, and in any event within one (1) year from the date such application is filed, unless such time shall be extended by an order of the district court having jurisdiction of the estate, shall notify such executor, administrator, trustee, or other applicant of the amount of tax due. Upon payment of the amount of tax as determined by the Tax Commission, such executor, administrator, trustee, or other applicant shall be discharged from personal liability for any deficiency in tax thereafter found to be due, unless such additional tax thereafter found to be due shall arise by reason of a false or fraudulent inventory filed by such applicant. The applicant shall be entitled to a receipt in writing showing such discharge.
C. The provisions of subsection B of this section shall not operate as a release of any part of the gross estate from the lien for any tax that may thereafter be determined to be due unless the title to such part of the gross estate as shall have been reported to the Tax Commission by the executor, administrator, trustee, or other person charged with the payment of the tax thereon shall have passed to a bona fide purchaser for value, in which case such part shall not be subject to a lien or any claim or demand for any such deficiency in tax, but the lien for such tax shall attach to the consideration received from such purchaser by the heirs, legatees, devisees, distributees, donees, or transferees.
D. No lien provided for in subsection A of this section shall attach to any property passing to a surviving spouse, either through the estate of the decedent, by joint tenancy, or otherwise. No order exempting estate tax liability shall be necessary to authorize the release of such property by any safe deposit company, trust company, bank, or other financial institution to such surviving spouse, or for the title of real property passing to such surviving spouse to be marketable.
E. The lien provided for in subsection A of this section is extinguished upon the expiration of ten (10) years from the date of the death of the decedent, unless prior thereto steps have been taken that would cause the fact that a lien is asserted to appear of record in the county wherein the property is located.
Added by Laws 1965, c. 250, § 2. Amended by Laws 1984, c. 231, § 3, eff. Nov. 1, 1984; Laws 1988, c. 312, § 2, eff. Nov. 1, 1988; Laws 2004, c. 535, § 2, eff. Nov. 1, 2004.
§68812. Safe deposit companies, trust companies, banks and others holding decedent's assets Release of deposits.
A. 1. When the president or managing officer of a safe deposit company, trust company, bank, or other financial institution operating in this state, or person or persons, holding securities or assets of a decedent who was a resident of this state receives actual notice, from the person or persons entitled or claiming to be entitled to the securities or assets, from a source deemed reliable by the safe deposit company, trust company, bank, or other financial institution or from the Oklahoma Tax Commission, of the death of the decedent, such safe deposit company, trust company, bank, or other financial institution operating in this state, or person or persons, holding securities or assets of such decedent shall not deliver or transfer the same except as provided for in subsection (d) of Section 811 of this title, to the beneficiary or joint survivor, executor, administrator, or legal representatives of the decedent, or upon their order or request, unless notice of the time and place of such intended transfer be served upon the Oklahoma Tax Commission at least ten (10) days prior to said transfer or delivery. No such safe deposit company, trust company, bank, or other financial institution, person or persons, shall deliver or transfer any securities or assets of the estate of a decedent except as provided for in subsection (d) of Section 811 of this title, without retaining a sufficient portion or amount thereof to pay any tax which may thereafter be assessed on account of the transfer of such securities or assets pursuant to the provisions of Section 801 et seq. of this title, unless the Oklahoma Tax Commission consents to such delivery or transfer in writing, and it shall be lawful for the Oklahoma Tax Commission, personally or by representative, to examine the securities or assets at the time of such delivery or transfer. Failure to serve such notice of transfer and to retain a sufficient portion of the amount to pay the tax provided for in this section, after having received actual notice of the death of the owner of any such securities or assets, shall render such safe deposit company, trust company, bank, or other financial institution, person or persons, liable for the payment of the tax.
2. In all cases, regardless of the aggregate amount of deposits of money in such safe deposit company, trust company, bank, or other financial institution:
a. to the credit of the decedent and any other person or persons not the spouse or a lineal descendant of the decedent, as joint tenants, or
b. to the credit of the decedent individually, with any other person or persons not the spouse or lineal descendant of the decedent as payable-on-death beneficiary or beneficiaries,
not more than Five Thousand Dollars ($5,000.00) or ninety percent (90%) of the amount of deposits of money, whichever is greater, may be released or paid out by such institutions without notifying the Oklahoma Tax Commission.
3. From deposits of money in such safe deposit company, trust company, bank, or other financial institution:
a. to the credit of the decedent and one or more lineal descendants as joint tenants, or
b. to the credit of the decedent individually with one or more lineal descendants as payable-on-death beneficiary or beneficiaries,
not more than Ten Thousand Dollars ($10,000.00) may be released or paid out by such institutions without notifying the Oklahoma Tax Commission, and a combined total of not more than One Hundred Seventy-five Thousand Dollars ($175,000.00) or ninety percent (90%) of the deposits, whichever is greater, including any previous release of money to such person or persons after decedent's death, may be released or paid out by such institutions ten (10) days after receipt of notification in writing to the Oklahoma Tax Commission.
4. Any funds held:
a. jointly by the decedent and the surviving spouse only, or
b. by the decedent individually with the surviving spouse as the only payable-on-death beneficiary,
without limit, may be released or paid out by such institutions without notifying the Tax Commission.
B. No safe deposit company, trust company, bank, or other financial institution, or an officer thereof, or person or persons holding securities or assets of a decedent, shall be held liable for the wrongful release of deposits within the limits of this section.
C. The restrictions of this section shall not be applicable to oil and gas producing monies, received after date of death, whether from royalties, working interests, overriding royalties or otherwise.
D. 1. This section shall not be applicable to deposit accounts and safe deposit boxes held by a trust other than a grantor trust. The restrictions of this section shall apply to a grantor trust upon the death of a grantor.
2. For purposes of this subsection, a "grantor trust" means a trust for which the grantor is the trustee or a co-trustee and the right to revoke the trust is retained by the grantor or a nonadverse party, or both. A grantor trust includes a trust where a husband and wife are the grantors and the husband or wife is the trustee or a co-trustee and either the husband or wife or a nonadverse party, or both, retain the right to revoke the trust.
3. a. In all cases, regardless of the aggregate amount of deposits of money in such safe deposit company, trust company, bank, or other financial institution to the credit of decedent's grantor trust, upon request of the trustee of the grantor trust, not more than Five Thousand Dollars ($5,000.00) or ninety percent (90%) of the amount of deposits of money, whichever is greater, may be released or paid out by such institution to a person or persons not the spouse or a lineal descendant of the decedent without notifying the Oklahoma Tax Commission.
b. From deposits of money in such safe deposit company, trust company, bank, or other financial institution to the credit of decedent's grantor trust, upon request of the trustee of the grantor trust as authorized under the terms of the grantor trust, not more than Ten Thousand Dollars ($10,000.00) in the aggregate may be released or paid out by such institutions to one or more lineal descendants of the decedent without notifying the Oklahoma Tax Commission and a combined total of not more than One Hundred Seventy-five Thousand Dollars ($175,000.00) in the aggregate or ninety percent (90%) of the deposits, whichever is greater, including any previous distributions to such person or persons after decedent's death, may be released or paid out to one or more lineal descendants of the decedent ten (10) days after receipt of notification in writing to the Oklahoma Tax Commission.
c. Any funds held to the credit of the decedent's grantor trust, if paid out or released by the trustee of the grantor trust as authorized under the terms of the grantor trust, to the surviving spouse of decedent, may be released or paid out without notifying the Oklahoma Tax Commission.
Added by Laws 1965, c. 250, § 2. Amended by Laws 1974, c. 179, § 1, emerg. eff. May 11, 1974; Laws 1975, c. 150, § 1, emerg. eff. May 20, 1975; Laws 1979, c. 173, § 12; Laws 1980, c. 202, § 1, eff. Oct. 1, 1980; Laws 1984, c. 231, § 4, eff. Nov. 1, 1984; Laws 1992, c. 295, § 9, eff. July 1, 1992; Laws 1993, c. 110, § 1, eff. Sept. 1, 1993; Laws 1996, c. 334, § 4, eff. Nov. 1, 1996; Laws 2001, c. 358, § 12, eff. July 1, 2001.
§68813. Corporations, associations, jointstock companies and trusts.
All corporations, associations, jointstock companies, or trusts, whose ownership is held or represented by shares, which do business within this state, shall keep a record at some convenient place within this state showing the ownership of the stock, shares, indebtedness, bonds, or other pecuniary interest in the corporation, association, jointstock company, or trust, and if it shall come to their notice that the record owner thereof is dead, they, before making a transfer of any of such stock or paying any dividends due thereon or paying any indebtedness on bonds due by it or the delivery of any such property, shall make a report of such matter to the Oklahoma Tax Commission and secure a waiver from it before such transfer or payment is made except as provided for in subsection (d) of Section 811 of this title. If the corporation, association, jointstock company, or trust fails to give notice of such transfer and obtain a waiver of the Tax Commission therefor and there is a tax due upon the value of the transfer of such stock or other pecuniary interest, the corporation, association, jointstock company, or trust shall be personally liable for such tax, and the collection thereof may be enforced as any other debt against such corporation, association, jointstock company, or trust.
Amended by Laws 1984, c. 231, § 5, eff. Nov. 1, 1984.
§68814. County court Sale of property Notice to creditor Appraisal.
Except as herein provided, the judge of the district court of every county in this state having jurisdiction of the settlement of the estate of any decedent, to appoint a trustee of any estate or any part thereof, or to give ancillary letters thereon, shall have jurisdiction and it shall be his duty, when application is made therefor by any interested party or by the Tax Commission, to issue orders of sale of any property subject to the payment of the tax and to do any act in relation thereto authorized by law to be done by the district court in other matters or proceedings coming within its jurisdiction, and, except as herein provided, such proceedings shall be governed by the procedure provided in probate matters. In addition thereto, said judge of the district court, at the time of the issuance of letters to any administrator or executor, shall require by order that such administrator, executor or trustee immediately give notice to creditors, as provided by law, and that such administrator, executor, and the trustee holding said estate or the beneficaries of any transfer within ninety (90) days therefrom, unless the time be extended by the court for good cause shown, file with the court clerk a detailed inventory of the property transferred, or held in trust, in said estate and all transfers made in contemplation of death, including the homestead, and all exempt property which has come to their knowledge, and the district court shall thereupon have the same appraised as provided by law and shall furnish a copy of such appraisement to the Tax Commission.
Laws 1965, c. 250, § 2.
§68-815. Return by fiduciaries.
A. 1. The executor, administrator, trustee, devisee, heir or transferee shall within nine (9) months after the date of death of the decedent, unless the time has been extended by the Oklahoma Tax Commission, make a detailed return, verified by affidavit, to the Tax Commission upon forms furnished by it, giving all the information called for or that may be necessary to determine the value of the net estate. The provisions of this subsection shall not apply to estates exempt from filing such return by the provisions of subsections D, E and F of this section.
2. For estate tax returns filed pursuant to this section, an extension of time to file the return may be granted for a period not to exceed six (6) months. The request for the extension shall be made to the Tax Commission before the expiration of the normal filing period as allowed pursuant to paragraph 1 of this subsection.
B. Upon receipt of such return, the Tax Commission may, for the purpose of determining the value of the estate or any transfer, audit the books of account and records of any executor, administrator, trustee, devisee, heir, corporation, bank, trust company or transferee, and may appraise the property transferred or returned and investigate and include any property or transfers which may have been omitted from the return and shall thereupon compute, and by order assess, the tax, together with any interest or penalty which it may find to be due, and shall forthwith notify the administrator, executor, trustee or transferee and such person's attorney of record of such assessment by furnishing a detailed statement of the values of the estate or transfers, as fixed by the Tax Commission, and the amount of tax assessed. Such notice may be delivered in person or may be by mail addressed to such administrator, executor, trustee, transferee and such person's attorney of record at the last-known post office addresses, with the postage thereon prepaid, and upon receipt of such notice of assessment, the administrator, executor, trustee, devisee, heir or transferee liable for such tax shall pay the tax to the Tax Commission as provided herein. Provided, however, that if upon receipt of such notice the administrator, executor, or trustee or any party interested is dissatisfied with such findings or assessment or any appraisement made by the Tax Commission, such person shall, within sixty (60) days from the date of mailing of such notice, file with the Tax Commission an objection, in writing, specifically setting forth the grounds of the objections, and thereupon the Tax Commission may grant a hearing, and upon such hearing may adjust the matters in controversy and correct the assessment as justice may require. Provided further, the administrator, executor, trustee or any interested party who finds, within one (1) year from the date of mailing of the notice, an error of omission or inclusion of property on return, may file in writing, an objection with the Tax Commission specifically setting forth the grounds of the objection, and thereupon the Tax Commission shall grant a hearing, and upon such hearing shall adjust the matters in controversy and add to or delete from the return such property as justice may require.
An administrator, executor, trustee or any interested party who fails to file an objection within the sixty-day time period prescribed by this section may, within one (1) year from the date of mailing of the notice, request the Tax Commission to adjust or abate the assessment for reasons other than an error of omission or inclusion of property on return, if the administrator, executor, trustee or any interested party can demonstrate, by a preponderance of the evidence, that the assessment or some portion thereof is clearly erroneous. If the Tax Commission determines that the proper showing has been made, the assessment or portion thereof determined to be clearly erroneous shall be deemed not to have become final and absolute. No hearing to adjust or abate a clearly erroneous assessment may be granted after the denial by the Tax Commission of such a request. An order of the Tax Commission denying a request of an administrator, executor, trustee or any interested party to adjust or abate an assessment alleged to be clearly erroneous is not an appealable order under Section 225 of this title. No proceeding instituted by the Tax Commission to collect a tax liability may be stayed because of a request made by a taxpayer to adjust or abate an assessment alleged to be clearly erroneous.
C. No assessment of inheritance, estate or transfer tax shall be made hereunder subsequent to the lapse of ten (10) years after the date of the death of any decedent, except that this time limitation on the making of assessments and the beginning of proceedings for collection shall not affect or apply to assessments of inheritance, estate, transfer or gift taxes upon the estates of restricted Indians. If an estate tax return is filed as required by law, additional assessment may be made based upon unreported assets of the estate if such assessment is made not later than ten (10) years from the date of death of the decedent; provided, however, such additional assessment shall be made and any lien applicable thereto shall attach only against such unreported assets.
D. When all the property, both real and personal, of a decedent passes to the surviving spouse, no estate tax return shall be required and no order from the Tax Commission exempting such estate, the executor, administrator or beneficiary from payment of estate tax shall be necessary for any purpose, unless there are taxes due under the provisions of Section 804 of this title. However, an estate tax return or affidavit in a form provided by the Tax Commission may be filed which indicates that all the property of the decedent passes to the surviving spouse, and the Tax Commission, upon being satisfied from an examination of the return or affidavit and any other information available to it that all of the property of the decedent passes to the surviving spouse, shall issue an order exempting as nontaxable all property included in such decedent's estate.
E. When an order releasing estate tax liability is obtained from the district court, as provided in this act, no estate tax return shall be required and no order from the Tax Commission exempting such estate, the executor, administrator or beneficiaries from the payment of estate tax shall be necessary for any purpose for any property described in such order of the district court.
F. When all the property, both real and personal, of a decedent passes to the father, mother, child, child of husband or wife, adopted child or any lineal descendant of decedent or of such adopted child and the net estate is equal to or less than the applicable exemption provided in Section 809 of this title, a simplified return or affidavit, on a form prescribed by the Tax Commission, may be filed in lieu of the return required in subsection A of this section. The return shall contain sufficient information to determine that all the property of the decedent passes to one or more of the persons listed in this subsection and that the value of the net estate is equal to or less than the applicable exemption provided in Section 809 of this title. The Tax Commission, upon being satisfied from an examination of the return or affidavit and any other information available to it, shall issue an order exempting as nontaxable all property included in such decedent's estate.
G. The provisions of this section or Section 205 of this title shall not prevent the Tax Commission from delivering, upon written request, to a duly authorized representative of the taxpayer, or any individual who has judicially been determined to be an heir, devisee, or legatee of the taxpayer by a court of competent jurisdiction, or any individual named as a beneficiary of a trust of the taxpayer, a copy of any return exclusive of distribution schedule, any order assessing tax or any other paper or report filed or issued pursuant to the provisions of Sections 801 et seq. of this title.
Added by Laws 1965, c. 250, § 2. Amended by Laws 1980, c. 207, § 1, emerg. eff. May 29, 1980; Laws 1980, c. 286, § 4, eff. Oct. 1, 1980; Laws 1988, c. 312, § 3, eff. Nov. 1, 1988; Laws 1989, c. 249, § 19, eff. July 1, 1989; Laws 1993, c. 102, § 1, eff. Sept. 1, 1993; Laws 1994, c. 278, § 10, eff. Sept. 1, 1994; Laws 1996, c. 334, § 5, eff. Nov. 1, 1996; Laws 2003, c. 472, § 12; Laws 2004, c. 535, § 3, eff. Nov. 1, 2004.
§68-815.1. Time for completing audit of estate tax returns - Failure to complete audit.
The Tax Commission shall complete its audit of any completed estate tax return filed with it within ninety (90) days from the date the return is filed, except where the return shows the amount of tax to be in excess of Five Hundred Dollars ($500.00). If the audit be not completed and notice of the findings of the Tax Commission forwarded to the person filing the return within the times above specified the amount of tax due as shown on the return shall be deemed correct, and upon request, the Tax Commission shall issue its order disclaiming any further interest as to estate, inheritance and transfer taxes in the estate listed in the return.
Added by Laws 1968, c. 396, § 2, emerg. eff. May 17, 1968. Amended by Laws 1980, c. 207, § 2, eff. Oct. 1, 1980; Laws 1994, c. 278, § 11, eff. Sept. 1, 1994.
§68816. Appraisements Election by executor.
A. Any and all appraisements of property provided by this article shall be made at the fair cash market value of the property transferred as of the date of the death of the decedent, and the term "fair cash market value," as used herein, is hereby declared to mean the value and price at which the property transferred would change hands between a willing buyer and a willing seller, both being free of any compulsion to buy or sell, and the locally assessed value of such property shall not be the criterion of the fair cash market value of such property, but all appraisements for estate, inheritance, gift or transfer tax purposes under the provisions of this article shall be made independently of the locally assessed value for ad valorem tax, at the full one hundred percent (100%) fair cash market value of such property as the measures of applying the provisions of this article.
B. 1. The value of the gross estate may be determined, if the executor so elects, by valuing all the property included in the gross estate as follows:
(a) In the case of property distributed, sold, exchanged or
otherwise disposed of, within six (6) months after the
decedent's death such property shall be valued as of the
date of distribution, sale, exchange or other disposition; (b) In the case of property not distributed, sold, exchanged
or otherwise disposed of, within six (6) months after the
decedent's death such property shall be valued as of the
date six (6) months after the decedent's death;
(c) Any interest or estate which is affected by mere lapse of
time shall be included at its value as of the time of death (instead of the later date) with adjustment for any
difference in its value as of the later date not due to mere lapse of time.
2. No deduction under this article of any item shall be allowed if allowance for such item is in effect given by the alternate valuation provided by this section. Wherever in any other subsection or section of this article reference is made to the value of property at the time of the decedent's death, such reference shall be deemed to refer to the value of such property used in determining the value of the gross estate. In case of an election made by the executor under this section then for purposes of the charitable deduction under Section 808 (h) any bequest, legacy, devise or transfer enumerated therein, shall be valued as of the date of the decedent's death with adjustment for any difference in value, not due to mere lapse of time or the occurrence or nonoccurrence of a contingency, of the property as of the date six (6) months after the decedent's death, substituting, in the case of property distributed by the executor or trustee, or sold, exchanged or otherwise disposed of, during such sixmonth period, the date thereof.
3. The election provided for in this section shall be exercised by the executor on his return if filed within the time prescribed by law or before the expiration of any extension of time granted pursuant to law for the filing of the return.
Laws 1965, c. 250, § 2; Laws 1973, c. 206, § 6, operative July 1, 1974.
§68816.1. United States bonds or other obligations Valuation.
Any bonds of the United States, savings notes or other obligations which, upon the date of death of a decedent, constitute a part of his estate, and which may be and are received, by the United States at par and accrued interest, in payment of any estate or inheritance taxes or any other tax liability imposed by the United States shall for Oklahoma estate tax purposes be valued in such estate at the amount for which same are used in payment of any such Federal tax liability.
Laws 1969, c. 149, § 1, emerg. eff. April 14, 1969.
§68817. Appraisal made when Method of determining value.
Whenever a transfer of property is made upon which there is, or in any contingency may be, a tax imposed or levied, such property shall be appraised at its full value immediately upon transfer or as soon thereafter as practicable. The value of every future or limited estate, income, interest or annuity dependent upon life or lives in being shall be determined by the rule, method and standard of mortality and value employed in ascertaining the value of policies of life insurance and annuities for the determination of liabilities of life insurance companies, using the American Experience Table of Mortality, except that the rate of interest for making such computation shall be five percent (5%) per annum.
Laws 1965, c. 250, § 2.
§68818. Nonresidents, estate of.
In the absence of administration in this state upon the estate of a nonresident, the Tax Commission may, on its own motion or at the request of an executor or administrator duly appointed and qualified in the state of the domicile of the decedent or of a grantee under a conveyance made during the grantor's lifetime and upon satisfactory evidence or return furnished by such executor, administrator, or grantee, determine whether or not any property or transfer of property made by said decedent within this state is subject to a tax under the provisions of this article, and, if so, may determine from such return and other evidence the amount of such tax and adjust the same with such executor, administrator, grantee or transferee and for that purpose may appoint an appraiser to appraise said property. The expense of such appraisal shall be charged upon said property in addition to the tax and upon consideration of the return, the report of the appraiser or any other evidence before it, the Tax Commission shall determine the value of said estate or transfer which is taxable and by order assess the tax thereon, giving notice thereof to such executor, administrator, grantee or transferee, and thereupon the same proceedings may be had or taken as is provided by Section 815 of this article. The tax and penalty assessed shall until paid be and remain a lien upon the property superior to all other liens, except mortgages or other liens of record at the time of the death of the person whose estate is subject to the tax, and such lien may be foreclosed in any court of competent jurisdiction.
Laws 1965, c. 250, § 2.
§68819. Proceedings where no administration is had.
Where the Tax Commission has reason to believe that there are transfers or estates taxable under this article or any other inheritance or transfer tax law of this state in connection with which no proceedings have been had to determine same or where there is any omitted property or transfer or the disallowance of any charge claimed as a deduction, the Tax Commission shall have jurisdiction to require the filing of returns, to make audits, to examine the records of any bank, corporation, association or individual holding assets of the decedent, to ascertain by appraisement or otherwise the amount of the tax or additional tax due and the parties liable therefor, and shall, after giving notice to the parties interested, assess said inheritance, transfer or estate tax, require payment of same and grant acquittances, releases of liens and waivers of transfers to the same extent as might have been done by the officers or courts charged with the assessment and collection of such tax at the time it accrued. The remedies afforded by this section shall be cumulative and shall not restrict or abrogate any remedy or procedure under other laws.
Laws 1965, c. 250, § 2.
§68820. County and state officers to cooperate with Tax Commission Reports.
The judge of the county court, the court clerk and all other district and state officers shall fully cooperate with the Tax Commission in the enforcement of this article and shall furnish without cost to the State of Oklahoma any information or report or the copy of any instrument on file in their office that may be required by the Tax Commission in the determination of the tax provided for by this article. The willful failure or refusal to furnish such report or information or the failure to perform any duty enjoined upon them by this article, by which the state is deprived of any tax or right defined by this article, shall constitute malfeasance in office.
Laws 1965, c. 250, § 2.
§68821. Estates not taxable Order exempting estate Final account or order of distribution invalid unless tax is paid.
(a) In all cases involving estates which are not taxable under the terms of this article and where no order releasing estate tax liability has been issued by the district court, the Tax Commission if requested shall issue its order exempting such estate and the executor, administrator and beneficiaries from the payment of any estate tax. Before issuing such order, the Tax Commission may require a tax return to be filed. Such order shall contain the valuation of the estate, the deductions which have been allowed and may give the reason for the finding of the Tax Commission. The order shall be under the seal of the Tax Commission, and a copy thereof may be filed with the judge of the district court and considered in the allowance and settlement of any final account. Such order shall be furnished by the Tax Commission without cost to the estate or beneficiaries. The Tax Commission may issue a duplicate order, showing there is no tax due upon any particular parcel or tract of real estate returned as an asset of the estate, to any person entitled to such certificate under the provisions of this article, charging therefor a fee of fifty cents ($0.50).
(b) Except insofar as it affects property passing from a decedent to a surviving spouse, the allowance of any final account or order of distribution and discharge of the administrator, executor, trustee and their bondsmen shall be invalid as against the state unless the district court shall have made an order releasing estate tax liability, and shall be set aside upon application of the Tax Commission unless the tax due under this article has been paid in full; and such administrator, executor, trustee or transferee liable for such tax shall exhibit the receipt of the Tax Commission to the district court before said court shall make a final or partial distribution of the estate unless the court shall make an order releasing estate tax liability.
Amended by Laws 1984, c. 231, § 6, eff. Nov. 1, 1984.
§68822. "Death taxes" include what Fiduciary to file proof of payment Certificate Final account allowed when Nonresident decedents Liberal construction.
(a) The terms "death tax" and "death taxes," as used in this section, shall include inheritance, succession, transfer and estate taxes, and any taxes levied against the estate of a decedent upon the occasion of his death.
(b) At any time before the expiration of fifteen (15) months after the qualification in any district court in this state of any executor of the will or administrator of the estate of any nonresident decedent, such executor or administrator shall file with such court proof that all death taxes, together with interest or penalties thereon, which are due to the state of domicile of such decedent, or to any political subdivision thereof, have been paid or secured, or that no such taxes, interest or penalties are due, as the case may be, unless it appears that letters testamentary or of administration have been issued on the estate of such decedent in the state of his domicile, in the four following paragraphs called the domiciliary state.
(c) The proof required by paragraph (b) may be in the form of a certificate issued by the official or body charged with the administration of the death tax laws of the domiciliary state. If such proof has not been filed within the time limited in paragraph (b) and if within such time it does not appear that letters testamentary or of administration have been issued in the domiciliary state, the register of probate shall forthwith upon the expiration of such time notify by mail the official or body of the domiciliary state charged with the administration of the death tax laws thereof with respect to such estate, and shall state in such notice so far as is known to him (1) the name, date of death and last domicile of such decedent, (2) the name and address of each executor or administrator, (3) a summary of the values of the real estate, tangible personalty, and intangible personalty, wherever situated, belonging to such decedent at the time of his death, and (4) the fact that such executor or Administrator has not filed theretofore the proof required in paragraph (b). Such register shall attach to such notice a plain copy of the will and codicils of such decedent, if he dies testate, or, if he died intestate, a list of his heirs and next of kin, so far as is known to such register. Within sixty (60) days after the mailing of such notice the official or body charged with the administration of the death tax laws of the domiciliary state may file with such district court in this state a petition for an accounting in such estate, and such official or body of the domiciliary state shall, for the purposes of this Section, be a party interested for the purpose of petitioning such district court for such accounting. If such petition be filed within said period of sixty (60) days, such district court shall decree such accounting, and upon such accounting being filed and approved shall decree either the payment of any such tax found to be due to the domiciliary state or subdivision thereof or the remission to a fiduciary appointed or to be appointed by the district court, or other court charged with the administration of estates of decedents, of the domiciliary state, of the balance of the intangible personalty after the payment of creditors and expenses of administration in this state.
(d) No final account of an executor or administrator of a nonresident decedent shall be allowed unless either (1) proof has been filed as required by paragraph (b), or (2) notice under paragraph (c) has been given to the official body charged with the administration of the death tax laws of the domiciliary state, and such official or body has not petitioned for an accounting under said paragraph within sixty (60) days after the mailing of such notice, or (3) an accounting has been had under said paragraph (c), a decree has been made upon such accounting and it appears that the executor or administrator has paid such sums and remitted such securities, if any, as he was required to pay or remit by such decree, or (4) it appears that letters testamentary or of administration have been issued by the domiciliary state and that no notice has been given under said paragraph (c).
(e) Paragraphs (a) to (d), inclusive, shall apply to the estate of a nonresident decedent, only in case the laws of the domiciliary state contain a provision, of any nature or however expressed, whereby this state is given reasonable assurance, as finally determined by the Tax Commission, of the collection of its death taxes, interest and penalties from the estates of decedents dying domiciled in this state, when such estates are administered in whole or in part by a district court, or other court charged with the administration of estates of decedents, in such other state.
(f) The provisions of paragraphs (a) to (e), inclusive, shall be liberally construed in order to ensure that the domiciliary state of any nonresident decedent whose estate is administered in this state shall receive any death taxes, together with interest and penalties thereon, due to it from the estate of such decedent.
Laws 1965, c. 250, § 2.
§68823. Letters of administration Application for by State.
Application for letters of administration may be made by the State of Oklahoma, on relation of the Attorney General, to the district court of any county in this state, in which actions may be maintained against any corporation, association, joint stock company or trust association, when it is shown by such application that any stockholder, in any such corporation, association, joint stock company or trust association or any other person has died, out of the state, owning any such stock or other property in such county, subject to the estate, inheritance or transfer tax laws of this state.
Laws 1965, c. 250, § 2.
§68824. Hearings Appointment of administrators Determination of tax.
When application is made, as set out in the preceding section, the district court, upon notice as now provided by law for appointment of an administrator, shall hear said application, and in all cases where it is made to appear that a tax is due the State of Oklahoma, from said estate, shall appoint some suitable person as administrator of said estate for the purpose of making an inventory of the assets of said estate; whereupon, the amount of inheritance or transfer tax due thereon shall be determined and fixed by order of said court, as provided by law.
Laws 1965, c. 250, § 2.
§68825. Table for computing estate tax.
A. The following table shall be used in computing taxes upon the net taxable estate and transfers, subject to the tax rates provided in paragraph 1 of Section 803 of this Article, as amended:
Rate of
Tax
on Excess
Taxable Estate Over Amount
Equal to or Taxable Estate Tax on Amount in
More than Less than in Column 1 Column 1
$ 0 $10,000.00 $ 0 0.5%
10,000.00 20,000.00 50.00 1%
20,000.00 40,000.00 150.00 1.5%
40,000.00 60,000.00 450.00 2%
60,000.00 100,000.00 850.00 2.5%
100,000.00 250,000.00 1,850.00 3%
250,000.00 500,000.00 6,350.00 6.5%
500,000.00 750,000.00 22,600.00 7%
750,000.00 1,000,000.00 40,100.00 7.5%
1,000,000.00 3,000,000.00 58,850.00 8%
3,000,000.00 5,000,000.00 218,850.00 8.5%
5,000,000.00 10,000,000.00 388,850.00 9%
10,000,000.00 838,850.00 10%
The total tax shall be the tax imposed at the rates under this article plus any additional tax imposed by Section 804 of this code. To determine from the above schedule the amount of tax due on any given net taxable estate passing to a lineal heir, take the specified amount in column 1 nearest the value of the decedent's estate, but less than such value in column 2, and set out the amount of tax therein as indicated in column 3. Upon the remainder, the tax is computed at the rate shown in column 4. These two amounts of tax added together equal the tax due for lineal heirs.
Thus, for example, on a net estate passing to lineal heirs of $267,525.00, the total tax would be computed as follows:
Tax
$250,000.00 (Amount in column 1 but less than
amount in column 2) $6,350.00
17,525.00 (Balance of net taxable estate,
at 6.5%) 1,139.13
$267,525.00 (Total net taxable estate)
Total Tax $7,489.13
B. The following table shall be used in computing taxes upon the net taxable estate and transfers subject to the tax rates provided in paragraph 2 of Section 803 of this article, as amended:
Rate of
Tax
on Excess
Taxable Estate Over Amount
Equal to or Taxable Estate Tax on Amount in
More than Less than in Column 1 Column 1
$ 0 $ 10,000.00 $ 0 1%
10,000.00 20,000.00 100.00 2%
20,000.00 40,000.00 300.00 3%
40,000.00 60,000.00 900.00 4%
60,000.00 100,000.00 1,700.00 5%
100,000.00 250,000.00 3,700.00 6%
250,000.00 500,000.00 12,700.00 13%
500,000.00 1,000,000.00 45,200.00 14%
1,000,000.00 115,200.00 15%
The total tax shall be the tax imposed at the rates under this article plus any additional tax imposed by Section 804 of this code. To determine from the above schedule the amount of tax due on any given net taxable estate passing to a collateral heir, take the specified amount in column 1 nearest the value of the estate passing to the collateral heir, but less than such value in column 2, and set out the amount of tax thereon as indicated in column 4. Upon the remainder, the tax is computed at the rate shown in column 4. These two amounts of tax added together equal the tax due for collateral heirs.
Thus, for example, on a net estate passing to collateral heirs of $242,000.00, the tax due would be computed as follows:
Tax
$100,000.00 (Amount in column 1 but less
than amount in column 2) $ 3,700.00
142,000.00 (Balance of taxable estate at 6%) 8,520.00
$242,000.00 (Total net taxable estate)
Total tax 12,220.00
If the estate passes to lineal heirs and also collateral heirs, determine the tax separately as to each under A and B above as if there were two estates. These two amounts of tax would be equal the total tax due on the decedent's estate.
Unless the will otherwise provides, the tax shall be apportioned among lineal and collateral persons.
The tax on interests passing to collateral persons shall be apportioned in the proportion that the value of interest received by each collateral person bears to the total of the interests passing to all collateral persons.
The tax on interests passing to lineal persons shall be apportioned in the proportion that the value of interest received by each lineal person bears to the total of all interests passing to lineal persons.
The values used in determining the tax shall be used for that purpose.
§68-826. Repealed by Laws 2004, c. 535, § 16, eff. Nov. 1, 2004.
§68-827. Repealed by Laws 2004, c. 535, § 17, eff. Nov. 1, 2004.
§68-1001. Gross production tax on asphalt, ores, oil and gas, and royalty interests - Exemptions.
A. There is hereby levied upon the production of asphalt, ores bearing lead, zinc, jack, gold, silver and copper a tax equal to three-fourths of one percent (3/4 of 1%) on the gross value thereof.
B. 1. Effective January 1, 1999, through June 30, 2007, except as otherwise exempted pursuant to subsections D, E, F, G, H, I and J of this section, there is hereby levied upon the production of oil a tax as set forth in this subsection on the gross value of the production of oil based on a per barrel measurement of forty-two (42) U.S. gallons of two hundred thirty-one (231) cubic inches per gallon, computed at a temperature of sixty (60) degrees Fahrenheit. If the average price of Oklahoma oil as determined by the Oklahoma Tax Commission pursuant to the provisions of paragraph 3 of this subsection equals or exceeds Seventeen Dollars ($17.00) per barrel, then the tax shall be seven percent (7%). If the average price of Oklahoma oil as determined by the Tax Commission pursuant to paragraph 3 of this subsection is less than Seventeen Dollars ($17.00) but is equal to or exceeds Fourteen Dollars ($14.00) per barrel, then the tax shall be four percent (4%). If the average price of Oklahoma oil as determined by the Tax Commission pursuant to paragraph 3 of this subsection is less than Fourteen Dollars ($14.00) per barrel, then the tax shall be one percent (1%).
2. Effective July 1, 2007, except as otherwise exempted pursuant to subsections D, E, F, G, H, I and J of this section, there shall be levied upon the production of oil a tax equal to seven percent (7%) of the gross value of the production of oil based on a per barrel measurement of forty-two (42) U.S. gallons of two hundred thirty-one (231) cubic inches per gallon, computed at a temperature of sixty (60) degrees Fahrenheit.
3. Effective January 1, 1999, through June 30, 2007, the average price of Oklahoma oil for purposes of this section shall be computed by the Tax Commission based on the total value of oil reported each month that is subject to the tax levied under this section. At the first of each month, the Tax Commission shall compute the average price paid per barrel of oil reported on the monthly tax report for the most current production month on file. The average price as computed by the Tax Commission shall be used to determine the applicable tax rate for the third month following production. Effective July 1, 2002, through June 30, 2007, the average price of gas for purposes of this section shall be computed by the Tax Commission based on the total value of gas reported each month that is subject to the tax levied by this section. At the first of each month, the Tax Commission shall compute the average price paid per thousand cubic feet (mcf) of gas as reported on the monthly tax report for the most current production month on file. The average price as computed by the Tax Commission shall be used to determine the applicable tax rate for the third month following production.
4. Effective July 1, 2002, through June 30, 2007, except as otherwise exempted pursuant to subsections D, E, F, G, H, I and J of this section, there is hereby levied upon the production of gas a tax as set forth in this subsection on the gross value of the production of gas. If the average price of gas as determined by the Tax Commission pursuant to the provisions of paragraph 3 of this subsection equals or exceeds Two Dollars and ten cents ($2.10) per thousand cubic feet (mcf), then the tax shall be seven percent (7%). If the average price of gas as determined by the Tax Commission pursuant to the provisions of paragraph 3 of this subsection is less than Two Dollars and ten cents ($2.10) per thousand cubic feet (mcf) but is equal to or exceeds One Dollar and seventy-five cents ($1.75) per thousand cubic feet (mcf), then the tax shall be four percent (4%). If the average price of gas as determined by the Tax Commission pursuant to the provisions of paragraph 3 of this subsection is less than One Dollar and seventy-five cents ($1.75) per thousand cubic feet (mcf), then the tax shall be one percent (1%).
5. Effective July 1, 2007, except as otherwise exempted pursuant to subsections D, E, F, G, H, I and J of this section, there shall be levied a tax equal to seven percent (7%) of the gross value of the production of gas.
C. The taxes hereby levied shall also attach to, and are levied on, what is known as the royalty interest, and the amount of such tax shall be a lien on such interest.
D. 1. Except as otherwise provided in this section, any incremental production attributable to the working interest owners which results from an enhanced recovery project shall be exempt from the gross production tax levied pursuant to this section from the project beginning date until project payback is achieved for new enhanced recovery projects or until project payback is achieved but not to exceed a period of thirty-six (36) months for tertiary enhanced recovery projects existing on July 1, 1988. This exemption shall take effect July 1, 1988, and shall apply to enhanced recovery projects approved or having a project beginning date prior to July 1, 1993. Project payback pursuant to this paragraph for enhanced recovery projects qualifying for this exemption on or after July 1, 1990, and on or before June 30, 1993, shall be determined by appropriate payback indicators which will not include any expenses beyond the completion date of the well. Project payback pursuant to this paragraph for enhanced recovery projects qualifying for this exemption on or after October 17, 1987, and on or before June 30, 1990, shall be determined by appropriate payback indicators as previously established and allowed by the Tax Commission for projects qualifying during such period.
2. Except as otherwise provided in this section, for secondary recovery projects approved and having a project beginning date on or after July 1, 1993, and before July 1, 2000, any incremental production attributable to the working interest owners which results from such secondary recovery projects shall be exempt from the gross production tax levied pursuant to this section from the project beginning date until project payback is achieved but not to exceed a period of ten (10) years. Project payback pursuant to this paragraph shall be determined by appropriate payback indicators which will provide for the recovery of capital expenses and fifty percent (50%) of operating expenses, in determining project payback.
3. Except as otherwise provided in this section, for secondary recovery properties approved or having an initial project beginning date on or after July 1, 2000, and before July 1, 2006, any incremental production attributable to the working interest owners which results from such secondary recovery property shall be exempt from the gross production tax levied pursuant to this section for a period not to exceed five (5) years from the initial project beginning date or for a period ending upon the termination of the secondary recovery process, whichever occurs first.
4. Except as otherwise provided in this section, for tertiary recovery projects approved and having a project beginning date on or after July 1, 1993, and before July 1, 2006, any incremental production attributable to the working interest owners which results from such tertiary recovery projects shall be exempt from the gross production tax levied pursuant to this section from the project beginning date until project payback is achieved, but not to exceed a period of ten (10) years. Project payback pursuant to this paragraph shall be determined by appropriate payback indicators which will provide for the recovery of capital expenses and operating expenses, excluding administrative expenses, in determining project payback. The capital expenses of pipelines constructed to transport carbon dioxide to a tertiary recovery project shall not be included in determining project payback pursuant to this paragraph.
5. The provisions of this subsection shall also not apply to any enhanced recovery project using fresh water as the primary injectant, except when using steam.
6. For purposes of this subsection:
a. "incremental production" means the amount of crude oil or other liquid hydrocarbons which is produced during an enhanced recovery project and which is in excess of the base production amount of crude oil or other liquid hydrocarbons. The base production amount shall be the average monthly amount of production for the twelve-month period immediately prior to the project beginning date minus the monthly rate of production decline for the project for each month beginning one hundred eighty (180) days prior to the project beginning date. The monthly rate of production decline shall be equal to the average extrapolated monthly decline rate for the twelve-month period immediately prior to the project beginning date as determined by the Corporation Commission based on the production history of the field, its current status, and sound reservoir engineering principles, and
b. "project beginning date" means the date on which the injection of liquids, gases, or other matter begins on an enhanced recovery project.
7. The Corporation Commission shall promulgate rules for the qualification for this exemption which shall include, but not be limited to, procedures for determining incremental production as defined in subparagraph a of paragraph 6 of this subsection, and the establishment of appropriate payback indicators as approved by the Tax Commission for the determination of project payback for each of the exemptions authorized by this subsection.
8. For new secondary recovery projects and tertiary recovery projects approved by the Corporation Commission on or after July 1, 1993, and before July 1, 2006, such approval shall constitute qualification for an exemption.
9. Any person seeking an exemption shall file an application for such exemption with the Tax Commission which, upon determination of qualification by the Corporation Commission, shall approve the application for such exemption.
10. The Tax Commission may require any person requesting such exemption to furnish information or records concerning the exemption as is deemed necessary by the Tax Commission.
11. Upon the expiration of the exemption granted pursuant to this subsection, the Tax Commission shall collect the gross production tax levied pursuant to this section.
E. 1. Except as otherwise provided in this section, the production of oil, gas or oil and gas from a horizontally drilled well producing prior to July 1, 2002, which production commenced after July 1, 1995, shall be exempt from the gross production tax levied pursuant to subsection B of this section from the project beginning date until project payback is achieved but not to exceed a period of twenty-four (24) months commencing with the month of initial production from the horizontally drilled well. Except as otherwise provided in this section, the production of oil, gas or oil and gas from a horizontally drilled well producing prior to July 1, 2006, which production commenced after July 1, 2002, shall be exempt from the gross production tax levied pursuant to subsection B of this section from the project beginning date until project payback is achieved but not to exceed a period of forty-eight (48) months commencing with the month of initial production from the horizontally drilled well. Provided, any incremental production which results from a horizontally drilled well producing prior to July 1, 1994, shall be exempt from the gross production tax levied pursuant to subsection B of this section from the project beginning date until project payback is achieved but not to exceed a period of twenty-four (24) months commencing with the month of initial production from the horizontally drilled well. For purposes of subsection D of this section and this subsection, project payback shall be determined as of the date of the completion of the well and shall not include any expenses beyond the completion date of the well, and subject to the approval of the Tax Commission.
2. As used in this subsection, "horizontally drilled well" shall mean an oil, gas or oil and gas well drilled or recompleted in a manner which encounters and subsequently produces from a geological formation at an angle in excess of seventy (70) degrees from vertical and which laterally penetrates a minimum of one hundred fifty (150) feet into the pay zone of the formation.
F. 1. Except as otherwise provided by this section, the severance or production of oil, gas or oil and gas from an inactive well shall be exempt from the gross production tax levied pursuant to subsection B of this section for a period of twenty-eight (28) months from the date upon which production is reestablished. This exemption shall take effect July 1, 1994, and shall apply to wells for which work to reestablish or enhance production began on or after July 1, 1994, and for which production is reestablished prior to July 1, 2006. For all such production, a refund against gross production taxes shall be issued as provided in subsection L of this section.
2. As used in this subsection, for wells for which production is reestablished prior to July 1, 1997, "inactive well" means any well that has not produced oil, gas or oil and gas for a period of not less than two (2) years as evidenced by the appropriate forms on file with the Corporation Commission reflecting the well's status. As used in this subsection, for wells for which production is reestablished on or after July 1, 1997, and prior to July 1, 2006, "inactive well" means any well that has not produced oil, gas or oil and gas for a period of not less than one (1) year as evidenced by the appropriate forms on file with the Corporation Commission reflecting the well's status. Wells which experience mechanical failure or loss of mechanical integrity, as defined by the Corporation Commission, including but not limited to, casing leaks, collapse of casing or loss of equipment in a wellbore, or any similar event which causes cessation of production, shall also be considered inactive wells.
G. 1. Except as otherwise provided by this section, any incremental production which results from a production enhancement project shall be exempt from the gross production tax levied pursuant to subsection B of this section for a period of twenty-eight (28) months from the date of first sale after project completion of the production enhancement project. This exemption shall take effect July 1, 1994, and shall apply to production enhancement projects having a project beginning date on or after July 1, 1994, and prior to July 1, 2006. For all such production, a refund against gross production taxes shall be issued as provided in subsection L of this section.
2. As used in this subsection:
a. (1) for production enhancement projects having a project beginning date prior to July 1, 1997, "production enhancement project" means any workover as defined in this paragraph, recompletion as defined in this paragraph, or fracturing of a producing well, and
(2) for production enhancement projects having a project beginning date on or after July 1, 1997, and prior to July 1, 2006, "production enhancement project" means any workover as defined in this paragraph, recompletion as defined in this paragraph, reentry of plugged and abandoned wellbores, or addition of a well or field compression,
b. "incremental production" means the amount of crude oil, natural gas or other hydrocarbons which are produced as a result of the production enhancement project in excess of the base production,
c. "base production" means the average monthly amount of production for the twelve-month period immediately prior to the commencement of the project or the average monthly amount of production for the twelve-month period immediately prior to the commencement of the project less the monthly rate of production decline for the project for each month beginning one hundred eighty (180) days prior to the commencement of the project. The monthly rate of production decline shall be equal to the average extrapolated monthly decline rate for the twelve-month period immediately prior to the commencement of the project based on the production history of the well. If the well or wells covered in the application had production for less than the full twelve-month period prior to the filing of the application for the production enhancement project, the base production shall be the average monthly production for the months during that period that the well or wells produced,
d. (1) for production enhancement projects having a project beginning date prior to July 1, 1997, "recompletion" means any downhole operation in an existing oil or gas well that is conducted to establish production of oil or gas from any geological interval not currently completed or producing in such existing oil or gas well, and
(2) for production enhancement projects having a project beginning date on or after July 1, 1997, and prior to July 1, 2006, "recompletion" means any downhole operation in an existing oil or gas well that is conducted to establish production of oil or gas from any geologic interval not currently completed or producing in such existing oil or gas well within the same or a different geologic formation, and
e. "workover" means any downhole operation in an existing oil or gas well that is designed to sustain, restore or increase the production rate or ultimate recovery in a geologic interval currently completed or producing in the existing oil or gas well. For production enhancement projects having a project beginning date prior to July 1, 1997, "workover" includes, but is not limited to, acidizing, reperforating, fracture treating, sand/paraffin removal, casing repair, squeeze cementing, or setting bridge plugs to isolate water productive zones from oil or gas productive zones, or any combination thereof. For production enhancement projects having a project beginning date on or after July 1, 1997, and prior to July 1, 2006, "workover" includes, but is not limited to:
(1) acidizing,
(2) reperforating,
(3) fracture treating,
(4) sand/paraffin/scale removal or other wellbore cleanouts,
(5) casing repair,
(6) squeeze cementing,
(7) installation of compression on a well or group of wells or initial installation of artificial lifts on gas wells, including plunger lifts, rod pumps, submersible pumps and coiled tubing velocity strings,
(8) downsizing existing tubing to reduce well loading,
(9) downhole commingling,
(10) bacteria treatments,
(11) upgrading the size of pumping unit equipment,
(12) setting bridge plugs to isolate water production zones, or
(13) any combination thereof.
"Workover" shall not mean the routine maintenance, routine repair, or like for like replacement of downhole equipment such as rods, pumps, tubing, packers, or other mechanical devices.
H. 1. For purposes of this subsection, "depth" means the length of the maximum continuous string of drill pipe utilized between the drill bit face and the drilling rig's kelly bushing.
2. Except as otherwise provided in subsection K of this section:
a. the production of oil, gas or oil and gas from wells spudded between July 1, 1997, and July 1, 2005, and drilled to a depth of twelve thousand five hundred (12,500) feet or greater and wells spudded between July 1, 2005, and July 1, 2006, and drilled to a depth between twelve thousand five hundred (12,500) feet and fourteen thousand nine hundred ninety-nine (14,999) feet shall be exempt from the gross production tax levied pursuant to subsection B of this section from the date of first sales for a period of twenty-eight (28) months;
b. the production of oil, gas or oil and gas from wells spudded between July 1, 2002, and July 1, 2005, and drilled to a depth of fifteen thousand (15,000) feet or greater and wells spudded between July 1, 2005, and July 1, 2008, and drilled to a depth between fifteen thousand (15,000) feet and seventeen thousand four hundred ninety-nine (17,499) feet shall be exempt from the gross production tax levied pursuant to subsection B of this section from the date of first sales for a period of forty-eight (48) months; and
c. the production of oil, gas or oil and gas from wells spudded between July 1, 2002, and July 1, 2008, and drilled to a depth of seventeen thousand five hundred (17,500) feet or greater shall be exempt from the gross production tax levied pursuant to subsection B of this section from the date of first sales for a period of sixty (60) months.
3. Except as otherwise provided for in this subsection, for all such wells spudded, a refund against gross production taxes shall be issued as provided in subsection L of this section.
4. For all wells spudded after July 1, 2005, and which are exempt from gross production tax pursuant to subparagraphs b and c of paragraph 2 of this subsection, the amount of refunds paid by the Tax Commission shall be limited as follows:
a. for the fiscal year ending June 30, 2006, no claims for refunds shall be paid,
b. for the fiscal year ending June 30, 2007, the total amount of refunds paid shall be equal to or less than Seventeen Million Dollars ($17,000,000.00),
c. for the fiscal year ending June 30, 2008, the total amount of refunds paid shall be equal to or less than Twenty Million Dollars ($20,000,000.00), and
d. for the fiscal year ending June 30, 2009, and any fiscal year thereafter, the total amount of refunds paid each fiscal year shall be equal to or less than Twenty-five Million Dollars ($25,000,000.00).
5. Except as otherwise provided for in paragraph 7 of this subsection and paragraph 2 of subsection L of this section, for the fiscal year ending June 30, 2006, and each fiscal year thereafter, in order to qualify for a refund of gross production tax on wells which are exempt pursuant to subparagraphs b and c of paragraph 2 of this subsection, claims for refunds shall be filed within six (6) months after the first day of the fiscal year in which the refund is first available pursuant to subsection L of this section. When processing applications for qualification for an exemption as provided for in paragraph 2 of subsection M of this section, the Corporation Commission shall give priority to those applications filed for an exemption pursuant to subparagraphs b and c of paragraph 2 of this subsection in order for applicants to comply with the six-month filing period as provided for in this paragraph.
6. If the total amount of claims for refunds made during any fiscal year are greater than the total amount of refunds allowed for that fiscal year as provided for in paragraph 4 of this subsection, the Tax Commission shall proportionately reduce the amount of each claim so that the total amount of claims equal the total amount allowed for refunds.
7. If the total amount of claims for a refund filed within the six-month filing period for a fiscal year is less than the total amount of refunds allowed for that fiscal year as provided for in paragraph 4 of this subsection, the Tax Commission shall pay the claims that have been filed. Then for any remaining funds, the Tax Commission shall extend the claims-filing period for three (3) months and shall pay any claims filed during the extended filing period up to the total amount of remaining funds. If the amount of claims for refunds filed during the extended filing period is greater than the total amount of remaining funds, the Tax Commission shall proportionately reduce the amount of each claim as provided for in paragraph 6 of this subsection.
I. 1. Except as otherwise provided by this section, the production of oil, gas or oil and gas from wells spudded or reentered between July 1, 1995, and July 1, 2006, which qualify as a new discovery pursuant to this subsection shall be exempt from the gross production tax levied pursuant to subsection B of this section from the date of first sales for a period of twenty-eight (28) months. For all such wells spudded or reentered, a refund against gross production taxes shall be issued as provided in subsection L of this section. As used in this subsection, "new discovery" means production of oil, gas or oil and gas from:
a. (1) for wells spudded or reentered on or after July 1, 1997, a well that discovers crude oil in paying quantities that is more than one (1) mile from the nearest oil well producing from the same producing formation, and
(2) for wells spudded or reentered on or after July 1, 1997, and prior to July 1, 2006, a well that discovers crude oil in paying quantities that is more than one (1) mile from the nearest oil well producing from the same producing interval of the same formation,
b. (1) for wells spudded or reentered prior to July 1, 1997, a well that discovers crude oil in paying quantities beneath current production in a deeper producing formation that is more than one (1) mile from the nearest oil well producing from the same deeper producing formation, and
(2) for wells spudded or reentered on or after July 1, 1997, and prior to July 1, 2006, a well that discovers crude oil in paying quantities beneath current production in a deeper producing interval that is more than one (1) mile from the nearest oil well producing from the same deeper producing interval,
c. (1) for wells spudded or reentered prior to July 1, 1997, a well that discovers natural gas in paying quantities that is more than two (2) miles from the nearest gas well producing from the same producing formation, and
(2) for wells spudded or reentered on or after July 1, 1997, and prior to July 1, 2006, a well that discovers natural gas in paying quantities that is more than two (2) miles from the nearest gas well producing from the same producing interval, or
d. (1) for wells spudded or reentered prior to July 1, 1997, a well that discovers natural gas in paying quantities beneath current production in a deeper producing formation that is more than two (2) miles from the nearest gas well producing from the same deeper producing formation, and
(2) for wells spudded or reentered on and after July 1, 1997, and prior to July 1, 2006, a well that discovers natural gas in paying quantities beneath current production in a deeper producing interval that is more than two (2) miles from the nearest gas well producing from the same deeper producing interval.
2. The Corporation Commission shall deliver to the Legislature a report on the number of wells as defined by paragraph 1 of this subsection that are drilled and the amount of production from those wells. The first such report shall be delivered to the Legislature no later than February 1, 1997, and each February 1, thereafter, until the conclusion of the program.
J. Except as otherwise provided by this section, the production of oil, gas or oil and gas from any well, drilling of which is commenced after July 1, 2000, and prior to July 1, 2006, located within the boundaries of a three-dimensional seismic shoot and drilled based on three-dimensional seismic technology, shall be exempt from the gross production tax levied pursuant to subsection B of this section from the date of first sales as follows:
1. If the three-dimensional seismic shoot is shot prior to July 1, 2000, for a period of eighteen (18) months; and
2. If the three-dimensional seismic shoot is shot on or after July 1, 2000, for a period of twenty-eight (28) months.
For all such production, a refund against gross production taxes shall be issued as provided in subsection L of this section.
K. 1. The exemptions provided for in subsections F, G, I and J of this section, the exemption provided for in subparagraph a of paragraph 2 of subsection H of this section, and the exemptions provided for in subparagraphs b and c of paragraph 2 of subsection H of this section for production from wells spudded before July 1, 2005, shall not apply:
a. to the severance or production of oil, upon determination by the Tax Commission that the weighted average price of Oklahoma oil exceeds Thirty Dollars ($30.00) per barrel calculated on an annual calendar year basis,
b. to the severance or production of oil or gas upon which gross production taxes are paid at a rate of one percent (1%) pursuant to the provisions of subsection B of this section, and
c. to the severance or production of gas, upon determination by the Tax Commission that the weighted average wellhead price of Oklahoma gas exceeds Five Dollars ($5.00) per thousand cubic feet (mcf) calculated on an annual calendar year basis.
2. Notwithstanding the exemptions granted pursuant to subsections E, F, G, H, I and J of this section, there shall continue to be levied upon the production of petroleum or other crude or mineral oil or natural gas or casinghead gas, as provided in subsection B of this section, from any wells provided for in subsection E, F, G, H, I or J of this section, a tax equal to one percent (1%) of the gross value of the production of petroleum or other crude or mineral oil or natural gas or casinghead gas. The tax hereby levied shall be apportioned as follows:
a. fifty percent (50%) of the sum collected shall be apportioned to the County Highway Fund as provided in subparagraph b of paragraph 1 of Section 1004 of this title, and
b. fifty percent (50%) of the sum collected shall be apportioned to the appropriate school district as provided in subparagraph c of paragraph 1 of Section 1004 of this title.
Upon the expiration of the exemption granted pursuant to subsection E, F, G, H, I or J of this section, the provisions of this paragraph shall have no force or effect.
L. For all oil and gas production exempt from gross production taxes pursuant to subsections E, F, G, H, I and J of this section during a given fiscal year, a refund of gross production taxes shall be issued to the well operator or a designee in the amount of such gross production taxes paid during such period, subject to the following provisions:
1. A refund shall not be claimed until after the end of such fiscal year. As used in this subsection, a fiscal year shall be deemed to begin on July 1 of one calendar year and shall end on June 30 of the subsequent calendar year;
2. No claims for refunds pursuant to the provisions of this subsection shall be filed more than eighteen (18) months after the first day of the fiscal year in which the refund is first available;
3. No claims for refunds pursuant to the provisions of this subsection shall be filed by or on behalf of persons other than the operator or a working interest owner of record at the time of production;
4. No refunds shall be claimed or paid pursuant to the provisions of this subsection for oil or gas production upon which a tax is paid at a rate of one percent (1%) as specified in subsection B of this section; and
5. No refund shall be paid unless the person making the claim for refund demonstrates by affidavit or other means prescribed by the Tax Commission that an amount equal to or greater than the amount of the refund has been invested in the exploration for or production of crude oil or natural gas in this state by such person not more than three (3) years prior to the date of the claim. No amount of investment used to qualify for a refund pursuant to the provisions of this paragraph may be used to qualify for another refund pursuant to the provisions of this paragraph.
If there are insufficient funds collected from the production of oil to satisfy the refunds claimed for oil production pursuant to subsection E, F, G, H, I or J of this section, the Tax Commission shall pay the balance of the refund claims out of the gross production taxes collected from the production of gas.
M. 1. The Corporation Commission and the Tax Commission shall promulgate joint rules for the qualification for the exemptions provided for in subsections E, F, G, H, I and J of this section and the rules shall contain provisions for verification of any wells from which production may be qualified for the exemptions.
2. Any person requesting any exemption shall file an application for qualification for the exemption with the Corporation Commission which, upon finding that the well meets the requirements of subsection E, F, G, H, I or J of this section, shall approve the application for qualification.
3. Any person seeking an exemption shall:
a. file an application for the exemption with the Tax Commission which, upon determination of qualification by the Corporation Commission, shall approve the application for an exemption, and
b. provide a copy of the approved application to the remitter of the gross production tax.
4. The Tax Commission may require any person requesting an exemption to furnish necessary financial and other information or records in order to determine and justify the refund.
5. Upon the expiration of the exemption granted pursuant to subsection E, F, G, H, I or J of this section, the Tax Commission shall collect the gross production tax levied pursuant to this section. If a person who qualifies for the exemption elects to remit his or her own gross production tax during the exemption period, the first purchaser shall not be liable to withhold or remit the tax until the first day of the month following the receipt of written notification from the person who is qualified for such exemption stating that such exemption has expired and directing the first purchaser to resume tax remittance on his or her behalf.
N. All persons shall only be entitled to either the exemption granted pursuant to subsection D of this section or the exemption granted pursuant to subsection E, F, G, H, I or J of this section for each oil, gas or oil and gas well drilled or recompleted in this state. However, any person who qualifies for the exemption granted pursuant to subsection E, F, G, H, I or J of this section shall not be prohibited from qualification for the exemption granted pursuant to subsection D of this section, if the exemption granted pursuant to subsection E, F, G, H, I or J of this section has expired.
O. The Tax Commission shall have the power to require any such person engaged in mining or the production or the purchase of such asphalt, mineral ores aforesaid, oil, or gas, or the owner of any royalty interest therein to furnish any additional information by it deemed to be necessary for the purpose of correctly computing the amount of the tax; and to examine the books, records and files of such person; and shall have power to conduct hearings and compel the attendance of witnesses, and the production of books, records and papers of any person.
P. Any person or any member of any firm or association, or any officer, official, agent or employee of any corporation who shall fail or refuse to testify; or who shall fail or refuse to produce any books, records or papers which the Tax Commission shall require; or who shall fail or refuse to furnish any other evidence or information which the Tax Commission may require; or who shall fail or refuse to answer any competent questions which may be put to him or her by the Tax Commission, touching the business, property, assets or effects of any such person relating to the gross production tax imposed by this article or exemption authorized pursuant to this section or other laws, shall be guilty of a misdemeanor, and, upon conviction thereof, shall be punished by a fine of not more than Five Hundred Dollars ($500.00), or imprisonment in the jail of the county where such offense shall have been committed, for not more than one (1) year, or by both such fine and imprisonment; and each day of such refusal on the part of such person shall constitute a separate and distinct offense.
Q. The Tax Commission shall have the power and authority to ascertain and determine whether or not any report herein required to be filed with it is a true and correct report of the gross products, and of the value thereof, of such person engaged in the mining or production or purchase of asphalt and ores bearing minerals aforesaid and of oil and gas. If any person has made an untrue or incorrect report of the gross production or value or volume thereof, or shall have failed or refused to make such report, the Tax Commission shall, under the rules prescribed by it, ascertain the correct amount of either, and compute the tax.
R. The payment of the taxes herein levied shall be in full, and in lieu of all taxes by the state, counties, cities, towns, school districts and other municipalities upon any property rights attached to or inherent in the right to the minerals, upon producing leases for the mining of asphalt and ores bearing lead, zinc, jack, gold, silver or copper, or for oil, or for gas, upon the mineral rights and privileges for the minerals aforesaid belonging or appertaining to land, upon the machinery, appliances and equipment used in and around any well producing oil, or gas, or any mine producing asphalt or any of the mineral ores aforesaid and actually used in the operation of such well or mine. The payment of gross production tax shall also be in lieu of all taxes upon the oil, gas, asphalt or ores bearing minerals hereinbefore mentioned during the tax year in which the same is produced, and upon any investment in any of the leases, rights, privileges, minerals or other property described herein. Any interest in the land, other than that herein enumerated, and oil in storage, asphalt and ores bearing minerals hereinbefore named, mined, produced and on hand at the date as of which property is assessed for general and ad valorem taxation for any subsequent tax year, shall be assessed and taxed as other property within the taxing district in which such property is situated at the time.
S. No equipment, material or property shall be exempt from the payment of ad valorem tax by reason of the payment of the gross production tax except such equipment, machinery, tools, material or property as is actually necessary and being used and in use in the production of asphalt or of ores bearing lead, zinc, jack, gold, silver or copper or of oil or gas. It is expressly declared that no ice plants, hospitals, office buildings, garages, residences, gasoline extraction or absorption plants, water systems, fuel systems, rooming houses and other buildings, nor any equipment or material used in connection therewith, shall be exempt from ad valorem tax.
T. The exemption from ad valorem tax set forth in subsections R and S of this section shall continue to apply to all property from which production of oil, gas or oil and gas is exempt from gross production tax pursuant to subsection D, E, F, G, H, I or J of this section.
Added by Laws 1963, c. 365, § 2, emerg. eff. June 22, 1963. Renumbered from § 10-1001 of this title by Laws 1965, c. 215, § 2. Amended by Laws 1971, c. 53, § 1, emerg. eff. March 31, 1971; Laws 1976, c. 62, § 1, emerg. eff. April 22, 1976; Laws 1980, c. 129, § 1, emerg. eff. April 14, 1980; Laws 1987, c. 50, § 1; Laws 1990, c. 229, § 1, operative July 1, 1990; Laws 1992, c. 30, § 1, emerg. eff. March 31, 1992; Laws 1993, c. 273, § 4, eff. July 1, 1993; Laws 1994, c. 311, § 1, eff. July 1, 1994; Laws 1995, c. 321, § 1, eff. July 1, 1995; Laws 1996, c. 360, § 1, eff. July 1, 1996; Laws 1997, c. 390, § 2, eff. July 1, 1997; Laws 1999, 1st Ex. Sess., c. 1, § 1, emerg. eff. Feb. 5, 1999; Laws 2000, c. 315, § 5, eff. July 1, 2000; Laws 2001, c. 249, § 1, eff. July 1, 2001; Laws 2002, c. 416, § 1, eff. July 1, 2002; Laws 2003, c. 463, § 1, eff. July 1, 2003; Laws 2004, c. 189, § 1, eff. July 1, 2004; Laws 2004, c. 444, § 1, eff. Nov. 1, 2004; Laws 2005, c. 297, § 1, eff. July 1, 2005.
§68-1001.1. Property exempt from taxation pursuant to Title 68, § 1001, subsections (p) and (q) - Rules and regulations for determination.
The Oklahoma Tax Commission shall adopt rules and regulations which establish guidelines for the determination of property exempt from ad valorem taxation pursuant to the provisions of subsections (p) and (q) of Section 1001 of this title. Said guidelines shall include, but are not limited to, the following:
1. "Producing leases" means wells or leases or production units which have had production during any of the previous three (3) calendar years which is subject to the gross production tax levied by Section 1001 of this title and which have not been abandoned or required to be plugged as required by law on or before January 1 of the year for which the assessment or valuation is made;
2. "Payment of gross production tax" means payment of the tax levied by Section 1001 of this title on production during any of the three (3) calendar years immediately prior to January 1 of the year for which the assessment or valuation is made; and
3. Property exempt from ad valorem tax pursuant to the provisions of subsections (p) and (q) of Section 1001 of this title shall include, but is not limited to, lease production tanks, lease production meters, and disposal systems which are not for commercial purposes. Such exempt property shall remain exempt as long as the property is essential to the production of oil and gas in commercial quantities. The county assessor shall be notified when such property becomes nonexempt.
Added by Laws 1985, c. 345, § 16, emerg. eff. July 30, 1985. Amended by Laws 1991, c. 342, § 11, emerg. eff. June 15, 1991. Renumbered from § 1101.1 by Laws 1991, c. 342, § 27, emerg. eff. June 15, 1991. Amended by Laws 1994, c. 311, § 2, eff. July 1, 1994; Laws 1998, c. 106, § 1, eff. Nov. 1, 1998.
§68-1001.2. Definitions.
As used in this article:
(a) "Gas" means natural gas or casinghead gas. The terms gas, natural gas or casinghead gas when used in this article are interchangeable, and any provisions relating to any one of these shall relate to all gas, natural gas or casinghead gas;
(b) "Lease" means a spaced unit, a separately metered formation within the spaced unit, or each tract within a Corporation Commission approved unitization, or a lease which, for tax reporting purposes, has been assigned a production unit number;
(c) "Oil" means petroleum or other crude or mineral oil; and
(d) "Person" means any natural person, firm, partnership, joint venture, association, limited liability company, corporation, estate, trust, and any other group or combination acting as a unit.
Added by Laws 1992, c. 30, § 2, emerg. eff. March 30, 1992. Amended by Laws 1993, c. 366, § 36, eff. Sept. 1, 1993.
§68-1001.3. Repealed by Laws 1999, 1st Ex.Sess., c. 1, § 8, eff. Jan. 1, 2000.
§68-1001.3a. Economically at-risk oil or gas lease - Tax exemptions.
A. As used in this section:
1. "Economically at-risk oil or gas lease" means any oil or gas lease operated at a net loss or at a net profit which is less than the total gross production tax remitted for such lease during the previous calendar year; and
2. "Lease" shall be defined as in Section 1001.2 of Title 68 of the Oklahoma Statutes.
B. When certified as such pursuant to the provisions of this section, production from an economically at-risk oil or gas lease shall be eligible for an exemption from the gross production tax levied pursuant to subsection B of Section 1001 of Title 68 of the Oklahoma Statutes for production on such lease during the previous calendar year in the following amounts:
1. If the gross production tax rate levied pursuant to subsection B of Section 1001 of Title 68 of the Oklahoma Statutes was seven percent (7%), then the exemption shall equal six-sevenths (6/7) of the gross production tax levied;
2. If the gross production tax rate levied pursuant to subsection B of Section 1001 of Title 68 of the Oklahoma Statutes was four percent (4%), then the exemption shall equal three-fourths (3/4) of the gross production tax levied; and
3. If the gross production tax rate levied pursuant to subsection B of Section 1001 of Title 68 of the Oklahoma Statutes was one percent (1%), no exemption shall apply.
C. For all production exempt from gross production taxes pursuant to this section, a refund of gross production taxes paid for production in the previous calendar year in the amounts specified in this subsection shall be issued to the well operator or a designee. The refund shall not be claimed until after July 1 of the year subsequent to the year of production.
D. Any operator making application for an economically at-risk oil or gas lease status under the provisions of this section shall submit documentation to the Tax Commission, as determined by the Tax Commission to be appropriate and necessary including, but not limited to, the operator's federal income tax return for the previous year for such lease.
E. For the purposes of this section, determination of the economically at-risk oil or gas lease status shall be made by subtracting from the gross revenue of that lease for the previous calendar year severance taxes, if any, royalty, operating expenses of the lease to include expendable workover and recompletion costs for the previous calendar year, and including overhead costs up to the maximum overhead percentage allowed by the Council of Petroleum Accountants Societies (COPAS) guidelines. For the purposes of this calculation, depreciation, depletion or intangible drilling costs shall not be included as lease operating expenses.
F. The Tax Commission shall have sole authority to determine if an oil or gas lease qualifies for certification as an economically at-risk oil or gas lease and shall make the determination within sixty (60) days after an application is filed for economically at-risk oil or gas lease status. The Tax Commission shall promulgate rules governing the certification process.
G. Gross production tax exemptions under the provisions of this section shall be limited to production from calendar years 2005, 2006 and 2007.
Added by Laws 2005, c. 436, § 1, eff. July 1, 2005.
§681002. Failure to make report of gross production.
If any person shall fail to make the report of the gross production of any mine or oil or gas well, upon which a gross production tax is levied, within the time prescribed by law for such report it shall be the duty of the Tax Commission to examine the books, records and files of such person to ascertain the amount and value of such production and to compute the tax thereon.
Laws 1963, c. 365, § 2, emerg. eff. June 22, 1963. Renumbered from § 10-1002 by Laws 1965, c. 215, § 2. Amended by Laws 1965, c. 346, § 1, emerg. eff. June 28, 1965; Laws 1992, c. 30, § 3, emerg. eff. March 30, 1992.
§68-1003. Tax on oil recovered or from unknown sources.
A. It shall be the duty of the Oklahoma Tax Commission to collect, in addition to the gross production tax, twelve and onehalf percent (12 1/2%) of the gross value of all oil reported to the Tax Commission as recovered from streams, lakes, ponds, ravines and other natural depressions to which oil shall have escaped or therein was found and twelve and onehalf percent (12 1/2%) of the gross value of all oil which is reported to the Tax Commission and which report does not disclose the actual source of the oil. The Tax Commission shall hold the proceeds thereof for twelve (12) months in its depository account with the State Treasurer, during which time the rightful owner or owners of the royalty interest therein, upon proper application and satisfactory proof made to the Tax Commission, shall be paid their proper interest or interests out of the depository account. Otherwise, the Tax Commission shall, after the lapse of one (1) year from the collection of any such sum, distribute the same as provided by law for the distribution of gross production taxes.
B. For purposes of this section, "actual source" shall be the well or wells and particular leasehold from which the oil was produced.
C. The operators of salt water disposal facilities shall be required to pay to the Tax Commission the fee of twelve and onehalf percent (12 1/2%) as required by this section on the amount of oil recovered in excess of two percent (2%) of the volume of water handled.
Added by Laws 1963, c. 365, § 2, emerg. eff. June 22, 1963. Renumbered from § 10-1003 by Laws 1965, c. 215, § 2. Amended by Laws 1989, c. 279, § 10, operative July 1, 1989; Laws 1992, c. 30, § 4, emerg. eff. March 30, 1992; Laws 2001, c. 249, § 2, eff. July 1, 2001.
§68-1004. Apportionment and use of proceeds of tax.
Beginning July 1, 2002, the gross production tax provided for in Section 1001 of this title is hereby levied and shall be collected and apportioned as follows:
1. For all monies collected from the tax levied on asphalt or ores bearing uranium, lead, zinc, jack, gold, silver or copper:
a. eighty-five and seventy-two one-hundredths percent (85.72%) shall be paid to the State Treasurer of the state to be placed in the General Revenue Fund of the state and used for the general expense of state government, to be paid out pursuant to direct appropriation by the Legislature,
b. seven and fourteen one-hundredths percent (7.14%) of the sum collected from natural gas and/or casinghead gas or asphalt or ores bearing uranium, lead, zinc, jack, gold, silver or copper shall be paid to the various county treasurers to be credited to the County Highway Fund as follows: Each county shall receive a proportionate share of the funds available based upon the proportion of the total value of production from such county in the corresponding month of the preceding year, and
c. seven and fourteen one-hundredths percent (7.14%) shall be allocated to each county as provided for in subparagraph b of this paragraph and shall be apportioned, on an average daily attendance per capita distribution basis, as certified by the State Superintendent of Public Instruction to the school districts of the county where such pupils attend school regardless of residence of such pupil, provided the school district makes an ad valorem tax levy of fifteen (15) mills for the current year and maintains twelve (12) years of instruction;
2. For all monies collected from the tax levied on natural gas and/or casinghead gas at a tax rate of seven percent (7%) pursuant to the provisions of subsection B of Section 1001 of this title:
a. eighty-five and seventy-two one-hundredths percent (85.72%) shall be paid to the State Treasurer of the state to be placed in the General Revenue Fund of the state and used for the general expense of state government, to be paid out pursuant to direct appropriation by the Legislature,
b. seven and fourteen one-hundredths percent (7.14%) of the sum collected from natural gas and/or casinghead gas shall be paid to the various county treasurers to be credited to the County Highway Fund as follows: Each county shall receive a proportionate share of the funds available based upon the proportion of the total value of production from such county in the corresponding month of the preceding year, and
c. seven and fourteen one-hundredths percent (7.14%) shall be allocated to each county as provided for in subparagraph b of this paragraph and shall be apportioned, on an average daily attendance per capita distribution basis, as certified by the State Superintendent of Public Instruction to the school districts of the county where such pupils attend school regardless of residence of such pupil, provided the school district makes an ad valorem tax levy of fifteen (15) mills for the current year and maintains twelve (12) years of instruction;
3. For all monies collected from the tax levied on natural gas and/or casinghead gas at a tax rate of four percent (4%) pursuant to the provisions of subsection B of Section 1001 of this title:
a. seventy-five percent (75%) shall be paid to the State Treasurer of the state to be placed in the General Revenue Fund of the state and used for the general expense of state government, to be paid out pursuant to direct appropriation by the Legislature,
b. twelve and one-half percent (12.5%) of the sum collected from natural gas and/or casinghead gas shall be paid to the various county treasurers to be credited to the County Highway Fund as follows: Each county shall receive a proportionate share of the funds available based upon the proportion of the total value of production from such county in the corresponding month of the preceding year, and
c. twelve and one-half percent (12.5%) shall be allocated to each county as provided for in subparagraph b of this paragraph and shall be apportioned, on an average daily attendance per capita distribution basis, as certified by the State Superintendent of Public Instruction to the school districts of the county where such pupils attend school regardless of residence of such pupil, provided the school district makes an ad valorem tax levy of fifteen (15) mills for the current year and maintains twelve (12) years of instruction;
4. For all monies collected from the tax levied on natural gas and/or casinghead gas at a tax rate of one percent (1%) pursuant to the provisions of subsection B of Section 1001 of this title:
a. fifty percent (50%) of the sum collected from natural gas and/or casinghead gas shall be paid to the various county treasurers to be credited to the County Highway Fund as follows: Each county shall receive a proportionate share of the funds available based upon the proportion of the total value of production from such county in the corresponding month of the preceding year, and
b. fifty percent (50%) shall be allocated to each county as provided for in subparagraph a of this paragraph and shall be apportioned, on an average daily attendance per capita distribution basis, as certified by the State Superintendent of Public Instruction to the school districts of the county where such pupils attend school regardless of residence of such pupil, provided the school district makes an ad valorem tax levy of fifteen (15) mills for the current year and maintains twelve (12) years of instruction;
5. For all monies collected from the tax levied on oil at a tax rate of seven percent (7%) pursuant to the provisions of subsection B of Section 1001 of this title:
a. twenty-five and seventy-two one-hundredths percent (25.72%) shall be paid to the State Treasurer to be placed in the Common Education Technology Revolving Fund created in Section 41.29c of Title 62 of the Oklahoma Statutes,
b. twenty-five and seventy-two one-hundredths percent (25.72%) shall be paid to the State Treasurer to be placed in the Higher Education Capital Revolving Fund created in Section 41.29d of Title 62 of the Oklahoma Statutes,
c. twenty-five and seventy-two one-hundredths percent (25.72%) shall be paid to the State Treasurer to be placed in the Oklahoma Tuition Scholarship Revolving Fund created in Section 41.29e of Title 62 of the Oklahoma Statutes,
d. four and twenty-eight one-hundredths percent (4.28%) shall be paid to the State Treasurer to be apportioned to the County Bridge and Road Improvement Fund of the State Treasury,
e. four and twenty-eight one-hundredths percent (4.28%) shall be paid to the State Treasurer to be apportioned to the Oklahoma Water Resources Board Rural Economic Action Plan Water Projects Fund,
f. seven and fourteen one-hundredths percent (7.14%) of the sum collected from oil shall be paid to the various county treasurers, to be credited to the County Highway Fund as follows: Each county shall receive a proportionate share of the funds available based upon the proportion of the total value of production from such county in the corresponding month of the preceding year, and
g. seven and fourteen one-hundredths percent (7.14%) shall be allocated to each county as provided in subparagraph f of this paragraph and shall be apportioned, on an average daily attendance per capita distribution basis, as certified by the State Superintendent of Public Instruction, to the school districts of the county where such pupils attend school regardless of residence of such pupil, provided the school district makes an ad valorem tax levy of fifteen (15) mills for the current year and maintains twelve (12) years of instruction;
6. For all monies collected from the tax levied on oil at a tax rate of four percent (4%) pursuant to the provisions of subsection B of Section 1001 of this title:
a. twenty-two and one-half percent (22.5%) shall be paid to the State Treasurer to be placed in the Common Education Technology Revolving Fund created in Section 41.29c of Title 62 of the Oklahoma Statutes,
b. twenty-two and one-half percent (22.5%) shall be paid to the State Treasurer to be placed in the Higher Education Capital Revolving Fund created in Section 41.29d of Title 62 of the Oklahoma Statutes,
c. twenty-two and one-half percent (22.5%) shall be paid to the State Treasurer to be placed in the Oklahoma Tuition Scholarship Revolving Fund created in Section 41.29e of Title 62 of the Oklahoma Statutes,
d. three and seventy-five one-hundredths percent (3.75%) shall be paid to the State Treasurer to be apportioned to the County Bridge and Road Improvement Fund of the State Treasury,
e. three and seventy-five one-hundredths percent (3.75%) shall be paid to the State Treasurer to be apportioned to the Oklahoma Water Resources Board Rural Economic Action Plan Water Projects Fund,
f. twelve and one-half percent (12.5%) of the sum collected from oil shall be paid to the various county treasurers, to be credited to the County Highway Fund as follows: Each county shall receive a proportionate share of the funds available based upon the proportion of the total value of production from such county in the corresponding month of the preceding year, and
g. twelve and one-half percent (12.5%) shall be allocated to each county as provided in subparagraph f of this paragraph and shall be apportioned on an average daily attendance per capita distribution basis, as certified by the State Superintendent of Public Instruction, to the school districts of the county where such pupils attend school regardless of residence of such pupil, provided the school district makes an ad valorem tax levy of fifteen (15) mills for the current year and maintains twelve (12) years of instruction; and
7. For all monies collected from the tax levied on oil at a tax rate of one percent (1%) pursuant to the provisions of subsection B of Section 1001 of this title:
a. fifty percent (50%) of the sum collected shall be paid to the various county treasurers, to be credited to the County Highway Fund as follows: Each county shall receive a proportionate share of the funds available based upon the proportion of the total value of production from such county in the corresponding month of the preceding year, and
b. fifty percent (50%) shall be allocated to each county as provided for in subparagraph a of this paragraph and shall be apportioned on an average daily attendance per capita distribution basis, as certified by the State Superintendent of Public Instruction, to the school districts of the county where such pupils attend school regardless of residence of such pupil, provided the school district makes an ad valorem tax levy of fifteen (15) mills for the current year and maintains twelve (12) years of instruction.
Provided, notwithstanding any other provision of this section, the total amounts deposited to the Common Education Technology Revolving Fund, the Higher Education Capital Revolving Fund, the Oklahoma Tuition Scholarship Revolving Fund, the County Bridge and Road Improvement Fund and the Rural Economic Action Plan Water Projects Fund pursuant to paragraphs 5 and 6 of this section shall not exceed One Hundred Fifty Million Dollars ($150,000,000.00) in any fiscal year. All sums in excess of One Hundred Fifty Million Dollars ($150,000,000.00) in any fiscal year which would otherwise be deposited in such funds shall be placed by the State Treasurer in the General Revenue Fund of the state.
Added by Laws 1963, c. 365, § 2, emerg. eff. June 22, 1963. Renumbered from § 10-1004 of this title by Laws 1965, c. 215, § 2. Amended by Laws 1982, c. 329, § 1, eff. July 1, 1982; Laws 1985, c. 180, § 8, eff. July 1, 1985; Laws 1986, c. 223, § 39, operative July 1, 1986; Laws 1988, c. 165, § 28, operative July 1, 1988; Laws 1989, 1st Ex.Sess., c. 2, § 95, emerg. eff. April 25, 1990; Laws 1992, c. 376, § 5, eff. July 1, 1992; Laws 1993, c. 239, § 18, eff. July 1, 1993; Laws 1999, 1st Ex.Sess., c. 1, § 3, emerg. eff. Feb. 5, 1999; Laws 1999, c. 254, § 6, eff. June 30, 1999; Laws 2000, c. 419, § 4, emerg. eff. June 9, 2000; Laws 2001, c. 270, § 1, emerg. eff. May 24, 2001; Laws 2002, c. 416, § 2, eff. July 1, 2002.
NOTE: Laws 1998, c. 317, § 5 repealed by Laws 1999, 1st Ex.Sess., c. 1, § 7, emerg. eff. Feb. 5, 1999.
§68-1004a. Repealed by Laws 1999, 1st Ex.Sess., c. 1, § 7, emerg. eff. Feb. 5, 1999.
§681005. Reports by carriers of oil and gas transported Refiners Persons purchasing or storing oil Delinquency dates.
(a) It shall be the duty of every railroad company, pipeline or transportation company to furnish to the Tax Commission, upon forms prescribed by it, any and all information relative to the transportation of crude oil or gas subject to gross production tax, that may be required to properly enforce the provisions of this article; and such reports shall contain, along with other information required, the name of shipper, amount of oil and gas transported, point of receipt of shipment and point of destination. The Tax Commission may require any such pipeline or transportation company to install suitable measuring devices to enable such company to include in such reports the quantity of oil or gas transported within, into, out of, or across the State of Oklahoma.
(b) It shall be the duty of every person engaged in the operation of a refinery for the processing of oil or gas in the State of Oklahoma to furnish monthly to the Tax Commission, upon forms prescribed by it, any and all information relative to the amount of oil or gas subject to gross production tax that has been processed by it during such monthly period, and oil on hand at the close of such period, that may be required to properly enforce the provisions of this article.
(c) It shall be the duty of every person engaged in the selling, purchasing, treating or transporting of tank bottoms, pit oil or liquid hydrocarbons from which petroleum oil is extracted, to furnish monthly a report to the Tax Commission, upon forms prescribed by it, any and all information relative to the selling, purchasing, treating or transporting of all tank bottoms, pit oil or liquid hydrocarbons that may be required to properly enforce the provisions of this article.
(d) It shall be the duty of every person engaged in the purchasing or storing of oil subject to gross production tax in the State of Oklahoma to furnish monthly a report to the Tax Commission, upon forms prescribed by it, showing the amount of such oil in storage, giving, along with other information required, the location, identity, character and capacity of the storage receptacle in which such oil is stored.
(e) All reports required by this article shall become due on the first day of each calendar month on all lead, zinc, jack, gold, silver or copper, petroleum oil, tank bottoms, pit oil and liquid hydrocarbons from which petroleum oil is extracted, natural gas or casinghead gas produced in and saved during the preceding monthly period, and if such reports are not received on or before the tenth day of the calendar month following the month such reports become due, the reports shall become delinquent. The failure of any person to comply with the provisions of this section shall make any such person liable for a penalty, in accordance with Section 1010 of this title, for each day it shall fail or refuse to furnish such statement or comply with the provisions of this article. Such penalty may be recovered at the suit of the state, on relation of the Tax Commission and shall be apportioned as other gross production tax penalties.
Laws 1963, c. 365, § 2, emerg. eff. June 22, 1963. Renumbered from § 10-1005 by Laws 1965, c. 215, § 2. Amended by Laws 1968, c. 341, § 1, emerg. eff. May 9, 1968; Laws 1979, c. 88, § 1, emerg. eff. April 24, 1979; Laws 1992, c. 30, § 5, emerg. eff. March 30, 1992.
§681006. Payment where ownership is in dispute Assignment as security.
Whenever oil, gas or any other minerals upon which gross production tax is paid under the laws of the State of Oklahoma, are in litigation or dispute involving ownership of such oil, gas or other minerals, subject to such tax, and such oil, gas or other minerals are sold, the usual gross production tax, as provided by law, shall be paid from the proceeds or funds in the hands of the purchaser of such oil, gas or other minerals; and in lieu of payment for such production, to the extent of such tax, the Tax Commission's receipt therefor shall be accepted in lieu of money in settlement of the purchase price of such production; and whenever any such oil, gas or other minerals are assigned as security for debt or otherwise, such tax shall be likewise paid by such assignee; and such tax shall constitute a lien upon the interest assigned, which shall be paramount to such indebtedness for which the assignment is made; and whenever such tax shall become delinquent, the usual penalty shall apply. Laws 1963, c. 365, Section 2; Laws 1965, c. 215, Section 2.
Laws 1963, c. 365, § 2; Laws 1965, c. 215, § 2.
§681007. Purchaser to withhold tax Payment by purchaser.
All purchasers of oil or gas, or other minerals subject to the tax levied by this article shall recognize the Tax Commission's order to withhold payment for all production wherein the required producers' reports are delinquent or the gross production tax and penalty, payable by any producer or royalty owner are unreported, unpaid or delinquent, until such reports are received or the tax and penalty paid; and on failure of the producer or royalty owner to file reports and/or pay such tax and penalty, the purchaser of such production shall, on order of the Tax Commission, (1) withhold payment for all production until notified by the Tax Commission that all reports have been received, (2) pay such tax and penalty, and its receipt therefor shall be accepted by such producer or royalty owner in lieu of cash in settlement for such production. This shall also apply in any case where a subsequent purchaser, or purchaser of subsequent oil, gas or casinghead gas or other minerals shall be so notified, and shall also apply when the interest against which such tax and penalty shall have accrued may have been transferred subsequent to the accrual of said tax and penalty.
Laws 1963, c. 365, § 2, emerg. eff. June 22, 1963. Renumbered from § 10-1007 by Laws 1965, c. 215, § 2. Amended by Laws 1968, c. 341, § 2, emerg. eff. May 9, 1968; Laws 1992, c. 30, § 6, emerg. eff. March 30, 1992.
§681008. Refund of overpayments, duplicate payments and erroneous payments Rebuttable presumptions.
A. Except as set forth in subsection B of this section, in all cases of overpayment, duplicate payment or payment made in error on account of the production being derived from restricted Indian lands and lands owned by the United States, the state, counties, cities, towns and school districts, and therefore exempt from taxation, the Oklahoma Tax Commission is authorized to refund any such overpaid duplicate or erroneously paid gross production taxes, where an application for such refund is made within three (3) years from the date of the payment thereof, out of any undistributed gross production tax collections in the depository account of the Oklahoma Tax Commission, from the same county from which the original tax was derived. Provided, however, this exemption shall apply only to the interest in such production owned by the restricted Indian or exempt governmental entity. A determination made by the federal government or any agency thereof in allowing a refund or recovery of overpayment, duplicate payment or erroneous payment of taxes arising out of the same circumstances under which a claim has been submitted to the Oklahoma Tax Commission for a refund may create a presumption that the evidence upon which the federal government or agency thereof relied in allowing a refund or recovery is correct. The Oklahoma Tax Commission shall not, however, be bound by such presumption of correctness, but may if it deems the circumstances to warrant present evidence in rebuttal thereof.
B. Notwithstanding the provisions of subsection A of this section, the Oklahoma Tax Commission is authorized to refund directly to the Commissioners of the Land Office any gross production tax paid to the Tax Commission in error after January 1, 1978, on any oil and gas royalty interest of the Commissioners of the Land Office out of any undistributed gross production tax collections in the depository account of the Oklahoma Tax Commission, from the same county from which the original tax was derived.
Said refund shall only be issued as the result of a determination by the Commissioners of the Land Office that said erroneous payment of such gross production tax has been made to the Tax Commission during the period after January 1, 1978. Such determination by the Commissioners of the Land Office may create a presumption that the evidence upon which the Commissioners of the Land Office relied in reaching the determination of erroneous payment is correct. The Tax Commission shall not, however, be bound by the presumption of correctness, but may if it deems the circumstances to warrant, present evidence in rebuttal thereof.
Laws 1963, c. 365, § 2, emerg. eff. June 22, 1963. Renumbered from § 10-1008 by Laws 1965, c. 215, § 2. Amended by Laws 1968, c. 248, § 1, emerg. eff. April 26, 1968; Laws 1992, c. 392, § 1, emerg. eff. June 9, 1992.
§68-1008a. Refund of payments to Commissioners of the Land Office.
A. If any person responsible for paying oil or gas royalty to the Commissioners of the Land Office has, after January 1, 1978, paid or caused to be paid, or pays, or causes to be paid, to the Oklahoma Tax Commission, gross production tax pursuant to Section 1001 of Title 68 of the Oklahoma Statutes, petroleum excise tax pursuant to Section 1102 of Title 68 of the Oklahoma Statutes, or conservation excise tax pursuant to Section 1108 of Title 68 of the Oklahoma Statutes, on such royalty, the Commissioners of the Land Office shall recover the taxes so paid directly from the Oklahoma Tax Commission. For the purposes of this act, the Commissioners of the Land Office shall not be subject to the time limitations for refunds of Section 227 or Section 1008 of Title 68 of the Oklahoma Statutes. Notwithstanding any other provision of the Oklahoma Statutes, the Oklahoma Tax Commission shall not be required to pay interest or penalties on such taxes to the Commissioners of the Land Office.
B. Upon written request and proper documentation provided by the Commissioners of the Land Office, the Oklahoma Tax Commission shall pay to the Commissioners of the Land Office any gross production tax pursuant to Section 1001 of Title 68 of the Oklahoma Statutes, petroleum excise tax pursuant to Section 1101 of Title 68 of the Oklahoma Statutes, excise tax on gas, pursuant to Section 1102 of Title 68 of the Oklahoma Statutes, or conservation excise tax pursuant to Section 1108 of Title 68 of the Oklahoma Statutes paid on oil or gas royalty due to the Commissioners of the Land Office. Said written request shall only be issued as the result of a determination by the Commissioners of the Land Office that erroneous payment of such gross production tax pursuant to Section 1001 of Title 68 of the Oklahoma Statutes, excise tax on gas pursuant to Section 1102 of Title 68 of the Oklahoma Statutes, or conservation excise tax pursuant to Section 1108 of Title 68 of the Oklahoma Statutes has been made to the Oklahoma Tax Commission after January 1, 1978. Such determination by the Commissioners of the Land Office may create a presumption that the evidence upon which the Commissioners of the Land Office relied in reaching the determination of erroneous payment is correct. The Oklahoma Tax Commission shall not, however, be bound by the presumption of correctness but may, if the Oklahoma Tax Commission deems the circumstances to warrant, present evidence in rebuttal thereof.
C. Any person responsible for paying oil or gas royalty to the Commissioners of the Land Office who has, after January 1, 1978, and before January 1, 1989, paid or caused to be paid, or pays, or causes to be paid, to the Oklahoma Tax Commission, gross production tax pursuant to Section 1001 of Title 68 of the Oklahoma Statutes, petroleum excise tax pursuant to Section 1101 of Title 68 of the Oklahoma Statutes, excise tax on gas pursuant to Section 1103 of Title 68 of the Oklahoma Statutes, or conservation excise tax pursuant to Section 1108 of Title 68 of the Oklahoma Statutes, on said royalty, shall be liable to the Commissioners of the Land Office for interest thereon, pursuant to the Oklahoma Statutes. Notwithstanding any other provision of the Oklahoma Statutes, such person shall not be liable to the Commissioners of the Land Office for penalties thereon.
D. Any person responsible for paying oil or gas royalty to the Commissioners of the Land Office who has, on or after January 1, 1989, paid or caused to be paid, or pays or causes to be paid, to the Oklahoma Tax Commission, gross production tax pursuant to Section 1001 of Title 68 of the Oklahoma Statutes, petroleum excise tax pursuant to Section 1101 of Title 68 of the Oklahoma Statutes, excise tax on gas pursuant to Section 1103 of Title 68 of the Oklahoma Statutes, or conservation excise tax pursuant to Section 1108 of Title 68 of the Oklahoma Statutes, on said royalty, shall be liable to the Commissioners of the Land Office for interest and penalties thereon, pursuant to the Oklahoma Statutes.
E. The Oklahoma Tax Commission is hereby authorized to make refund payments to the Commissioners of the Land Office pursuant to the provisions of this act as though the Commissioners of the Land Office were a taxpayer or tax remitter.
F. Nothing in this act shall preclude the Commissioners of the Land Office from collecting royalty payments directly from their lessees or the designees of their lessees, other than as specified in this act.
Added by Laws 1992, c. 392, § 3, emerg. eff. June 9, 1992.
§68-1009. Payment of tax - Basis - Due date - Delinquent taxes - Application of subsection - Persons liable for tax - Election to report and pay tax - Payment pursuant to contract or agreement.
A. The gross production tax on asphalt and on ores bearing lead, zinc, jack, gold, silver or copper, and on petroleum oil, tank bottoms, pit oil, and liquid hydrocarbons from which petroleum oil is extracted, and on gas shall be paid on a monthly basis in accordance with this article.
B. The gross production tax shall become due on the first day of each calendar month on all lead, zinc, jack, gold, silver or copper, petroleum oil, tank bottoms, pit oil, and liquid hydrocarbons from which petroleum oil is extracted, natural gas or casinghead gas produced in and saved during the preceding monthly period, and, if the tax is not paid on or before the twenty-fifth day of the second calendar month following the month of production, the tax shall become delinquent and shall be collected in the manner provided by law for the collection of delinquent gross production taxes. The provisions of this subsection shall apply to payment of gross production taxes irrespective of any other statute relating thereto.
C. On all petroleum oil extracted from tank bottoms, pit oil, or liquid hydrocarbons, the gross production tax shall be paid by the operator of the reclaiming plant, unless the tax levied by this article has already been paid thereon.
D. On oil and gas sold at the time of production, the gross production tax shall be paid by the purchaser of such products, and such purchaser shall, and is hereby authorized to deduct in making settlements with the producer and/or royalty owner, the amount of tax so paid. In the event oil is not sold at the time of production but is retained by the producer, the tax on such oil not so sold shall be paid by the producer for himself including the tax due on royalty oil not sold; provided, that in settlement with the royalty owner such producer shall have the right to deduct the amount of such tax so paid on royalty oil or to deduct therefrom royalty oil equivalent in value at the time such tax becomes due with the amount of the tax paid. The gross production tax upon asphalt, or on ores bearing lead, zinc, jack, gold, silver or copper shall be paid by the producer for himself, including the royalty interest; provided, that in settlement with the royalty owner such producer shall have the right to deduct the amount of such tax so paid on royalty asphalt, or on ores bearing lead, zinc, jack, gold, silver or copper, or to deduct therefrom royalty asphalt, or ores bearing lead, zinc, jack, gold, silver or copper, equivalent in value at the time such tax became due, to the amount of tax paid.
E. 1. Producers, either as operators of producing wells or as nonoperating working interest owners who take gas in kind at the wellhead at the time of production, may elect to report and pay the gross production tax on such gas in accordance with the provisions of this section, if the first sale of such gas by the producer is to a final consumer or user of the gas. This election shall not be available to a producer if the first sale of such gas is to a purchaser who is approved and bonded to remit gross production taxes or unless prior approval of the Oklahoma Tax Commission is obtained by the producer. This election shall not be controlled by any contractual provisions between the producer and the purchaser. This election shall be made only by the producer upon forms prescribed therefor.
Upon exercise of the election to report and pay the gross production tax by a producer, the purchaser of such gas shall not be liable for the gross production tax and shall not be required to obtain a purchaser's reporting number for such gas.
2. Gas when produced and utilized in any manner, except when used in the operation of the lease or premises in the production of oil or gas, or for repressuring, shall be considered for the purpose of this article, as to the amount utilized, as gas actually produced and saved.
F. In case oil or gas is sold under circumstances where the sale price does not represent the cash price prevailing for oil or gas of like kind, character or quality in the field from which such product is produced, the Tax Commission may require the said tax to be paid upon the basis of the prevailing price then being paid at the time of production in said field for oil or gas of like kind, quality and character.
G. Pursuant to the provisions of a gas purchase contract or agreement, if the first purchaser makes payments to the producer as a result of the failure or refusal of said purchaser to take gas, said payments, for purposes of this article, are hereby deemed to be part of the gross value of gas taken according to said contract or agreement. The gross production tax shall be calculated upon the gross value, including said payments, in accordance with the provisions of this article. Gas on which the gross production tax has been paid in this manner when taken by said purchaser shall be reported as gas on which said tax has been paid. If said gas, which corresponds to such payments, is not taken but payments therefor are retained by the producer, then said payments are hereby deemed to be a premium on gas which was taken under said contract or agreement.
Laws 1963, c. 365, § 2, emerg. eff. June 22, 1963. Renumbered from § 10-1009 by Laws 1965, c. 215, § 2. Amended by Laws 1968, c. 155, § 1; Laws 1979, c. 88, § 2, emerg. eff. April 24, 1979; Laws 1983, c. 13, § 3, emerg. eff. March 23, 1983; Laws 1983, c. 275, § 6, emerg. eff. June 24, 1983; Laws 1987, c. 203, § 142, operative July 1, 1987; Laws 1992, c. 30, § 7, emerg. eff. March 30, 1992; Laws 2004, c. 444, § 2, eff. Nov. 1, 2004.
§68-1010. Information in monthly report - Reporting numbers assigned by Tax Commission - Delinquencies - Allowance of semiannual reports.
A. The tax provided for in Section 1001 et seq. of this title shall be paid to the Oklahoma Tax Commission.
B. Except as otherwise provided in subsection G of this section, every person responsible for paying or remitting the tax levied by Section 1001 et seq. of this title on the production from any lease shall file with the Tax Commission a monthly report on each lease, regardless of sales or purchases of production from the lease during the report period, under oath, on forms prescribed by the Tax Commission, giving, with other information required, the following:
1. The Tax Commission assigned production unit number, subnumber and merge number, or, with the consent of the Tax Commission, the full description of the property by lease name, subdivision of quarter section, section, township, and range, from which the oil or gas was produced, or both, as may be required by the Tax Commission;
2. The Tax Commission assigned company reporting numbers of the producer and purchaser, or with the consent of the Tax Commission, the company name;
3. The gross amount of asphalt, ores bearing lead, zinc, jack, gold, silver or copper, oil or gas produced or purchased, or, in the event of no production or no sale or purchase during the report period, zero gross amount shall be reported;
4. The kind of mineral, oil, gas, or casinghead gas produced or purchased;
5. The total value of the mineral oil, gas, or casinghead gas, at the time and place of production, including any and all premiums paid for the sale thereof, at the price paid, if purchased at the time of production;
6. If requested by the Tax Commission, the prevailing market price of oil not sold at the time of production; and
7. The amount of royalty payable on the production from the lease, if the royalty is claimed to be exempt from taxation by law, and the facts on which such claim of exemption is based and such other information pertaining to the claim as the Tax Commission may require.
Each report required by the provisions of this section shall be filed on separate forms as to product and county.
C. No person shall engage in the mining or production within this state of asphalt or ores bearing lead, zinc, jack, gold, silver, or copper, oil or gas, prior to obtaining from the Tax Commission a Tax Commission assigned producer reporting number and a Tax Commission assigned production unit number, subnumber and merge number for each producing lease. No person shall engage in the purchase of asphalt, ores bearing lead, zinc, jack, gold, silver or copper, oil or gas from a producing lease prior to obtaining from the Tax Commission a Tax Commission assigned purchaser reporting number and the Tax Commission assigned production unit number, subnumber and merge number, of the lease from which the production is to be purchased.
1. Every producer and purchaser shall make application, upon forms prescribed by the Tax Commission, for a Tax Commission assigned producer or purchaser reporting number prior to producing or purchasing production. Every producer shall obtain, by making application upon forms prescribed by the Tax Commission, a Tax Commission assigned production unit number, subnumber and merge number for each lease from which lease production will be sold or disposed before disposing of production from any lease in the state.
Provided, however, the Tax Commission shall not approve any application for a Tax Commission assigned producer or purchaser reporting number without proper confirmation that the applicant has posted the requisite surety documents with the Corporation Commission pursuant to Section 318.1 of Title 52 of the Oklahoma Statutes.
2. Every producer or purchaser shall notify the Tax Commission within thirty (30) days of any changes of any producing lease in the state as may be required by the Tax Commission. Provided, the Tax Commission may relieve producers and purchasers of their duty to file the notification required by this paragraph if the Tax Commission determines that the notification is not necessary.
3. Gross production tax reports from either the purchaser or producer shall become due on the first day of each calendar month on all products subject to the tax levied by Section 1001 et seq. of this title produced in and saved during the preceding monthly period. If such reports are not received by the Tax Commission on or before the twenty-fifth day of the second calendar month following the month of production, the reports shall become delinquent. Any requested or required amended report or any requested information submitted in response to written demand for information which is not received by the Tax Commission on or before thirty (30) days after the mailing of the request or demand by the Tax Commission or any of its employees shall be delinquent.
D. Every person required to file such forms or reports or who has been requested to file an amended report to provide information by written demand, or who has purchased oil or gas from a lease prior to being authorized by the Tax Commission to purchase production from such lease, will be subject to and may be assessed the following penalties for each delinquency:
1. Five Dollars ($5.00) per day for each Tax Commission assigned production unit number or subnumber or merge number or product code, upon which a form, report, amended report, or for which requested information in response to written demand is delinquent and for each day from the date a purchaser buys production from a lease from which it is not authorized to purchase to the date the Tax Commission approves the purchaser to buy from such lease; provided, such penalty shall not be assessed for an amount in excess of One Thousand Five Hundred Dollars ($1,500.00). The penalties may be waived by the Tax Commission or its designee for good cause shown; and
2. If within twelve (12) months after a previous assessment of penalties as provided for by this section a subsequent delinquency occurs, penalties may be assessed at the rate of Ten Dollars ($10.00) per day for each Tax Commission assigned production unit number or subnumber or merge number, or product code; provided such penalty shall not be assessed for an amount in excess of One Thousand Five Hundred Dollars ($1,500.00). The penalty thereon may be waived, in whole or in part, by the Tax Commission, for good cause shown.
The penalties prescribed herein shall be in addition to other penalties assessable by the Tax Commission pursuant to the laws of this state. The penalties prescribed by this section may be collected and shall be apportioned to the General Revenue Fund.
E. Gross production tax forms reports, amended reports, or requested information in response to written demands which are received by the Tax Commission on or after the time fixed for delinquency, but which were mailed prior to the time fixed for delinquency, shall be deemed to have been received by the Tax Commission before becoming delinquent. Postmark or registry or certified receipt showing deposit in the U.S. mails shall be conclusive evidence of the date of mailing. Provided all remittances due under such reports or amended reports must be received by the Tax Commission on or before the date specified by law regardless of when mailed.
F. In the event a person required to remit the tax levied by the provisions of Section 1001 et seq. of this title becomes delinquent in reporting or remitting the tax, or upon a determination by the Tax Commission that the state may lose tax revenues due to the difficulty of collecting same, the Tax Commission may require any person required to remit the tax to furnish a sufficient cash deposit, bond, or other security in an amount as will protect the tax revenues of this state.
G. In lieu of monthly reporting, a royalty owner taking gas in kind for the royalty owner's own consumption who is responsible for remitting the tax levied by Section 1001 et seq. of this title may file semiannual reports and remit taxes due thereunder to the Tax Commission on or before the first day of January and July of each year for the preceding six-month period. If not received on or before the last day of such month, the report and tax shall be delinquent.
Added by Laws 1963, c. 365, § 2, emerg. eff. June 22, 1963. Renumbered from § 10-1010 of this title by Laws 1965, c. 215, § 2. Amended by Laws 1965, c. 346, § 2; Laws 1968, c. 341, § 3, emerg. eff. May 9, 1968; Laws 1979, c. 88, § 3, emerg. eff. April 24, 1979; Laws 1980, c. 129, § 2, emerg. eff. April 14, 1980; Laws 1983, c. 13, § 4, emerg. eff. March 23, 1983; Laws 1983, c. 275, § 7, emerg. eff. June 24, 1983; Laws 1989, c. 28, § 1, eff. July 1, 1989; Laws 1989, c. 249, § 20, eff. July 1, 1989; Laws 1990, c. 339, § 4, emerg. eff. May 31, 1990; Laws 1992, c. 30, § 8, emerg. eff. March 31, 1992; Laws 1994, c. 278, § 12, eff. Sept. 1, 1994; Laws 2001, c. 358, § 13, eff. July 1, 2001; Laws 2004, c. 444, § 3, eff. Nov. 1, 2004.
§68-1010a. One-time payment of gross production tax - Reduction of bond - Delinquency - Reduction of amount of tax due on final return.
A. On or before November 25, 2004, all persons who have received a gross production tax purchaser reporting number or have otherwise been approved to remit gross production taxes, shall remit a one-time payment of gross production tax in an amount equal to the lesser of the average monthly remittance due from the tax remitter for the period from September 1, 2003, through August 31, 2004, or the average monthly remittance for the period from March 1, 2004, through August 31, 2004. Provided, a tax remitter may apply to the Oklahoma Tax Commission to reduce its remittance because the average monthly remittance computed under this paragraph is not reflective of the current volumes of production reported by the tax remitter. The application to remit a lesser amount must be filed with the Tax Commission on or before October 1, 2004. The decision of the Tax Commission on the application shall be final and no right of appeal to any court may be taken from such decision.
B. The Tax Commission shall reduce the amount of the bond required by the Tax Commission by the amount of the one-time payment. If the bond posted is equal to or less than the amount of the payment, the tax remitter shall be relieved from the bond requirement, upon request. The tax remitter shall neither deduct nor otherwise collect all or any portion of the one-time payment from any person or entity entitled to the proceeds of production from an oil or gas lease in the State of Oklahoma.
C. If the tax is not paid on or before November 25, 2004, the tax shall become delinquent and shall be collected in the manner provided by law for the collection of delinquent gross production taxes.
D. The amount of tax due on the final return of a tax remitter shall be reduced by the amount of the payment made pursuant to this section. If the amount due is less than the amount of the payment required by this section, the Tax Commission shall refund the balance of the payment to the tax remitter.
Added by Laws 2004, c. 444, § 4, eff. Sept. 1, 2004.
§681011. Statements as to tax on settlements.
All statements or settlement sheets for oil, gas or casinghead gas shall have stamped or written thereon the following words: "gross production tax deducted and paid, and payee accepts such deduction and authorizes payment thereof to State of Oklahoma."
Laws 1963, c. 365, § 2; Laws 1965, c. 215, § 2.
§681012. Lien for tax Liability not released by provision for payment.
The tax herein referred to shall, at all times, be and constitute a first and paramount lien against the purchaser's or producer's property as the case may be, both real and personal; and the provisions hereof, making the purchaser liable to pay such tax, and the provisions requiring the producer to pay the royalty owner's tax, in no wise releases the producer or purchaser from liability to pay same, in all cases where such tax is not paid. Laws 1963 C. 365, Sec. 2; Laws 1965 C. 215, Sec. 2.
Laws 1963, c. 365, § 2; Laws 1965, c. 215, § 2.
§681013. Rules and regulations Bond Licenses and permits Reports Logs, invoices and load tickets Stops and inspections.
A. The Tax Commission is hereby authorized and empowered to prescribe and promulgate all necessary rules and regulations for the purpose of making and filing all reports required and otherwise necessary to the enforcement of this article. The Tax Commission, at its option and discretion, may require a sufficient bond from any person charged with the making and filing of reports and the payment of the taxes levied pursuant to the provisions of this article. Said bond shall run to the State of Oklahoma and shall be conditioned upon the making and filing of reports as required by law, upon compliance with the rules and regulations of the Tax Commission, and for the prompt payment of all taxes due the state by virtue of the provisions of this article.
B. 1. Every person engaged in the transportation or hauling of petroleum oil, tank bottoms, pit oil, condensate, distillate, or other liquid hydrocarbons from which petroleum crude oil or other product subject to gross production tax is extracted, except where the transportation is by railroad tank car or by pipeline, shall secure a license and permit before engaging in such activity and shall post a surety bond with the Tax Commission. Said bond shall run to the State of Oklahoma and shall be conditioned upon compliance with the provisions of this article, the rules and regulations of the Tax Commission promulgated thereto. Said permits shall expire three (3) years after the date of issuance or renewal thereof and shall become invalid on said date unless renewed. The fee for issuance of such permit or renewal thereof shall be determined by the Commission but shall not exceed One Hundred Fifty Dollars ($150.00). A permit issued prior to the effective date of this act shall be valid until it expires.
The application for and acceptance of the permit required by this section and any renewal thereof shall be conclusively deemed consent by the applicant for the stopping of the vehicle transporting said hydrocarbons, and the inspection of the load ticket and the cargo pursuant to Section 152.6 of Title 74 of the Oklahoma Statutes.
2. Every person operating a tank truck or other conveyance except railroad tank cars or pipelines transporting any of the products described in paragraph 1 of this subsection shall have in his possession at all times during such transportation an invoice or load ticket showing, in addition to other information thereon, the following:
a. date,
b. truck permit number,
c. name of company from whom trucker obtained product being transported,
d. lease name and/or number,
e. county,
f. approximate number of barrels being transported,
g. name of product,
h. destination, and
i. signature of truck driver.
The invoice or load ticket shall be made in triplicate, one copy of which shall be retained by the company or person authorizing such transportation, one copy of which shall be retained by the person transporting such product, and one copy of which shall be furnished to the person storing, receiving, renting, or purchasing such product.
3. Any person transporting oil or gas or any deleterious substance as such term is defined by Section 139 of Title 52 of the Oklahoma Statutes shall maintain a log containing the name of the agent of the company or person owning the product which authorized the transportation.
4. All such copies of said log and invoices or load tickets shall be retained for a period of three (3) years. All copies of such log and invoices or load tickets shall be subject to inspection by the Tax Commission or its representatives or the Oklahoma Bureau of Investigation at all times during transit of such product or while same is stored or in the possession of any such person.
5. A member of the Oklahoma State Bureau of Investigation or the Oklahoma Highway Patrol, any sheriff, any salaried deputy sheriff, any Oklahoma Corporation Commission inspector or enforcement officer, shall have the authority to stop and inspect any invoices or load tickets at all times during transit of any such product. If a person transporting or hauling petroleum oil, tank bottoms, pit oil, condensate, distillate, or other liquid hydrocarbons from which petroleum crude oil or any other product subject to gross production tax is extracted, fails to produce the invoice or load ticket as required pursuant to the provisions of this section upon proper request therefor, or if the invoice or load ticket does not contain the required information, the product being transported, together with the tank truck or other conveyance, may be seized and held until a proper invoice or load ticket is furnished and the information thereon is verified by the seizing authority.
In the event a proper invoice or load ticket is not furnished the seizing authority within forty-eight (48) hours after such seizure, the seizing authority shall then deliver possession of such seized property to the sheriff of the county in which it was seized, who shall issue his receipt therefor, and inform the Tax Commission which shall declare the gross production tax, together with the amount due pursuant to the provisions of Section 1003 of this article, due immediately on the product so seized, and shall assess the same together with a penalty equal to the amount of said tax due. If the tax, penalty, additional amount due, and all accrued sheriff's costs are not paid to such sheriff within thirty (30) days after delivery to him, he will proceed to sell, without valuation as for taxes due the state, such seized property and distribute the proceeds of such sale in the same manner as is now provided for sales upon execution.
6. Every tank truck or other conveyance except railroad tank cars or pipelines used in transporting any of the products named in this section must have painted or affixed by decalcomania process in a conspicuous place in at least four-inch letters and figures the company name and Gross Production Transport Permit number which permit number shall be preceded by the initials "O.T.C.".
C. Any person transporting deleterious substances shall have in his possession at all times during such transportation an invoice or load ticket complying with paragraph 2 of subsection B of this section.
D. The application for and acceptance of the permit or license required by Section 177.2 of Title 47 of the Oklahoma Statutes shall be conclusively deemed consent by the applicant for the stopping of the vehicle transporting said substances, and the inspection of the load ticket and the cargo by the Oklahoma Highway Patrol, sheriffs, or by agents of the Oklahoma State Bureau of Investigation or Federal Bureau of Investigation pursuant to Section 152.6 of Title 74 of the Oklahoma Statutes.
Added by Laws 1963, c. 365, § 2, emerg. eff. June 22, 1963. Renumbered from § 10-1013 by Laws 1965, c. 215, § 2. Amended by Laws 1965, c. 346, § 3, emerg. eff. June 28, 1965; Laws 1981, c. 180, § 1, emerg. eff. May 19, 1981; Laws 1984, c. 123, § 1, emerg. eff. April 10, 1984; Laws 1985, c. 187, § 10, eff. Nov. 1, 1985; Laws 1992, c. 30, § 9, emerg. eff. March 31, 1992; Laws 1994, c. 258, § 8, eff. Sept. 1, 1994.
§681013a. Seller and purchaser to secure and retain invoice copies.
A copy of the invoice required to be made by transporters under Section 1013(2) shall be demanded, and retained as therein provided, by every seller and purchaser of the products on which such invoice is required. Failure of any such seller or purchaser to secure and retain such invoice copy shall constitute a misdemeanor as provided in Section 1017 of this Article. Laws 1968 C. 341, Sec. 4. emerg. eff. May 9, 1968.
Laws 1968, c. 341, § 4, emerg. eff. May 9, 1968.
§681014. Amended reports.
All producers, refiners, processors or purchasers of oil or gas shall prepare and file with the Tax Commission, at any time upon the demand of the Tax Commission, such amended producers', refiners', processors' or purchasers' reports as may be necessary to show the particular leasehold and also the particular well or wells from which oil or gas produced, refined, processed or purchased by them was produced.
Laws 1963, c. 365, § 2, emerg. eff. June 22, 1963. Renumbered from § 10-1014 by Laws 1965, c. 215, § 2. Amended by Laws 1992, c. 30, § 10, emerg. eff. March 30, 1992.
§681015. Refiners and processors to obtain permit Bond - Failure to secure permit.
All persons operating refineries or processing plants engaged in the business of refining or processing of oil or gas, upon which there is paid or payable gross production tax, shall secure a permit which shall be in the form of a license from the Tax Commission, by making application upon forms prescribed by it, and the Tax Commission may, at its option and discretion, require a bond from any such person before the issuance of such permit; any bond required herein by the Tax Commission shall be for the purpose of indemnifying the State of Oklahoma against loss by reason of nonpayment of gross production tax upon any oil or gas refined or processed in such refineries or processing plants. In all cases where such permit is not secured, the State of Oklahoma may institute, upon relation of the Tax Commission, suit to restrain such person from operating such refinery or processing plant, until such permit is secured.
Laws 1963, c. 365, § 2, emerg. eff. June 22, 1963. Renumbered from § 10-1015 by Laws 1965, c. 215, § 2. Amended by Laws 1985, c. 187, § 11, eff. Nov. 1, 1985; Laws 1992, c. 30, § 11, emerg. eff. March 30, 1992.
§681015.1. Oil reclamation Permits.
A. All persons operating reclaiming plants, or reclaiming oil, upon which there is paid or payable gross production tax, shall secure a permit which shall be in the form of a license from the Tax Commission, by making application upon forms prescribed by it. The Tax Commission may, at its option and discretion, require a bond from any such person before the issuance of such permit. Any bond required herein by the Tax Commission shall be for the purpose of indemnifying the State of Oklahoma against loss by reason of nonpayment of gross production tax upon any oil reclaiming plants. In all cases where such permit is not secured, the State of Oklahoma may institute, upon relation of the Tax Commission, suit to restrain such person from operating such reclaiming plant, until such permit is secured.
B. 1. Said permits shall expire three (3) years after the date of issuance or renewal thereof and shall become invalid on said date unless renewed. The fee for issuance of such permit or renewal thereof shall be determined by the Commission but shall not exceed One Hundred Fifty Dollars ($150.00).
2. A permit issued prior to the effective date of this act shall be valid until it expires.
C. The application for and acceptance of the permit required by subsection A of this section and any renewal thereof shall be conclusively deemed consent by the applicant for the inspections of the property of the applicant by the Oklahoma Tax Commission as authorized by Section 206 of this title and by the Oklahoma State Bureau of Investigation.
Added by Laws 1985, c. 187, § 9, eff. Nov. 1, 1985. Amended by Laws 1992, c. 30, § 12, emerg. eff. March 31, 1992; Laws 1994, c. 258, § 9, eff. Sept. 1, 1994.
§681016. Distribution of proceeds to General Revenue Fund in certain cases.
In all cases where gross production tax is paid to the Tax Commission and the reports accompanying such tax are insufficient to enable the Tax Commission to determine the source, by wells or leasehold, the oil, gas or casinghead gas upon which said gross production tax is paid and where the Tax Commission is unable to secure such information as will enable it to determine the source of such oil, gas or casinghead gas, it shall be the duty of the Tax Commission, at the expiration of six (6) months from the date of payment of such gross production tax, to apportion and distribute the same to the General Revenue Fund of the State of Oklahoma.
Laws 1963, c. 365, § 2; Laws 1965, c. 215, § 2.
§681017. Noncompliance by producers, refiners, processors or purchasers.
Failure on the part of any person, producer, refiner, processor, reclaimer, transporter, or purchaser of oil, petroleum oil, tank bottoms, pit oil, liquid hydrocarbons, natural gas, or casinghead gas, to comply with the provisions of this article shall be deemed a misdemeanor, and upon conviction therefor, such person, producer, refiner, processor, reclaimer, transporter, or purchaser of oil or gas shall be punished by the imposition of a fine of not to exceed One Thousand Dollars ($1,000.00), or of a jail sentence of not to exceed six (6) months, or by the imposition of both such fine and imprisonment. Each day's failure to comply with the provisions of this article within the period of time fixed therein, shall constitute a separate offense.
Laws 1963, c. 365, § 2; Laws 1965, c. 215, § 2.
§681018. Tax on uranium.
The purpose of the following sections of this article is to broaden the tax provided for in the preceding sections, so as to subject to gross production tax the interest of all persons in ore bearing uranium as the term uranium is hereinafter defined. In the event the ore bears any other metal, mineral, substance or matter subjected to the aforesaid gross production tax, the tax levied by Section 1019 shall be in addition to said tax. Provided, however, that any mineral, substance or matter subjected to the tax levied by the preceding sections of this article shall not be subjected to the tax levied by Section 1019.
Laws 1963, c. 365, § 2; Laws 1965, c. 215, § 2.
§681019. Definitions.
The following words, terms and phrases shall when used in Sections 1017 through 1020, except where the context clearly indicates a different meaning, have the following meaning:
(a) The word "Tax Commission" shall mean the Oklahoma Tax Commission.
(b) The word "person" shall mean and include an individual, a limited liability company, a corporation, a trust and any other entity recognized as such under the laws of the State of Oklahoma.
(c) The word "ore" or "ores" shall mean and include alluvium soil or earth or any sedimentary formation or rocks, or intrusive or igneous dike, vein, or fissure, or any liquid substance or matter which bears uranium, thorium, and any other fissionable material together with vanadium, manganese, and nonfissionable materials associated with fissionable materials or which bear tin, vanadium, molybdenum, bismuth and any other metal or mineral, excepting coal only, provided a tax is not levied in connection therewith under the Gross Production Act referred to in Section 1001 hereof.
(d) The word "uranium" shall mean and include uranium, thorium, and any other fissionable material together with vanadium, manganese, and nonfissionable materials associated with fissionable materials, also tin, vanadium, molybdenum, bismuth and any other metal or mineral, excepting coal only, provided a tax is not levied in connection therewith under Sections 1001 1016 of this Code.
(e) The words "gross value" mean the value of ore immediately after being mined or produced, therefore, the amount received or the amount that could or should have been received for ore if sold, including any and all premiums, inducement payments, bonus payments, or subsidies. In case ore is sold under circumstances where the sales price does not represent the cash price thereof prevailing for ore of like kinds, character or quality in the area from which the ore is produced, the Tax Commission may require the tax to be paid upon the basis of the prevailing price then being paid at the time of production thereof in said area for ore of like kind, quality and character.
Laws 1963, c. 365, § 2, emerg. eff. June 22, 1963. Renumbered from § 10-1019 by Laws 1965, c. 215, § 2. Amended by Laws 1993, c. 366, § 37, eff. Sept. 1, 1993.
§681020. Application of Sections 1017 to 1020.
A gross production tax equal to five percent (5%) of the gross value of all ores bearing uranium, as that term is defined in the preceding section, that are mined or produced in this state, is hereby levied.
(a) The tax hereby levied shall apply and attach immediately upon ore bearing uranium being mined or produced, provided the ore is mined or produced for the purpose of obtaining uranium or is in fact so used. The tax shall be measured by the gross value of the ore at the time and place same is mined or produced.
(b) The payment of the taxes herein imposed shall be in full, and in lieu of all taxes by the state, counties, cities, towns, school districts and other municipalities upon any property rights attached to or inherent in the right to ore upon producing leases for the mining ores bearing uranium, upon the uranium rights and privileges to the uranium aforesaid belonging or appertaining to land, upon the machinery, appliances and equipment used in and around any mine producing ore and actually used in the operation of such mine; and also upon the ores bearing uranium hereinbefore mentioned during the tax year in which the same is produced, and upon any investment in any of the leases, rights, privileges, minerals or other property hereinbefore in this paragraph mentioned or described; and any interest in the land, other than that herein enumerated, and ores bearing uranium which are mined, (produced) and on hand at the date as of which property is assessed for general and ad valorem taxation for any subsequent tax year, shall be assessed and taxed as other property within the taxing district in which such property is situated at the time.
(c) No equipment, material or property shall be exempt from the payment of ad valorem tax by reason of the payment of ad valorem tax by reason of the payment of the gross production tax as herein provided except such equipment, machinery, tools, materials or property as is actually necessary and being used and in use in the production of ores bearing uranium; and it is expressly declared that no ice plants, hospitals, office buildings, garages, residences, gasoline extractions or absorption plants, water systems, fuel systems, rooming houses and other buildings, nor any equipment or material used in connection therewith shall be exempt from ad valorem tax.
(d) The State Board of Equalization, upon its own initiative, may, and upon complaint of any person who claims that he is taxed too great a rate hereunder shall, take testimony to determine whether the taxes herein imposed are greater, or less, than the general ad valorem tax for all purposes would be on the property of such producer subject to taxation in the district or districts where the same is situated and also the value of ore, or of the mining ore rights, the machinery, equipment or appliances used in the actual operation of in and around any such mine, the value of the ore produced and any other element of value in lieu of which the tax herein is levied. The said Board shall have power and it shall be its duty to raise or lower the rate herein imposed to conform thereto. An appeal may be had from the decision fo the State Board of Equalization thereon, by any person aggrieved to the Supreme Court, in like manner and with like effect as provided by law in other appeals from said Board to said Court; provided, that after such tax has been collected and distributed or paid without protest, no complaint with reference to rate thereof shall be heard or considered.
Laws 1963, c. 365, § 2; Laws 1965, c. 215, § 2.
§681021. Reports and collection Apportionment.
The gross production tax levied by the preceding section shall be reported to and collected by the Tax Commission at the same time and in the same manner as is now provided by law for the collection of gross production tax on ore. Upon being collected the taxes shall be apportioned precisely like taxes collected under Sections 10011016 of this Code. On ores sold at the time of production, the tax thereon shall be paid by the producer, who is hereby authorized to deduct in making settlement with the producer and/or royalty owner the amount of tax so paid; provided, that in the event ore on which such tax becomes due is not sold at the time of production, but is retained by the producer, the tax on such ore not so sold shall be paid by the producer for himself, including the tax due on royalty ore not sold; provided, further, that in settlement with the royalty owner, such producer shall have the right to deduct the amount of tax so paid on royalty ore, or to deduct therefrom royalty ore equivalent in value at the time such tax becomes due with the amount of tax paid.
Laws 1963, c. 365, § 2; Laws 1965, c. 215, § 2.
§681022. Conditional increase in value of natural gas Handling and distribution of tax levied thereon.
Section 1022. When an increase in the gross value of petroleum or other crude or mineral oil, natural gas, casinghead gas or liquids extracted therefrom sold by a producer is subject to the approval of an agency of the United States of America or a court of competent jurisdiction adjudicating an appeal from said agency, the gross production tax provided for in this article on any such proposed increase in gross value when collected by a producer shall be separately reported and conditionally paid, subject to and pending the final outcome of any proceeding by such agency or court relating to a determination of the amount of such increase in gross value; provided, however that nothing herein shall be construed to impose any duty upon a producer to collect any proposed increase in gross value; and provided further, that "gross value" or "increase in gross value" as used in this section shall mean the amount a producer is collecting for the sale of any petroleum or other crude or mineral oil, natural gas, casinghead gas or liquids extracted therefrom sold which is subject to the jurisdiction of such agency or court. All monies so conditionally collected by the Tax Commission under the provisions of this section shall be accounted for in the following manner:
(a) At least once each month the Tax Commission shall deposit such collections in a special account in a bank or banks approved as a depository for monies of the State of Oklahoma. Each bank in which such monies are deposited shall credit the account at the end of each calendar quarter with the highest rate of interest then being paid by such bank for deposited monies of the State of Oklahoma, calculated on the total daily average balance on deposit during such calendar quarter.
(b) When a producer or purchaser gives written notice to the Tax Commission that such agency or court has, by final order, disapproved, in whole or in part, the proposed increase in gross value, then the Tax Commission shall, within thirty (30) days after receipt of such notice, withdraw from the bank holding such monies an amount of money equal to the tax conditionally paid on the proposed increase in gross value which has been disapproved, together with the interest earned on such money, and remit it to the person, firm, association or corporation which conditionally paid such tax.
(c) When such agency or court approves, by final order, the proposed increase in gross value, in whole or in part, the producer or purchaser involved having paid the tax conditionally shall immediately give written notice of such approval to the Tax Commission and it shall promptly withdraw from the bank holding such monies an amount of money equal to said tax conditionally paid on the proposed increase in gross value which has been approved, together with the interest earned on such money, and shall distribute the same as provided by the law then in force for the distribution of gross production taxes.
Laws 1968, c. 155, § 2, emerg. eff. April 9, 1968; Laws 1978, c. 211, § 5, emerg. eff. April 19, 1978.
§681023. Downward adjustment of value of oil and gas Refund of excess tax.
Section 1023. In the event the gross value of petroleum or other crude or mineral oil, natural gas, casinghead gas or liquids extracted therefrom is adjusted downward by any agency of the United States of America or a court of competent jurisdiction adjudicating an appeal from said agency, then the amount of the tax paid in excess of the tax due on the adjusted gross value shall be considered excess tax. Within one (1) year following the final determination of the gross value, any producer or purchaser who has paid any such excess tax may apply for a refund, and the Tax Commission, upon proper finding, shall have the authority to refund the amount of excess tax paid. Any refund may, at the discretion of the Tax Commission, be made in the form of a credit against future tax payments.
Laws 1978, c. 211, § 6, emerg. eff. April 19, 1978.
§681024. Release of information Costs Civil and criminal liability - Disposition of funds - Examination of records and files - Construction with other sections.
A. The Tax Commission may upon written request, release to any person the volume of production, during any specified available period of time, of any substance taxable pursuant to the provisions of this article from any lease lawfully plugged, pursuant to the laws of this state after certification of said plugging by the Oklahoma Corporation Commission.
B. The Tax Commission may, upon oral or written request, release the lease name, legal description, Oklahoma Tax Commission assigned production unit number for any lease or unit in this state and the Oklahoma Tax Commission assigned purchaser or producer reporting number and purchaser or producer name to any person.
C. The Tax Commission may, upon written request, release the volume of production, producing formation and well classification, active or inactive, on a lease by lease basis to any person.
D. The Tax Commission shall, upon written request, release information provided in the Reclaimer's and Transporters Monthly Tax Report of Lease Production Stored and Sold, OTC Form 323A-7-81, or any form succeeding this form, to any person.
E. The Tax Commission shall, upon written request, release the following information to any person executing an affidavit, under penalty of perjury, declaring that they are an interest owner in the well, lease or unit for which the information is requested:
1. The gross, exempt and net volumes and values of production, tax reimbursements, additional values and taxes remitted thereon, during any available period of time of any substance taxable pursuant to the provisions of this article or the Petroleum Excise Tax of this state.
2. The lease name, legal description, industry or company well or lease unique number, Oklahoma Tax Commission assigned production unit number for any lease or unit in this state and the Oklahoma Tax Commission assigned purchaser or producer reporting number and purchaser or producer name.
3. The producing formation and well classification, active or inactive, on a lease by lease basis and if available, on a well by well basis, and British Thermal Unit content, NGPA classification, gas code, gravity, tier, category and oil class.
F. It is specifically provided that:
1. The Tax Commission shall establish a schedule of costs for the furnishing of the information in accordance with the provisions of subsections A and B of this section and shall collect said costs;
2. No civil or criminal liability shall attach to any member of the Tax Commission, or to any agents, servants, or employees of the Tax Commission for any error or omission in the preparation and publication of the requested information;
3. No costs shall be charged to the Oklahoma Corporation Commission Oil and Gas Conservation Division or Energy Conservation Services Division or to the Oklahoma Geological Survey for examination of the files and records of the Tax Commission; and
4. All funds collected pursuant to the provisions of this section shall be paid to the State Treasury and deposited to the credit of the Tax Commission Revolving Fund.
G. A duly authorized agent of the Oklahoma Corporation Commission Oil and Gas Conservation Division or Energy Conservation Services Division or of the Oklahoma Geological Survey may examine necessary records and files of the Tax Commission relating to the gross production tax for the purpose of estimating or forecasting reserves or production of oil or gas. Such examination shall be limited to information of volume of production, producing formation and well classification, active or inactive, on a lease by lease basis.
H. A duly authorized agent of the Commissioners of the Land Office may examine necessary records and files of the Tax Commission relating to the gross production tax for the purpose of determining the amount of erroneous payment of gross production tax made to the Oklahoma Tax Commission after January 1, 1978.
I. The provisions of this section shall be exceptions to the provisions of Sections 205 and 205.1 of this title and said sections shall be strictly construed against the disclosure of any other information contained in the records and files of the Tax Commission except as otherwise provided by law.
J. Any violation of the provisions of this section shall constitute a misdemeanor and shall be punishable as provided for in Section 205 of this title.
Laws 1979, c. 100, § 1; Laws 1981, c. 76, § 1; Laws 1983, c. 107, § 1, eff. Nov. 1, 1983; Laws 1986, c. 223, § 40, operative July 1, 1986; Laws 1988, c. 281, § 20, operative July 1, 1988; Laws 1990, c. 310, § 4, eff. Sept. 1, 1990; Laws 1991, c. 224, § 2, emerg. eff. May 23, 1991; Laws 1992, c. 30, § 13, emerg. eff. March 30, 1992; Laws 1992, c. 392, § 2, emerg. eff. June 9, 1992.
§68-1101. Excise tax on oil - Additional tax.
A. Prior to July 1, 2006, and as provided in Section 1103.1 of this title, there is hereby levied, in addition to the gross production tax, an excise tax equal to ninety-five one thousandths of one percent (.095 of 1%) of the gross value on each and every barrel of petroleum oil produced in the State of Oklahoma which is subject to gross production tax in the State of Oklahoma. Such excise tax of ninety-five one thousandths of one percent (.095 of 1%) of the gross value shall be reported to and collected by the Tax Commission at the same time and in the same manner as is provided by law for the collection of gross production tax on petroleum oil. On petroleum oil sold at the time of production, the excise tax thereon shall be paid by the purchaser, who is hereby authorized to deduct in making settlement with the producer and/or royalty owner the amount of tax so paid; provided, that in the event oil on which such tax becomes due is not sold at the time of production, but is retained by the producer, the tax on such oil not so sold shall be paid by the producer for himself, including the tax due on royalty oil not sold; and provided, further, that in settlement with royalty owner, such producer shall have the right to deduct the amount of tax so paid on royalty oil, or to deduct therefrom royalty oil equivalent in value at the time such tax becomes due with the amount of tax paid.
The provisions of this subsection shall terminate on June 30, 2006.
B. Beginning on July 1, 2006, there is hereby levied, in addition to the gross production tax, an excise tax equal to eighty-five one thousandths of one percent (.085 of 1%) of the gross value on each and every barrel of petroleum oil produced in the State