Oklahoma Administrative Code
Title 260 - Office of Management and Enterprise Services
Chapter 135 - Service Oklahoma
Subchapter 7 - Motor Vehicle
Part 45 - VEHICLE SALES TAX AND MOTOR VEHICLE EXCISE TAX
Section 260:135-7-244 - Excise tax levy and exemptions
Universal Citation: OK Admin Code 260:135-7-244
Current through Vol. 42, No. 1, September 16, 2024
(a) General levy on transfer of legal ownership. Excise tax is levied on every exchange of legal ownership on any vehicle registered or being registered in Oklahoma unless a specific tax exemption applies.
(b) Exemptions. Following is information on some of the more frequently encountered exempt situations:
(1)
Husband and wife; parent and
child. Only transfers made without consideration between husband and
wife, parent and child, or vice versa, are exempt. A Family Affidavit (Form
794) must be included with the other supporting documentation and is to be
attached to the title documentation. This exemption does not apply to transfers
between in-laws or grandparents to grandchildren.
(2)
Out-of-state residence and
registration; nonresident military. Any vehicle brought into Oklahoma by
a person formerly living in another state is exempt, if the person owned and
registered the vehicle in such other state of his residence at least sixty (60)
days prior to the time itis required to be registered in Oklahoma. Nonresident
members of the Armed Forces stationed in Oklahoma may register their vehicle
without excise tax if the vehicle has been registered by them in another state
(60 day limit does not apply).
(3)
Governmental entities. Any vehicle is exempt if registered by the
State of Oklahoma or any political subdivision thereof. Additionally, vehicles
leased by a county, municipality, or a school district are exempt from the
excise tax.
(4)
Title by
inheritance. Any vehicle on which legal ownership was obtained by
inheritance is exempt from the levy of the excise tax.
(5)
Certain transfers of corporations
and partnerships. Legal ownership of vehicles obtained by transfer as
set out in Section
2105(9) of Title
68 may also be exempt.
(6)
Rural water districts. A
rural water district is exempt.
(7)
Rural electric cooperatives. A rural electric coop is
exempt.
(8)
Federal reserve
banks. Federal reserve banks are exempt.
(9)
Vehicles registered under
International Registration Plan. Transfer of vehicles registered under
the International Registration Plan between lessor and lessee at the
termination of the lease are exempt from the excise tax.
(10)
Short term rentals by rental
companies. Vehicles acquired by rental companies not to be rented for
terms of more than 90 days may be registered and titled by the rental agency
exempt from excise tax. An Oklahoma title branded "Rental Vehicle" will be
issued. If the vehicle is sold less than one (1) year from date of issuance of
the title, the rental agency must pay the excise tax that would have been due
on the vehicle, plus a 20% penalty before transferring the vehicle, unless the
vehicle is being transferred to the manufacturer or its financing company, to a
franchised dealer of the same line/make of the vehicle to be transferred, or to
anyone, if the vehicle is in a salvage condition (salvage or junk
title).
(11)
Foreclosure of
lien or mortgage; insurance contracts. Any vehicle, the ownership of
which was obtained by the lienholder or mortgagee under or by foreclosure of a
lien or mortgage in the manner provided by law or to the insurer under
subrogated rights arising by reason of loss under an insurance contract, is
exempt from excise tax.
(12)
New vehicles registered by new car dealers. A new vehicle
registered by a new vehicle dealer is exempt for a period of four (4)
months.
(13)
Insurance
companies. An insurance company may obtain title to a vehicle on which
they paid a loss exempt from excise tax.
(14)
Revocable trusts. Transfers
made without consideration between an individual and an express trust which
that individual or the spouse, child or parent of that individual has a right
to revoke are exempt.
(15)
Limited liability companies. A limited liability company is a
combination of a corporate and a partnership business organization structure.
Excise tax exemption applies to the following transfers:
(A) Transfers to the limited liability
company if former owners are members of the limited liability company and the
interest in the company is in proportion to interest in the vehicle prior to
the transfer. A notarized bill of sale indicating such will be required as
supporting documentation.
(B)
Transfers of ownership from a limited liability company to members when a
dissolution is made. A notarized affidavit indicating such is
required.
(16)
Vehicle lease or lease-purchase agreements. Transfers of ownership
of a vehicle acquired by a lessee are exempt from excise tax, provided the
vehicle excise tax was paid at the time of the initial lease or lease-purchase
agreement and an Oklahoma title was issued.
(17)
Fire protection districts.
Vehicles acquired by a fire protection district are exempt from the levy of
excise tax.
(18)
Exemption
for disabled veterans in receipt of compensation at the one hundred percent
rate. Persons who have been honorably discharged from active service in
any branch of the Armed Forces of the United States or Oklahoma National Guard,
and who have been certified by the United States Department of Veterans
Affairs, or its successor, to be in receipt of compensation at the one hundred
percent (100%) rate for a permanent disability sustained through military
action or accident or resulting from a disease contracted while in such service
is exempt from vehicle excise tax for one (1) vehicle in a consecutive three
(3) year period, unless the vehicle is a replacement fora vehicle which was
destroyed and declared by the insurer to be a total loss claim.
(A) To prove eligibility a disabled veteran
must submit either an Oklahoma Tax Commission exemption card with the notation
"Sales Tax Exemption:100% Disabled Veteran" or a letter from the United States
Department of Veterans Affairs, its successor, or the Armed Forces of the
United States, certifying that the veteran is receiving disability compensation
at the 100% rate.
(B) In order to
qualify for the exemption, the vehicle must have been purchased on or after
July 1, 2005 and the name of the eligible disabled veteran must be included as
an owner on the vehicle title.
(C)
The consecutive three (3) year period computation is to be based upon the
actual purchase date of the vehicle(s), as reflected in the ownership
assignment date on the MSO or title certificate surrendered to the Commission
at time of title application. To qualify for this excise tax exemption, the
actual date of purchase of the vehicle must be more than three (3) years
removed from the date of purchase of the prior vehicle to which the exemption
was most recently applied.
(D) To
qualify for an excise tax waiver under the total loss claim exception to the
three (3) year restriction, documentation confirming the insurer's total loss
claim declaration must be presented for review and approval by the Tax
Commission.
(19)
Exemption for repossessed vehicle transferred back to former
owner. Ownership of a vehicle transferred by the repossessor back to the
former Oklahoma title record owner(s) within thirty (30) days of issuance of
the repossession title.
(A) Ownership must be
identical to that reflected in the Oklahoma title record immediately prior to
issuance of the repossession title. Ownership (as assigned by the repossessor)
may reflect an additional name without the assessment of excise tax only if an
exemption exists between the owners. Otherwise, any change in ownership will
result in the assessment of excise tax.
(B) Title assignment to the former owner(s)
must be completed within thirty (30) days of issuance of the repossession
title.
Disclaimer: These regulations may not be the most recent version. Oklahoma may have more current or accurate information. We make no warranties or guarantees about the accuracy, completeness, or adequacy of the information contained on this site or the information linked to on the state site. Please check official sources.
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