Current through Vol. 42, No. 1, September 16, 2024
(1)
Hospitals, sanitariums, nursing homes and emergency medical care.
Hospitals and sanitariums are primarily engaged in the business of selling
services, and for the purposes of the Sales Tax Code are considered to be the
consumers or users of all tangible personal property and services used in the
operation of the institution. Thus, the gross proceeds derived from sales of
tangible personal property and certain services to such institutions are
subject to tax. This paragraph applies to all hospitals, sanitariums and
nursing homes, including those owned or operated by churches, fraternities,
cooperatives, or any other organization, except those operated by the Federal
Government, the State, or a political subdivision thereof.
(2)
Withdrawals from stock. If
any business purchases tangible personal property for resale, manufacturing or
further processing and that business withdraws tangible personal property,
either from its inventory or after such inventory has been manufactured or
processed for its own use or consumption, that business has made a taxable sale
and the value of the property withdrawn is taxable at its "sales
value", as defined in OAC
710:65-1-2. The
business withdrawing tangible personal property from inventory should include
the "sales value" of such property in gross receipts or gross
proceeds on its sales tax report for the month the property was
withdrawn.
(3)
Contractors. Contractors are consumers or users, and must pay
sales tax on all taxable services and tangible personal property, including
materials, supplies, and equipment, purchased to develop and improve real
property. Examples of contractors subject to this paragraph are: painting
contractors, road contractors, grading and excavating contractors, electrical
contractors, plumbing contractors, and other persons engaged in a contractual
arrangement to make improvements on real property. A person working for a
salary or wage is not considered a contractor. The Sales Tax Code limits the
ability of contractors to make purchases exempt from sales tax based on the
exempt status of another entity to the following situations: [See:
710:65-7-6
and
710:65-7-13]
(A) A contractor who has a public contract,
or a subcontractor to that public contract, with an Oklahoma municipality,
county, public school district, city-county library system, an institution of
the Oklahoma System of Higher Education, a rural water district, the Grand
River Dam Authority, the Northeast Oklahoma Public Facilities Authority, the
Oklahoma Municipal Power Authority, the City of Tulsa-Rogers County Port
Authority, the Broken Bow Economic Development Authority, the Muskogee
City-County Port Authority, the Oklahoma Ordnance Works Authority, the Durant
Industrial Authority, the Ardmore Development Authority, the Oklahoma
Department of Veterans Affairs, the Central Oklahoma Master Conservancy
District, Arbuckle Master Conservancy District, Fort Cobb Master Conservancy
District, Foss Reservoir Master Conservancy District, Mountain Park Master
Conservancy District, Waurika Lake Master Conservancy District or the Office of
Management and Enterprise Services only when carrying out a public construction
contract on behalf of the Oklahoma Department of Veterans Affairs and effective
July 1, 2022, the University Hospitals Trust may make purchases of tangible
personal property or services, which are necessary for carrying out the public
contract, exempt from sales tax.
(B) A contractor who has entered into a
contract with a private institution of higher education or with a private
elementary or secondary institution, may make purchases of tangible personal
property or services, including materials, supplies and equipment used in the
construction of buildings owned and used by the institution for educational
purposes exempt from sales tax.
(C)
A contractor who has contracted with an agricultural permit holder to construct
a facility which will be used directly in the production of any livestock,
including facilities used in the production and storage of feed for livestock
owned by the agricultural permit holder, may make purchases of materials,
supplies and equipment necessary to fulfill the contract, exempt from sales
tax.
(D) A contractor may make
purchases of materials, supplies and equipment necessary to fulfill a contract,
exempt from sales tax, for use on campus construction projects for the benefit
of institutions of the Oklahoma State System of Higher Education or private
institutions of higher education accredited by the Oklahoma State Regents for
Higher Education. The projects must be financed by or through the use of
nonprofit entities which are exempt from taxation pursuant to Section 501(c)(3)
of the Internal Revenue Code.
(E) A
contractor may make purchases of machinery, equipment, fuels, and chemicals or
other materials, exempt from sales tax, which will be incorporated into and
directly used or consumed in the process of treatment of hazardous waste,
pursuant to OAC
710:65-13-80.
Contractors claiming exemption for purchases to be used to remediate hazardous
wastes should obtain a letter certifying the exemption status from the Tax
Commission by following the procedures set out in
710:65-13-80,
and provide a copy of the letter to vendors, pursuant to subsection (f) of that
rule.
(F) A contractor, or a
subcontractor to such contractor, with whom a church has duly entered into a
construction contract may make purchases of tangible personal property or
services exempt from sales tax which are necessary for carrying out such
construction contract.
(G) A
contractor, or a subcontractor to such contractor, may make purchases of
tangible personal property which is to be consumed or incorporated in
the construction or expansion of a facility for a corporation organized under
Section
437 et
seq. of Title 18 of the Oklahoma Statutes as a rural electric
cooperative exempt from sales tax.
(H) A contractor, or a subcontractor to such
contractor, may make purchases of tangible personal property or services
pursuant to a contractual relationship with a child care center, qualified for
exemption pursuant 68 O.S. § 1356(69), for construction and improvement of
buildings and other structures owned by the child care center and operated for
educational purposes exempt from sales tax.
(I) A contractor, or a subcontractor to such
contractor, may make purchases of tangible personal property or services exempt
from sales tax pursuant to a contractual relationship with a manufacturer for
the construction and improvement of manufacturing goods, wares, merchandise,
property, machinery and equipment for use in a manufacturing operation
classified under NAICS No. 324110 (Petroleum Refineries).
(4)
Repairmen. Repairmen are
persons engaged in the business of repairing tangible personal property. Parts
incidental to the repair service which are consumed/used in making repairs are
taxable to the repairman as a consumer/user. [See: 68 O.S. §
1352]
Amended at 11 Ok Reg
3521, eff 6-26-94; Amended at 14 Ok Reg 2711, eff 6-26-97; Amended at 15 Ok Reg
2827, eff 6-25-98; Amended at 16 Ok Reg 2653, eff 6-25-99; Amended at 18 Ok Reg
2823, eff 6-25-01; Amended at 19 Ok Reg 1859, eff 6-13-02; Amended at 21 Ok Reg
2581, eff 6-25-04; Amended at 22 Ok Reg 1561, eff 6-11-05; Amended at 24 Ok Reg
2397, eff 6-25-07; Amended at 25 Ok Reg 2070, eff 7-1-08; Amended at 26 Ok Reg
2354, eff 6-25-09; Amended at 29 Ok Reg 542, eff
5-11-12
