Oklahoma Administrative Code
Title 710 - Oklahoma Tax Commission
Chapter 65 - Sales and Use Tax
Subchapter 13 - Sales and Use Tax Exemptions
Part 29 - MANUFACTURING
Section 710:65-13-155 - Exemption for sales of tangible personal property to be consumed or incorporated in the construction or expansion of a qualified aircraft maintenance or manufacturing facility
Universal Citation: OK Admin Code 710:65-13-155
Current through Vol. 42, No. 1, September 16, 2024
(a) Qualification. Sales of tangible personal property to a qualified aircraft maintenance or manufacturing facility to be consumed or incorporated in a new facility or to expand an existing facility are exempt from sales and use tax. For purposes of this exemption, sales made to a contractor or sub-contractor who has previously entered into a contractual relationship with a qualified aircraft maintenance or manufacturing facility for construction or expansion of a facility shall be considered sales made to the qualified aircraft maintenance or manufacturing facility.
(1) For purposes of this exemption
"facility" is defined as buildings and land improvements used in
maintaining or manufacturing aircraft, except that up to ten percent (10%) of
the square feet of such building may be devoted to office space used to provide
clerical support for the manufacturing operation.
(2) For purposes of this exemption,
"aircraft maintenance or manufacturing facility" is defined as any
enterprise whose total cost of construction exceeds the sum of Five Million
Dollars ($5,000,000.00) and which employs at least Two Hundred Fifty (250) new
full-time-equivalent employees, as certified by the Employment Security
Commission, upon completion of the facility.
(b) Limitations.
(1) The exemption pertains only to sales of
tangible personal property made after the effective date of the statute. The
exemption applies to sales of tangible personal property made to a contractor
or sub-contractor to be consumed or incorporated in the construction of a new
or expanded facility pursuant to a contract with an aircraft maintenance or
manufacturing facility, as well as to sales of tangible personal property made
to an aircraft maintenance or manufacturing facility.
(2) No exemption shall be granted if the
aircraft maintenance or manufacturing facility fails to file both the
documentation required below with the Commission within thirty-six (36) months
of first purchase and the required certification issued by the Employment
Security Commission within sixty (60) months of first purchase.
(c) Administration. Pursuant to statute, the exemption outlined above will be administered as a refund for state and local taxes paid to the vendor or, in the case of use tax, self-remitted to the State of Oklahoma.
(d) Application process.
(1)
Application. All persons who
believe that they fall within the exemption provided shall file an
Application/Intent to Qualify with the Commission. The Application/Intent to
Qualify shall be on forms provided by the Commission and shall include, as
attachments, specifications of the new or expanded facility, a complete
description of the maintenance, repair or manufacturing that will take place
within the facility, and other information requested by the
Commission.
(2)
Review. Upon receipt of the Application, the Application will be
reviewed by the Commission for completeness and compliance with the exemption.
A copy of the Application will be forwarded to the Employment Security
Commission for establishment of the entity's base line employment. The
applicant will be notified of any action taken regarding the Application by the
Commission.
(e) Claims process.
(1)
Records required for claim.
(A)
For each purchase made, the entity who believes that it will be certified shall
file the following documentation with the Commission on forms provided for that
purpose by the Commission:
(i) Invoice
indicating the amount of state and local taxes billed to the aircraft
maintenance or manufacturing facility;
(ii) Affidavit of the vendor of the tangible
personal property that state and local sales tax reflected on that invoice has
not been credited, rebated, or refunded to the aircraft maintenance or
manufacturing facility, but rather, that the sales tax charged has been
collected by the vendor and remitted to the Tax Commission. Any number of
invoices from the same vendor may be attached to one affidavit so long as the
affidavit covers all invoices attached;
(iii) All additional documentation required
to be submitted by the Commission.
(B) In cases where the state and local sales
tax was paid by a contractor or sub-contractor who has previously entered into
a contract with an aircraft maintenance or manufacturing facility, the aircraft
maintenance or manufacturing facility shall file with the Commission the
following:
(i) Invoices indicating the amount
of state and local sales taxes billed;
(ii) An affidavit from the contractor or
sub-contractor who made the purchase of tangible personal property stating that
the sales tax reflected on the attached invoice is based on state and local
sales tax paid by the contractor or sub-contractor on tangible personal
property to be consumed or incorporated in a construction of new or expanded
aircraft maintenance or manufacturing facility and that the amount of state and
local sales tax claimed was paid by the contractor or sub-contractor to the
vendor and no credit, refund or rebate has been claimed by the contractor or
sub-contractor. Any number of invoices can be attached to an affidavit of a
contractor or sub-contractor provided that all invoices attached reflect
purchases made by that contractor or sub-contractor and are reflected in the
affidavit;
(iii) Additional
documentation required by the Commission.
(2)
Filing claims. At the option
of the entity who believes it will be certified as an aircraft maintenance or
manufacturing facility, the documentation can be filed monthly, quarterly,
semi-annually, or annually. However, all documentation must be filed no later
than thirty-six (36) months after first purchase is made.
(3)
Review. The Commission will
review the documentation submitted and determine within thirty (30) days
whether the refund claimed will be allowed. In the event that the claim is
denied, the person who submitted the documentation will be notified by the
Commission as to the reason for the denial. The person who submitted the
documentation will similarly be notified that a claim has been
approved.
(f) Fiscal procedure. Each month, the Commission shall transfer from sales tax collected, to an account designated by the Commission, the estimated amount of claims approved by the Commission the previous month.
(g) Certification process.
(1)
Application review. Upon
completion of the new or expanded facility and the addition of the employees as
required by statute, the person who believes he falls within the exemption
shall apply for certification on forms provided by the Commission. Each
application for certification shall be reviewed by the Commission for the
purpose of determining that the total costs of construction for such facility
exceeded the sum of Five Million Dollars ($5,000,000.00) required by law.
During such time that the Commission is reviewing the application for
certification, the Commission will forward a copy of the application for
certification to the Employment Security Commission who will review employees
hired. Upon completion of the review by the Commission and the Employment
Securities Commission, the Tax Commission will notify the applicant of the
approval or denial of the certification requested.
(2)
Approval. The applicant
whose certification has been approved shall receive a refund in the amount not
to exceed the total amount of state and local sales taxes paid and previously
approved by the Commission. The applicant will also receive accrued interest
upon the principal amount of the refund made as provided for by statute.
[See: 68 O.S. §
1357.5(C)
]
(3)
Denial of
certification; protest procedure.
(A)
Any applicant whose request for certification is denied may, within sixty(60)
days after the mailing of the denial by the Commission, file with the
Commission a protest under oath, signed by the applicant or a duly authorized
agent setting out:
(i) a statement of denial
as determined by the Commission;
(ii) a statement of the applicant's
disagreement with such denial, and
(iii) supporting documentation relied on by
the taxpayer in support of certification.
(B) If an applicant fails to file a written
protest within the sixty (60) days, then the denial, without further action of
the Commission, shall become final and no appeal will be entertained.
(C) Applicants filing a protest to the denial
of certification by the Commission shall be scheduled for a hearing en banc
before the Commission for a date, time and place set by the Commission. Notice
of the date, time and place will be given by mail at least ten (10) days prior
to the hearing.
(D) The burden of
proving that the denial of certification was erroneous is on the applicant. The
applicant can present testimony, evidence and argument in support of the
requested certification.
(E) The
Commission will issue an order in each case. That order is directly appealable
to the Supreme Court. The appeal must be perfected within thirty (30) days of
the mailing of the order by filing a Petition in Error with the Clerk of the
Supreme Court of the State of Oklahoma and by filing a designation of the
record with the Secretary of the Commission at the same time the Petition in
Error is filed. [See: 68 O.S. §
225
]
(F)
Additional
information. For further information the applicant should refer to the
Rules of Practice and Procedure before the Office of the Administrative Law
Judges (710:1-5-21
through
710:1-5-49
). [See: 68 O.S. §§
1357.5,
1404.4
]
Amended at 11 Ok Reg 3521, eff 6-26-94; Amended at 12 Ok Reg 2635, eff 6-26-95; Amended at 13 Ok Reg 3139, eff 7-11-96; Amended at 24 Ok Reg 2397, eff 6-25-07; Amended at 25 Ok Reg 2070, eff 7-1-08
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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