Current through Vol. 42, No. 1, September 16, 2024
(a)
Definitions. The following words and terms, when used in this
Part, shall have the following meaning unless the context indicates otherwise:
(1)
"Broadband" means those
services and underlying facilities that provide access to and from the Internet
of continuous speeds of at least twenty-five (25) megabits per second (Mbps)
downstream, from the provider to the customer, and continuous speeds of at
least three (3) megabits per second (Mbps) upstream, from the customer to the
provider, using fixed, terrestrial facilities, including, but not limited to,
wireless, copper wire, fiber-optic cable, or coaxial cable, to provide such
service. The minimum Internet speeds listed in this paragraph shall be subject
to change or update when, or if, the Federal Communications Commission makes
new rulings related to its definition of broadband. [17 O.S. §
139.102(4)]
(2)
"Underserved" means an area or region that has Internet service at
speeds higher than those that meet the definition of an unserved area, but
lower than those service speeds of high-speed Internet. [17 O.S. §
139.102(48)]
(3)
"Unserved" means an area or region in which there is not at least
one provider of terrestrial broadband service that is either:
(A) Offering a connection to the Internet,
or
(B) Required, under the terms of
the Federal Universal Service Fund or other federal or state grant, to provide
a connection to the Internet. [See: 17 O.S. § 139.102]
(b)
General
provisions. The sale, lease, rental, storage, use or other consumption
of qualifying broadband equipment by providers of Internet service or
subsidiaries if the property is directly used or consumed by the provider or
subsidiary in or during the distribution of broadband Internet service is
exempt from state and local sales and use taxes.
(c)
Exemption exceptions.
Equipment purchased for the following functions, operations and other uses do
not qualify for exemption:
(1) Supporting or
ancillary functions, such as office operations, field operations, marketing,
transportation, warehousing, data storage, or similar operations that do not
directly result in the distribution of broadband Internet service do not
qualify for exemption.
(2) Property
directly used or consumed in or during the provision, creation, or production
of a data processing service or information service, or property the provider
grants, sells, or leases to the customer for use within the home or
establishment receiving broadband.
(3) The following is a nonexclusive list of
items that do not qualify for the exemption:
(A) Boxes, ducts, enclosures, frames,
housing, shelter, vaults, conduit/pipes that hold wires, cables, and
equipment
(B) Cable lashing
wires
(C) Clamps
(D) Faceplates
(E) Guy wires
(F) Grounding equipment
(G) Mounting brackets,
(H) Nuts, bolts and other types of
connectors
(I) Pedestals
(J) Racks
(K) Splice trays
(L) Tools
(M) Towers, poles
(N) Testing equipment
(O) Monitoring equipment
(P) Data storage
(Q) Cell phones
(R) Laptops/tablets
(S) Fiber splicing and repair
(d)
Administration. Pursuant to statute, the exemption for sales of
qualifying broadband equipment will be administered as a rebate of the state
and local sales or use taxes paid by the providers of Internet services or
subsidiaries thereof to the vendor or accrued and self-remitted to the State of
Oklahoma.
(e)
Purchases
qualifying for exemption. No claim for a rebate shall be approved unless
the following conditions are met:
(1) The
equipment was purchased in order to establish or expand broadband services in
underserved or unserved areas; and
(2) Claimant establishes that as a result of
the equipment purchase there has been net growth in the number of potential
customers served in underserved or unserved areas.
(f)
Claim deadlines. Rebate
claims for the outlined periods are governed by the following deadlines:
(1)
FY 23 rebate claims. To
qualify for rebate payments for FY 23, equipment or other items qualifying for
the exemption must be purchased and placed in service between January 1, 2022,
and December 31, 2023. To receive a rebate of sales/use tax paid on purchases
of qualifying broadband equipment placed in service in calendar year 2022, a
claim for rebate must be filed with the Tax Commission no later than September
1, 2023. Rebate claims for sales/use tax paid for qualifying equipment
purchased in calendar year 2023 must be filed with the Tax Commission not later
than September 1, 2024. All claims attributable to calendar years 2022 and 2023
are to be processed by the Tax Commission not later than March 1,
2025.
(2)
FY 24 rebate
claims. To qualify for rebate payments for FY 24, equipment or other
items qualifying for the exemption must be purchased and placed in service
between January 1, 2024, and December 31, 2025. To receive a rebate of
sales/use tax paid on purchases of qualifying broadband equipment placed in
service in calendar year 2024, a rebate claim must be filed with the Tax
Commission no later than September 1, 2025. Rebate claims for sales/use tax
paid for qualifying equipment purchased in calendar year 2025 must be filed
with the Tax Commission not later than September 1, 2026. All claims are to be
processed by the Tax Commission not later than March 1, 2027.
(g)
Rebate cap. For
the fiscal year beginning July 1, 2023, and all subsequent fiscal years, the
total amount of rebate is capped at $42,000,000 with $31,500,000 of the total
reserved for eligible projects serving counties having a population density of
fewer than one hundred (100) persons per square mile and $10,500,000 of the
total reserved for eligible projects serving counties having a population
density of one hundred (100) or more persons per square mile.
(h)
Distribution of rebate
dollars. The amount of rebate paid to each claimant shall be computed by
dividing the applicable total rebate pool amount by the dollar amount of claims
timely received by the Tax Commission with respect to each fiscal year, and
paying in full the amount of the claims submitted if the amount of claims are
equal to, or less than, the total rebate pool, or a pro rata share if the total
amount of claims submitted exceed the rebate pool. Qualifying claim amounts
which are not paid will not rollover to the next claim period.
(i)
Application process. The
sales/use tax rebate claims with supporting documentation are to be mailed to
Credits and Refunds Section, Business Tax Services Division, Oklahoma Tax
Commission, Oklahoma City, OK 73194. Rebate claims must include the following
information:
(1) The name, address, and
telephone number of the contact person along with the name, address, telephone
number and at least the last four digits of the purchaser's identification
number.
(2) A written detailed
explanation of why the rebate is due.
(3) Copies of the original invoices included
in the rebate request, in chronological order, from the oldest to the most
current. If the number of invoices exceeds twenty-five (25), the invoices must
be accompanied by an electronic spreadsheet of the invoices associated with the
rebate claim that relates back to the tax amount requested on the application
for credit. The required fields should accurately list the vendor name, invoice
date, invoice number, description of the items, the taxable amount, the
sales/use tax requested, period the tax was remitted, permit number the tax was
remitted under, and the jurisdiction(s) for which the tax was paid.
(4) Additional documents which support the
rebate claim, including proof that equipment purchases established or expanded
broadband services in underserved or unserved areas and resulted in a net
growth in the number of potential customers served in the covered
areas.
(5) If the amount of the
request exceeds $10,000, the purchaser must also provide the following:
(A) A statement from each vendor to whom the
purchaser paid the tax setting forth each invoice included in the
claim;
(B) The amount of state,
city and/or county tax collected from the purchaser and reported by the vendor
and the local jurisdiction(s) for which the tax was paid; and
(C) The date on which the tax was remitted to
the Tax Commission.
(6)
Further, the claim must differentiate between project property serving counties
with a population density of fewer than one hundred (100) persons per square
mile and those with a population density of one hundred (100) or more persons
per square mile.
