Current through Vol. 42, No. 1, September 16, 2024
(a)
Definitions. The following words and terms, when used in this
Section shall have the following meaning, unless the context clearly indicates
otherwise:
(1)
"Computer" means
an electronic device that accepts information in digital or similar
form and manipulates it for a result based on a sequence of
instructions. [68 O.S. §
1352
]
(2)
"Data processing
equipment" means machines which perform work using programmed
instruction, and which singly or collectively have capabilities of memory,
logic, arithmetic or communication and all machines used in support of machines
possessing those capabilities.
(3)
"Equipment" , for purposes of this Section, means any independent
device or tool, separate from any machinery, but essential to use of the
machinery, or any sub-unit or sub-assembly comprising a component of any
machinery or auxiliary, adjunct, or attachment, to parts of machinery.
"Equipment" also specifically includes "computers"
and "Data processing equipment" , as defined in this
Section.
(4)
"Machinery" , for purposes of this Section, means major
mechanical, electrical, or electronic machines or major components of such
machines.
(5)
"Qualified
purchaser" means an establishment primarily engaged in computer services
and data processing:
(A) Which is defined
under Industrial Group Numbers 7372 (prepackaged software) and 7373 (computer
integrated system design) of the Standard Industrial Classification (SIC)
Manual, latest version, and which derives at least fifty percent (50%) of its
annual gross revenues from the sale of a product or service to an out-of-state
buyer or consumer, or
(B) Which is
defined under Industrial Group Number 7374 (computer processing and data
preparation processing services) of the SIC Manual, latest version, which
derives at least eighty percent (80%) of their annual gross revenues from the
sale of a product or service to an out-of-state buyer or consumer.
(6)
"Related
peripheral" means input, output, processing, storage, software, and
communication facilities which are connected or related to a device in a system
or network.
(b)
General provisions. The sale of machinery and equipment, including
computers, data processing equipment, and related peripherals, to a qualified
purchaser primarily engaged in computer services and data processing as defined
by (a) of this Section is specifically exempt from the levy of sales or use
tax. For purposes of determining "qualified purchaser" status, all sales to the
federal government shall be considered sales to an out-of-state buyer or
consumer.
(c)
Examples of
exempt items. Exempt items include, but are not limited to:
(1) Bar code reader
(2) Card reader/punch
(3) Computer
(4) CRT
(5) Disk drive
(6) Fixed Disk
(7) Key punch
(8) Memory
(9) Modem
(10) Monitor
(11) Plotter
(12) Printer
(13) Removable disk
(14) Software
(15) Tape drive
(16) Telegraph equipment
(17) Telegraph service
(18) Telephone equipment
(19) Telephone service
(20) Terminal
(21) Video display terminal
(d)
Examples of non-exempt
items. The exemption shall not apply to:
(1) Cleaning products
(2) Paper
(3) Pens
(4) Print-out labels
(e)
Application. Application for
exemption may be made by filing a signed, sworn affidavit with the Commission,
stating:
(1) The name, address, and federal
employer's identification number of the applicant and the name and title of the
person signing for the applicant;
(2) A complete description of the computer
services and data processing that will take place within the
establishment;
(3) A statement of
the establishment's annual gross revenues, and the percentage of the annual
gross revenues derived from sales made to out-of-state buyers and consumers,
determined for the most recently completed income tax year;
(4) A statement that the applicant is
primarily engaged in the activities appropriate to SIC Code classification
number 7372, 7373 or 7374, as applicable;
(5) The signature of a person authorized to
bind the applicant, signed under penalty of perjury before a notary;
and
(6) Such additional information
as the Commission may require to confirm eligibility.
(f)
Review and determination.
Upon receipt of the application, the Commission will review and make a
determination as to the applicant's eligibility. Upon approval, a letter
certifying the exemption allowed the establishment will be forwarded to the
applicant.
(g)
Issuance,
scope, limitations of direct payment permit. The letter of certification
issued by the Commission will become effective, commencing July 1st following
the ending date of the income tax year on which the statement required by
subsection (e) was calculated, for a period of twelve (12) months, and may be
renewed, subject to annual review and recertification of the applicant's
eligibility by the Commission.
(h)
Denial of certification; cancellation, suspension, revocation of
certification. Certification may be denied, cancelled, suspended, or
revoked by the Commission for non-compliance with the provisions of this
Section, with applicable Oklahoma tax statutes, or for other good cause shown.
Proceedings related to the cancellation or refusal to issue a certification
pursuant to this Section shall be governed by
710:1-5-100
and
710:1-5-21
through
710:1-5-49
of the permanent rules of the Commission.
Added at 14 Ok Reg
2711, eff 6-26-97; Amended at 21 Ok Reg 2581, eff 6-25-04; Amended at 25 Ok Reg
2070, eff 7-1-08
