Oklahoma Administrative Code
Title 710 - Oklahoma Tax Commission
Chapter 65 - Sales and Use Tax
Subchapter 19 - Specific Applications and Examples
Part 5 - "C"
Section 710:65-19-62 - Crates and crating companies

(a) Crates sold to end users are subject to sales tax. The entity who builds the crate for their customer should charge the appropriate tax on their sale of the crate to their customer. Crates created by a crating company, and used by the crating company to pack their customer's goods, are considered to have been sold to the customer, and the first use of the crates is at the time the crating company packs the crates with the customer's goods.

(b) Crating companies are not usually considered to be manufacturers. Generally, crating companies create crates to order, and in most instances package their customer's goods within the crates. The crating company should secure from the Tax Commission, a sales tax permit, and use this permit to purchase exempt from sales tax those items which become a part of the crates.

(c) Those crating companies which produce standard crates, and who operate in a manner consistent with other businesses who produce packaging material (such as cardboard boxes), are manufacturers of crates. Manufacturers of packaging material do not normally package their customer's goods. A manufacturer of crates should secure from the Tax Commission, a Manufacturer's Sales/Exemption Permit, which should be used by the crating company to purchase, exempt from Sales Tax, those items which become a part of the crate.

(d) Crates may be sold exempt from Sales Tax if the crate is transported outside of Oklahoma before being used to package goods. If the crate is used to package goods within Oklahoma, the sale of the crate is subject to Sales Tax, except as follows.

(e) Crates sold to a manufacturer of goods for use in packing, shipping or delivering tangible personal property for sale, may be sold exempt from sales tax if a valid claim of exemption is made by the manufacturer of goods. This exemption will not apply to crates which are not destroyed during product removal except crates specifically noted under 68 O.S., Section 1359(D) or (E). In addition, crates may be sold exempt from Sales Tax if the purchaser of the crates holds a Sales Tax Permit, is regularly engaged in the business of selling crates, and makes a valid claim for exemption on the basis of resale. (Note: Crates which are not destroyed during product removal, and which are purchased by a manufacturer of goods, may be sold exempt from Sales Tax if the purchaser holds a Sales Tax Permit, and claims a valid resale exemption. The manufacturer, purchaser, is required to charge his customer Sales Tax.)