Oklahoma Administrative Code › Title 710 - Oklahoma Tax Commission › Chapter 65 - Sales and Use Tax › Subchapter 13 - Sales and Use Tax Exemptions › Part 33 - MOTOR FUELS › Section 710:65-13-180 - Motor fuel and other petroleum products; taxable and exempt transactions

Current through Vol. 41, No. 20, July 1, 2024
(a)
Exempt sales in general.
The sales tax will not be applicable to
				  the gross receipts derived from the sale of gasoline, gasohol, or other motor
				  fuel on which the Oklahoma motor fuel excise tax, gasoline excise tax, or
				  special fuels tax has been paid.
(b)
Diesel fuel exemption.
Diesel fuel users whose purchases of diesel fuel in bulk quantities are
				  primarily for delivery by them into the fuel supply tanks of motor vehicles in
				  Oklahoma, must apply for a Sales Tax Permit issued by the Oklahoma Tax
				  Commission and assume direct liability for the payment of state and local taxes
				  upon all withdrawals from bulk storage of fuel not used
"on-the-road"
and therefore not subject to motor fuel or gasoline
				  excise taxes.
(c)
Limitations
				  on motor fuels exemption.
Sales of motor fuels which are exempt from the
				  motor fuel tax, such as specially prepared naphtha used in established places
				  of business for cleaning and dyeing purposes, and kerosene and any other motor
				  fuel that is used for illuminating or heating purposes are subject to sales
				  tax.
(d)
Aircraft
				  fuels.
The gross receipts from the sales of all chemicals and petroleum
				  products used as fuel to generate power in aircraft engines are exempt from all
				  state and local sales and use taxes because such sales are subject to the levy
				  of motor fuel excise tax.
(e)
Diesel fuel sold for use by commercial watercraft.
Sales of diesel
				  fuel sold for consumption by commercial vessels, barges, and other commercial
				  watercraft are exempt from all state and local sales and use taxes.
				  [
See:
68 O.S. §
										1357(24)
				  ]
(f)
Crude and other oil and
				  gas well exemptions.
Goods produced in Oklahoma that are subject to the
				  gross production tax provisions at 68 O.S. §§
										1001
				  et seq. are exempt from sales and use taxes when produced. However, sales of
				  such products which would normally be exempt under 68 O.S. §
										1355(3)
				  are taxable when made to a taxable consumer/user, except for sales of crude
				  petroleum, diesel, or natural or casing head gas, that are sold solely for the
				  purpose of facilitating the production of oil or gas by injection into the
				  earth.
(g)
Limitations on
				  crude petroleum and other oil and gas well products exemption.
The
				  exemption for crude petroleum and other oil and gas well products shall not
				  include the application of a lubricant or cleaning agent, i.e. kerosene, to the
				  oil and gas well production machinery. Nor shall it apply to fuel used for
				  producing power for equipment used to drill or produce from an oil or gas well
				  or to sales of petroleum-based chemicals, additives, or other substances used
				  in the drilling of or production from a well. Even though these uses may
				  indirectly facilitate production, they do not come within the purview of the
				  exemption which is limited to crude petroleum, diesel fuel, natural or
				  casinghead gas that is injected into the earth primarily and directly for the
				  purpose of facilitating or promoting the production of oil or gas.
				  [
See:
68 O.S. §
										1355
				  ]
Amended at 15 Ok Reg
					 2827, eff 6-25-98; Amended at 17 Ok Reg 2677, eff 6-25-00; Amended at 25 Ok Reg
					 2070, eff 7-1-08