Oklahoma Administrative Code › Title 260 - Office of Management and Enterprise Services › Chapter 135 - Service Oklahoma › Subchapter 7 - Motor Vehicle › Part 45 - VEHICLE SALES TAX AND MOTOR VEHICLE EXCISE TAX › Section 260:135-7-244 - Excise tax levy and exemptions

Current through Vol. 41, No. 20, July 1, 2024
(a)
General
				  levy on transfer of legal ownership.
Excise tax is levied on every
				  exchange of legal ownership on any vehicle registered or being registered in
				  Oklahoma unless a specific tax exemption applies.
(b)
Exemptions.
Following is
				  information on some of the more frequently encountered exempt situations:
(1)
Husband and wife; parent and
				  child.
Only transfers made without consideration between husband and
				  wife, parent and child, or vice versa, are exempt. A Family Affidavit (Form
				  794) must be included with the other supporting documentation and is to be
				  attached to the title documentation. This exemption does not apply to transfers
				  between in-laws or grandparents to grandchildren.
(2)
Out-of-state residence and
				  registration; nonresident military.
Any vehicle brought into Oklahoma by
				  a person formerly living in another state is exempt, if the person owned and
				  registered the vehicle in such other state of his residence at least sixty (60)
				  days prior to the time itis required to be registered in Oklahoma. Nonresident
				  members of the Armed Forces stationed in Oklahoma may register their vehicle
				  without excise tax if the vehicle has been registered by them in another state
				  (60 day limit does not apply).
(3)
Governmental entities.
Any vehicle is exempt if registered by the
				  State of Oklahoma or any political subdivision thereof. Additionally, vehicles
				  leased by a county, municipality, or a school district are exempt from the
				  excise tax.
(4)
Title by
				  inheritance.
Any vehicle on which legal ownership was obtained by
				  inheritance is exempt from the levy of the excise tax.
(5)
Certain transfers of corporations
				  and partnerships.
Legal ownership of vehicles obtained by transfer as
				  set out in Section
				  2105(9) of Title
				  68
may
also be exempt.
(6)
Rural water districts.
A
				  rural water district is exempt.
(7)
Rural electric cooperatives.
A rural electric coop is
				  exempt.
(8)
Federal reserve
				  banks.
Federal reserve banks are exempt.
(9)
Vehicles registered under
				  International Registration Plan.
Transfer of vehicles registered under
				  the International Registration Plan between lessor and lessee at the
				  termination of the lease are exempt from the excise tax.
(10)
Short term rentals by rental
				  companies.
Vehicles acquired by rental companies not to be rented for
				  terms of more than 90 days may be registered and titled by the rental agency
				  exempt from excise tax. An Oklahoma title branded "Rental Vehicle" will be
				  issued. If the vehicle is sold less than one (1) year from date of issuance of
				  the title, the rental agency must pay the excise tax that would have been due
				  on the vehicle, plus a 20% penalty before transferring the vehicle, unless the
				  vehicle is being transferred to the manufacturer or its financing company, to a
				  franchised dealer of the same line/make of the vehicle to be transferred, or to
				  anyone, if the vehicle is in a salvage condition (salvage or junk
				  title).
(11)
Foreclosure of
				  lien or mortgage; insurance contracts.
Any vehicle, the ownership of
				  which was obtained by the lienholder or mortgagee under or by foreclosure of a
				  lien or mortgage in the manner provided by law or to the insurer under
				  subrogated rights arising by reason of loss under an insurance contract, is
				  exempt from excise tax.
(12)
New vehicles registered by new car dealers.
A new vehicle
				  registered by a new vehicle dealer is exempt for a period of four (4)
				  months.
(13)
Insurance
				  companies.
An insurance company may obtain title to a vehicle on which
				  they paid a loss exempt from excise tax.
(14)
Revocable trusts.
Transfers
				  made without consideration between an individual and an express trust which
				  that individual or the spouse, child or parent of that individual has a right
				  to revoke are exempt.
(15)
Limited liability companies.
A limited liability company is a
				  combination of a corporate and a partnership business organization structure.
				  Excise tax exemption applies to the following transfers:
(A) Transfers to the limited liability
				  company if former owners are members of the limited liability company and the
				  interest in the company is in proportion to interest in the vehicle prior to
				  the transfer. A notarized bill of sale indicating such will be required as
				  supporting documentation.
(B)
				  Transfers of ownership from a limited liability company to members when a
				  dissolution is made. A notarized affidavit indicating such is
				  required.
(16)
Vehicle lease or lease-purchase agreements.
Transfers of ownership
				  of a vehicle acquired by a lessee are exempt from excise tax, provided the
				  vehicle excise tax was paid at the time of the initial lease or lease-purchase
				  agreement and an Oklahoma title was issued.
(17)
Fire protection districts.
Vehicles acquired by a fire protection district are exempt from the levy of
				  excise tax.
(18)
Exemption
				  for disabled veterans in receipt of compensation at the one hundred percent
				  rate.
Persons who have been honorably discharged from active service in
				  any branch of the Armed Forces of the United States or Oklahoma National Guard,
				  and who have been certified by the United States Department of Veterans
				  Affairs, or its successor, to be in receipt of compensation at the one hundred
				  percent (100%) rate for a permanent disability sustained through military
				  action or accident or resulting from a disease contracted while in such service
				  is exempt from vehicle excise tax for one (1) vehicle in a consecutive three
				  (3) year period, unless the vehicle is a replacement fora vehicle which was
				  destroyed and declared by the insurer to be a total loss claim.
(A) To prove eligibility a disabled veteran
				  must submit either an Oklahoma Tax Commission exemption card with the notation
				  "Sales Tax Exemption:100% Disabled Veteran" or a letter from the United States
				  Department of Veterans Affairs, its successor, or the Armed Forces of the
				  United States, certifying that the veteran is receiving disability compensation
				  at the 100% rate.
(B) In order to
				  qualify for the exemption, the vehicle must have been purchased on or after
				  July 1, 2005 and the name of the eligible disabled veteran must be included as
				  an owner on the vehicle title.
(C)
				  The consecutive three (3) year period computation is to be based upon the
				  actual purchase date of the vehicle(s), as reflected in the ownership
				  assignment date on the MSO or title certificate surrendered to the Commission
				  at time of title application. To qualify for this excise tax exemption, the
				  actual date of purchase of the vehicle must be more than three (3) years
				  removed from the date of purchase of the prior vehicle to which the exemption
				  was most recently applied.
(D) To
				  qualify for an excise tax waiver under the total loss claim exception to the
				  three (3) year restriction, documentation confirming the insurer's total loss
				  claim declaration must be presented for review and approval by the Tax
				  Commission.
(19)
Exemption for repossessed vehicle transferred back to former
				  owner.
Ownership of a vehicle transferred by the repossessor back to the
				  former Oklahoma title record owner(s) within thirty (30) days of issuance of
				  the repossession title.
(A) Ownership must be
				  identical to that reflected in the Oklahoma title record immediately prior to
				  issuance of the repossession title. Ownership (as assigned by the repossessor)
				  may reflect an additional name without the assessment of excise tax only if an
				  exemption exists between the owners. Otherwise, any change in ownership will
				  result in the assessment of excise tax.
(B) Title assignment to the former owner(s)
				  must be completed within thirty (30) days of issuance of the repossession
				  title.