Oklahoma Administrative Code › Title 710 - Oklahoma Tax Commission › Chapter 65 - Sales and Use Tax › Subchapter 7 - Duties and Liabilities › Section 710:65-7-13 - Vendors' responsibility - sales to contractors

Current through Vol. 41, No. 20, July 1, 2024
(a)
General rule.
Contractors
				are defined by statute as consumer/users and must pay sales tax on all taxable
				services and tangible personal property, including materials, supplies, and
				equipment purchased to develop, repair, alter, remodel, and improve real
				property.
(b)
Limited
				exceptions.
A contractor may make purchases based upon the exempt status
				of another entity only in the statutorily-limited circumstances described in
				this paragraph.
(1) A contractor who has a
				public contract, or a subcontractor to that public contract, with an Oklahoma
				municipality, county, public school district, city-county library system, an
				institution of the Oklahoma System of Higher Education, a rural water district,
				the Grand River Dam Authority, the Northeast Oklahoma Public Facilities
				Authority, the Oklahoma Municipal Power Authority, the City of Tulsa-Rogers
				County Port Authority, the Broken Bow Economic Development Authority, the
				Muskogee City-County Port Authority, the Oklahoma Ordnance Works Authority, the
				Durant Industrial Authority, the Ardmore Development Authority, the Oklahoma
				Department of Veterans Affairs, the Central Oklahoma Master Conservancy
				District, Arbuckle Master Conservancy District, Fort Cobb Master Conservancy
				District, Foss Reservoir Master Conservancy District, Mountain Park Master
				Conservancy District, Waurika Lake Master Conservancy District or the Office of
				Management and Enterprise Services only when carrying out a public construction
				contract on behalf of the Oklahoma Department of Veterans Affairs and effective
				July 1, 2022, the University Hospitals Trust may make purchases of tangible
				personal property or services, which are necessary for carrying out the public
				contract, exempt from sales tax.
(2) A contractor who has entered into a
				contract with a private institution of higher education or with a private
				elementary or secondary institution, may make purchases of tangible personal
				property or services, including materials, supplies and equipment used in the
				construction of buildings owned and used by the institution for educational
				purposes exempt from sales tax. However, the institution must be registered or
				accredited with the Oklahoma State Regents for Higher Education, the State
				Board of Education, or the State Department of Education.
(3) A contractor who has contracted with an
				agricultural permit holder to construct a facility which will be used directly
				in the production of any livestock, including facilities used in the production
				and storage of feed for livestock owned by the agricultural permit holder, may
				make purchases of materials, supplies and equipment necessary to fulfill the
				contract, exempt from sales tax. [
See:
OAC
710:65-7-11]
(4) A contractor may make
				purchases exempt from sales tax for use on campus construction projects for the
				benefit of institutions of the Oklahoma State System of Higher Education or
				private institutions of higher education accredited by the Oklahoma State
				Regents for Higher Education. The projects must be financed by or through the
				use of nonprofit entities which are exempt from taxation pursuant to Section
				501(c)(3) of the Internal Revenue Code. Contractors claiming exemption for
				purchases to be used in a qualified campus construction project should obtain a
				letter certifying the exemption status from the Tax Commission by following the
				procedures set out in
				710:65-13-210,
				and provide a copy of the letter to vendors, pursuant to subsection (g) of that
				rule. [
See:
68 O.S. §1356(41)]
(5) A contractor may make purchases of
				machinery, equipment, fuels, and chemicals or other materials, exempt from
				sales tax, which will be incorporated into and directly used or consumed in the
				process of treatment of hazardous waste, pursuant to
OAC
710:65-13-80.
				Contractors claiming exemption for purchases to be used to remediate hazardous
				wastes should obtain a letter certifying the exemption status from the Tax
				Commission by following the procedures set out in
				710:65-13-80,
				and provide a copy of the letter to vendors, pursuant to subsection (f) of that
				rule.
(6) A contractor, or a
				subcontractor to such contractor, with whom a church has duly entered into a
				construction contract may make purchases of tangible personal property or
				services exempt from sales tax which are necessary for carrying out such
				construction contract.
(7) A
				contractor, or a subcontractor to such contractor, may make purchases of
				tangible personal property which is to be
consumed or incorporated in
				the construction or expansion of a facility for a corporation organized under
				Section
				437 et
				seq. of Title 18 of the Oklahoma Statutes as a rural electric
				cooperative
exempt from sales tax. Contractors claiming exemption for
				purchases to be used in a qualified rural electric cooperative project shall
				follow the procedures set out in
OAC
710:65-13-124.
(8) A contractor, or a subcontractor to such
				contractor, may make purchases of tangible personal property or services
				pursuant to a contractual relationship with a child care center, qualified for
				exemption pursuant 68 O.S. § 1356(69), for construction and improvement of
				buildings and other structures owned by the child care center and operated for
				educational purposes exempt from sales tax.
(9) A contractor, or a subcontractor to such
				contractor, may make purchases of tangible personal property or services exempt
				from sales tax pursuant to a contractual relationship with a manufacturer for
				the construction and improvement of manufacturing goods, wares, merchandise,
				property, machinery and equipment for use in a manufacturing operation
				classified under NAICS No. 324110 (Petroleum Refineries).