The following words and terms, when used in this Chapter,
shall have the following meaning, unless the context clearly indicates
otherwise:
"Business" means any activity with the potential
to generate a profit even if the business actually operates at a loss. This
category also includes non-profit, religious and other organizations and
persons who are otherwise exempt when they are conducting activities for a
profit in competition with other businesses.
"Bundled Transaction" means the retail sale of
two or more products, except real property and services to real property, where
the products are otherwise distinct and identifiable, and the products are sold
for one nonitemized price. A "bundled transaction" does not
include the sale of any products in which the sales price varies, or is
negotiable, based on the selection by the purchaser of the products included in
the transaction. As used in this paragraph:
(A) "distinct and identifiable products" does
not include:
(i) packaging such as containers, boxes, sacks, bags, and
bottles, or other materials such as wrapping, labels, tags, and instruction
guides, that accompany the retail sale of the products and are incidental or
immaterial to the retail sale thereof, including but not limited to, grocery
sacks, shoeboxes, dry cleaning garment bags and express delivery envelopes and
boxes;
(ii) a product provided free of charge with the required
purchase of another product. A product is provided free of charge if the sales
price of the product purchased does not vary depending on the inclusion of the
product provided free of charge, or
(iii) items included in the definition of gross receipts or
sales price, pursuant to this Section.
(B) "one nonitemized price" does not include a
price that is separately identified by product on binding sales or other
supporting sales-related documentation made available to the customer in paper
or electronic form including, but not limited to an invoice, bill of sale,
receipt, contract, service agreement, lease agreement, periodic notice of rates
and services, rate card, or price list.
(C) A transaction that otherwise meets the definition of a
bundled transaction shall not be considered a
bundled
transaction if it is:
(i) the retail sale of tangible personal property and a
service where the tangible personal property is essential to the use of the
service, and is provided exclusively in connection with the service, and the
true object of the transaction is the service;
(ii) the retail sale of services where one service is
provided that is essential to the use or receipt of a second service and the
first service is provided exclusively in connection with the second service and
the true object of the transaction is the second service;
(iii) a transaction that includes taxable products and
nontaxable products and the purchase price or sales price of the taxable
products is de minimis. For purposes of this Section, "de minimis" means the
seller's purchase price or sales price of taxable products is ten percent (10%)
or less of the total purchase price or sales price of the bundled products.
Sellers shall use either the purchase price or the sales price of the products
to determine if the taxable products are de minimis. Sellers may not use a
combination of the purchase price and sales price of the products to determine
if the taxable products are de minimis. Sellers shall use the full term of a
service contract to determine if the taxable products are de minimis; or
(iv) the retail sale of exempt tangible personal property and
taxable tangible personal property where:
(I) the transaction includes food and food ingredients,
drugs, durable medical equipment, mobility enhancing equipment,
over-the-counter drugs, prosthetic devices or medical supplies, and
(II) the seller's purchase price or sales price of the
taxable tangible personal property is fifty percent (50%) or less of the total
purchase price or sales price of the bundled tangible personal property.
Sellers may not use a combination of the purchase price and sales price of the
tangible personal property when making the fifty percent (50%) determination
for a transaction.
"Consumer" or "user" means a person
to whom a taxable sale of tangible personal property is made or for whom a
taxable service is performed.
"Consideration" means and includes, but is not
limited to:
(A) The price arrived at between purchaser and vendor.
(B) Any additional bona fide charges added to or included in
such price for preparation, fabrication, alteration, modification, finishing,
completion, delivery, or other services performed in respect to or labor
charges for work done with respect to such property prior to transfer.
(C) No deduction from gross receipts is permitted for
services performed or work done on behalf of the vendor prior to transfer of
such tangible personal property. [See: 68 O.S. § 1352(12)]
"Delivery charges" means charges by the seller
of personal property or services for preparation and delivery to a location
designated by the purchaser of personal property or services including, but not
limited to, transportation, shipping, postage, handling, crating, and packing.
"Delivery charges" does not include charges for the delivery of
"direct mail" if the charges are separately-stated on an invoice
or similar billing document given to the purchaser.
"Gross receipts", "gross
proceeds",
or "sales price" means
the total amount of consideration including cash, credit, property, and
services, for which personal property or services are sold, leased, or rented;
valued in money, whether received in money or otherwise, without any deduction
for the following:
(A) The seller's cost of the property
sold;
(B) The cost of materials used, labor, or service
cost;
(C) Interest, losses, all costs of transportation to
the seller, all taxes imposed on the seller, and any other expense of the
seller;
(D) Charges by the seller for any services necessary
to complete the sale, other than delivery and installation
charges;
(E)
Delivery charges and installation charges, unless
separately stated on the invoice, billing, or similar document given to the
purchaser; or,
(F)
Credit for any trade-in.
"Gross receipts", "gross proceeds",
or "sales price" shall not include:
(A) Discounts, including cash, term, or coupons that
are not reimbursed by a third party that are allowed by a seller and taken by a
purchaser on a sale;
(B) Interest, financing, and carrying charges from
credit extended on the sale of personal property or services, if the amount is
separately stated on the invoice, bill of sale, or similar document given to
the purchaser; or
(C) Any taxes legally imposed directly on the
consumer that are separately stated on the invoice, bill of sale, or similar
document given to the purchaser. [68 O.S.§ 1352(12)]
"Gross receipts", "gross
proceeds",
or "sales price" shall
include consideration received by the seller from third parties if:
(A) The seller actually receives consideration from a
party other than the purchaser and the consideration is directly related to a
price reduction or discount on the sale;
(B) The seller has an obligation to pass the price
reduction or discount through to the purchaser;
(C) The amount of the consideration attributable to
the sale is fixed and determinable by the seller at the time of the sale of the
item to the
purchaser
; and
(D) One of the following criteria is met:
(i) The purchaser presents a coupon, certificate or
other documentation to the seller to claim a price reduction or discount where
the coupon, certificate or documentation is authorized, distributed or granted
by a third party with the understanding that the third party will reimburse any
seller to whom the coupon, certificate or documentation is
presented;
(ii) The purchaser identifies himself or herself to
the seller as a member of a group or organization entitled to a price reduction
or discount; provided, a "preferred customer" card that is available to any
patron does not constitute membership in such a group; or
(iii) The price reduction or discount is identified
as a third-party price reduction or discount on the invoice received by the
purchaser or on a coupon, certificate or other documentation presented by the
purchaser.
"Lease or rental" means any transfer of
possession or control of tangible personal property for a fixed or
indeterminate term for consideration. A lease or rental may include future
options to purchase or extend.
(A) "Lease or rental" does not include:
(i) A transfer of possession or control of property under a
security agreement or deferred payment plan that requires the transfer of title
upon completion of the required payments;
(ii) A transfer of possession or control of property under an
agreement that requires the transfer of title upon completion of required
payments and payment of an option price does not exceed the greater of One
Hundred Dollars or one (1) percent of the total required payments; or
(iii) Providing tangible personal property along with an
operator for a fixed or indeterminate period of time. A condition of this
exclusion is that the operator is necessary for the equipment to perform as
designed. For the purpose of this unit, an operator must do more than maintain,
inspect, or set-up the tangible personal property.
(B) "Lease or rental" does include agreements
covering motor vehicles and trailers where the amount of consideration may be
increased or decreased by reference to the amount realized upon sale or
disposition of the property as defined by
26
U.S.C. §
7701(h)(1).
(C) This definition shall be used for sales and use tax
purposes if a transaction is characterized as a lease or rental under generally
accepted accounting principles, the Internal Revenue Code, the Oklahoma Uniform
Commercial Code (12A O.S. § 1-101 et seq.), or other provisions of federal,
state, or local law.
"Retail sale" means any sale, lease, or rental
for any purpose other than for resale, sublease, or subrent.
"Sale" means the transfer of either
title or possession of tangible personal property for a valuable consideration
regardless of the manner, method, instrumentality, or device by which the
transfer is accomplished in this state. All consideration received for
the sale is included in gross receipts subject to tax.
(A) "Sale" does include but is not limited to:
(i) The exchange, barter, lease, or rental of
tangible personal property resulting in the transfer of the title to or
possession of the property;
(ii) The disposition for consumption or use in any
business or by any person of all goods, wares, merchandise, or property which
has been purchased for resale, manufacturing, or further
processing;
(iii) The sale, gift, exchange, or other disposition
of admission, dues, or fees to clubs, places of amusement or recreational or
athletic events or for the privilege of having access to or the use of
amusement, recreational, athletic or entertainment facilities;
(iv) The furnishing or rendering of services taxable
under the Oklahoma Sales Tax Code; and
(v) Any use of motor fuel or diesel fuel by a
supplier, as defined in Section 500.3 of this title, upon which sales tax has
not previously been paid, for purposes other than to propel motor vehicles over
the public highways of this state. Motor fuel or diesel fuel purchased outside
the state and used for purposes other than to propel motor vehicles over the
public highways of this state shall not constitute a sale within the meaning of
this paragraph.
(B) "Sale" does not include sale and leaseback.
"Sales tax" means all applicable state, city and
county sales tax.
"Sales value" means:
(A) In the case of a manufacturer, the sum of the
manufacturer's cost of raw materials and the proportionate share of both the
cost of machinery and equipment used and the cost of items consumed in the
direct process of the manufacturing of the product, all of which were purchased
exempt from sales tax for use in the process of manufacturing; or
(B) In the case of a person holding a mixed beverage tax
permit or other permit issued in accordance with 37A O.S. § 5-107, the total
retail sales price for sales of alcoholic beverages only, calculated pursuant
to OAC
710:20-5-4; or
(C) In the case of sales of prepared food, the sales value of
a free, reduced price, or complimentary meal is presumed to be the greater of
the consideration received for the meal, if any, or the cost paid by the vendor
of the food for the food items included in the free, reduced price, or
complimentary meal; or
(D) In the case where an inventory of goods, originally
purchased exempt for resale, is being held for rental or leasing purposes, the
regular rental charges which would be charged to the vendor's best customer, if
the goods are to be returned to inventory. Where the goods are not to be
returned to inventory held for rental or leasing purposes, the lesser of the
original purchase price of the goods, or the current market price will be
presumed to be the sales value; or
(E) Otherwise, "sales value" means the larger of
either the vendor's cost at the time the exempt purchase of goods was made, or
the price at which it would be sold to the vendor's best customer in the
ordinary course of business.
"Tangible personal property" means
personal property that can be seen, weighed, measured, felt, or touched
or that is in any other manner perceptible to the senses. For purposes
of the Oklahoma Sales Tax Code, "tangible personal
property"includes electricity, water, gas, steam and
prewritten computer software. [68 O.S.§ 1352(24)] The term does not
include real property, such as land and buildings, tangible personal property
that loses its identity when it becomes an integral and inseparable part of the
realty, or tangible personal property which is removable only with substantial
damage to the premises. Property severed from real estate becomes tangible
personal property. "Tangible personal property" does not include
intangible personal property constituting mere rights of action and having no
intrinsic value, such as contracts, deeds, mortgages, stocks, bonds,
certificates of deposit, or uncancelled United States postage or revenue stamps
sold for postage or revenue purposes. [See: 68 O.S. § 1352; 68
O.S. § 1354; See Also: 60 O.S. §§ 7, 8]
"Tax" means all state, applicable city and
applicable county tax.
"Use tax" means all applicable state and city
use tax.
"User" or "consumer" means a person
to whom a taxable sale of tangible personal property is made or for whom a
taxable service is performed.
