Bill Text For SB0593 - Engrossed

 1|ENGROSSED SENATE                                                       |
  |BILL NO. 593                         By: Thompson of the Senate        |
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  |                                         and                           |
 3|                                                                       |
  |                                         Echols of the House           |
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 5|                                                                       |
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 6|       An Act relating to sales and use tax; amending 68               |
  |       O.S. 2011, Sections 1355 and 1361, as last amended by           |
 7|       Sections 1 and 3, Chapter 356, O.S.L. 2017 (68 O.S.             |
  |       Supp. 2020, Sections 1355 and 1361), which relate to            |
 8|       the Streamlined Sales and Use Tax Administration Act;           |
  |       modifying exemption on sales of motor vehicles and              |
 9|       certain accessories; removing certain manner and                |
  |       responsibility for sales tax payment; amending 68               |
10|       O.S. 2011, Sections 1402 and 1404, as amended by                |
  |       Sections 4 and 5, Chapter 356, O.S.L. 2017 (68 O.S.             |
11|       Supp. 2020, Sections 1402 and 1404), which relate to            |
  |       the Use Tax Code; removing certain manner and                   |
12|       responsibility for use tax payment; modifying                   |
  |       exemption on use tax of motor vehicles and certain              |
13|       accessories; amending 68 O.S. 2011, Section 2106, as            |
  |       amended by Section 2, Chapter 356, O.S.L. 2017 (68              |
14|       O.S. Supp. 2020, Section 2106), which relates to                |
  |       excise tax on vehicles; removing exception for                  |
15|       certain excise tax levied in lieu of all other taxes;           |
  |       providing an effective date; and declaring an                   |
16|       emergency.                                                      |
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17|                                                                       |
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18|BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:                  |
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19|    SECTION 1.     AMENDATORY     68 O.S. 2011, Section 1355, as       |
  |                                                                       |
20|last amended by Section 1, Chapter 356, O.S.L. 2017 (68 O.S. Supp.     |
  |                                                                       |
21|2020, Section 1355), is amended to read as follows:                    |
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22|    Section 1355.  There are hereby specifically exempted from the     |
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23|tax levied pursuant to the provisions of Section 1350 et seq. of       |
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24|this title:                                                            |
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arsid682564 (Floor Amendments Only)                                Page 1
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 1|    1.  Sale of gasoline, motor fuel, methanol, "M-85" which is a      |
  |                                                                       |
 2|mixture of methanol and gasoline containing at least eighty-five       |
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 3|percent (85%) methanol, compressed natural gas, liquefied natural      |
  |                                                                       |
 4|gas, or liquefied petroleum gas on which the Motor Fuel Tax,           |
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 5|Gasoline Excise Tax, Special Fuels Tax or the fee in lieu of Special   |
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 6|Fuels Tax levied in Section 500.1 et seq., Section 601 et seq. or      |
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 7|Section 701 et seq. of this title has been, or will be paid;           |
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 8|    2.  For the sale Sale of motor vehicles or any optional            |
  |                                                                       |
 9|equipment or accessories attached to motor vehicles on which the       |
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10|Oklahoma Motor Vehicle Excise Tax levied in Section 2101 et seq. of    |
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11|this title has been, or will be paid, all but a portion of the levy    |
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12|provided under Section 1354 of this title, equal to one and            |
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13|twenty-five-hundredths percent (1.25%) of the gross receipts of such   |
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14|sales.  Provided, the sale of motor vehicles shall not be subject to   |
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15|any sales and use taxes levied by cities, counties or other            |
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16|jurisdictions of the state;                                            |
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17|    3.  Sale of crude petroleum or natural or casinghead gas and       |
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18|other products subject to gross production tax pursuant to the         |
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19|provisions of Section 1001 et seq. and Section 1101 et seq. of this    |
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20|title.  This exemption shall not apply when such products are sold     |
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21|to a consumer or user for consumption or use, except when used for     |
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22|injection into the earth for the purpose of promoting or               |
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23|facilitating the production of oil or gas.  This paragraph shall not   |
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24|                                                                       |
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arsid682564 (Floor Amendments Only)                                Page 2
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 1|operate to increase or repeal the gross production tax levied by the   |
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 2|laws of this state;                                                    |
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 3|    4.  Sale of aircraft on which the tax levied pursuant to the       |
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 4|provisions of Sections 6001 through 6007 of this title has been, or    |
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 5|will be paid or which are specifically exempt from such tax pursuant   |
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 6|to the provisions of Section 6003 of this title;                       |
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 7|    5.  Sales from coin-operated devices on which the fee imposed by   |
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 8|Sections 1501 through 1512 of this title has been paid;                |
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 9|    6.  Leases of twelve (12) months or more of motor vehicles in      |
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10|which the owners of the vehicles have paid the vehicle excise tax      |
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11|levied by Section 2103 of this title;                                  |
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12|    7.  Sales of charity game equipment on which a tax is levied       |
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13|pursuant to the Oklahoma Charity Games Act, Section 401 et seq. of     |
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14|Title 3A of the Oklahoma Statutes, or which is sold to an              |
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15|organization that is:                                                  |
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16|         a.    a veterans' organization exempt from taxation           |
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17|              pursuant to the provisions of paragraph (4), (7), (8),   |
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18|              (10) or (19) of subsection (c) of Section 501 of the     |
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19|              United States Internal Revenue Code of 1986, as          |
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20|              amended, 26 U.S.C., Section 501(c) et seq.,              |
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21|         b.    a group home for mentally disabled individuals exempt   |
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22|              from taxation pursuant to the provisions of paragraph    |
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23|              (3) of subsection (c) of Section 501 of the United       |
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24|                                                                       |
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arsid682564 (Floor Amendments Only)                                Page 3
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 1|              States Internal Revenue Code of 1986, as amended, 26     |
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 2|              U.S.C., Section 501(c) et seq., or                       |
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 3|         c.    a charitable healthcare organization which is exempt    |
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 4|              from taxation pursuant to the provisions of paragraph    |
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 5|              (3) of subsection (c) of Section 501 of the United       |
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 6|              States Internal Revenue Code of 1986, as amended, 26     |
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 7|              U.S.C., Section 501(c) et seq.;                          |
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 8|    8.  Sales of cigarettes or tobacco products to:                    |
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 9|         a.   a federally recognized Indian tribe or nation which      |
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10|              has entered into a compact with the State of Oklahoma    |
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11|              pursuant to the provisions of subsection C of Section    |
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12|              346 of this title or to a licensee of such a tribe or    |
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13|              nation, upon which the payment in lieu of taxes          |
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14|              required by the compact has been paid, or                |
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15|         b.   a federally recognized Indian tribe or nation or to a    |
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16|              licensee of such a tribe or nation upon which the tax    |
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17|              levied pursuant to the provisions of Section 349.1 or    |
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18|              Section 426 of this title has been paid;                 |
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19|    9.  Leases of aircraft upon which the owners have paid the         |
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20|aircraft excise tax levied by Section 6001 et seq. of this title or    |
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21|which are specifically exempt from such tax pursuant to the            |
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22|provisions of Section 6003 of this title;                              |
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arsid682564 (Floor Amendments Only)                                Page 4
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 1|    10.  The sale of low-speed or medium-speed electrical vehicles     |
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 2|on which the Oklahoma Motor Vehicle Excise Tax levied in Section       |
  |                                                                       |
 3|2101 et seq. of this title has been or will be paid; and               |
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 4|    11.  Effective January 1, 2005, sales of cigarettes on which the   |
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 5|tax levied in Section 301 et seq. of this title or tobacco products    |
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 6|on which the tax levied in Section 401 et seq. of this title has       |
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 7|been paid.                                                             |
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 8|    SECTION 2.     AMENDATORY     68 O.S. 2011, Section 1361, as       |
  |                                                                       |
 9|last amended by Section 3, Chapter 356, O.S.L. 2017 (68 O.S. Supp.     |
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10|2020, Section 1361), is amended to read as follows:                    |
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11|    Section 1361.  A.  1.  Except as otherwise provided by             |
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12|subsection C of this section, the tax levied by Section 1350 et seq.   |
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13|of this title shall be paid by the consumer or user to the vendor as   |
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14|trustee for and on account of this state.  Except as otherwise         |
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15|provided by subsection C of this section, each and every vendor in     |
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16|this state shall collect from the consumer or user the full amount     |
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17|of the tax levied by Section 1350 et seq. of this title, or an         |
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18|amount equal as nearly as possible or practicable to the average       |
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19|equivalent thereof.  Every person required to collect any tax          |
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20|imposed by Section 1350 et seq. of this title shall be personally      |
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21|liable for the tax.                                                    |
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22|    2.  However, the Oklahoma Tax Commission shall relieve sellers     |
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23|or certified service providers that follow the requirements of this    |
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24|section from the tax otherwise applicable if it is determined that     |
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arsid682564 (Floor Amendments Only)                                Page 5
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 1|the purchaser improperly claimed an exemption and to hold the          |
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 2|purchaser liable for the nonpayment of tax.  This relief from          |
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 3|liability does not apply to:                                           |
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 4|         a.   a seller or certified service provider (CSP) who         |
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 5|              fraudulently fails to collect tax,                       |
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 6|         b.   a seller who solicits purchasers to participate in the   |
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 7|              unlawful claim of an exemption, or                       |
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 8|         c.   a seller who accepts an exemption certificate when the   |
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 9|              purchaser claims an entity-based exemption when:         |
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10|              (1)  the subject of the transaction sought to be         |
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11|                   covered by the exemption certificate is actually    |
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12|                   received by the purchaser at a location operated    |
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13|                   by the seller, and                                  |
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14|              (2)   the Tax Commission provides an exemption           |
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15|                   certificate that clearly and affirmatively          |
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16|                   indicates that the claimed exemption is not         |
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17|                   available in this state.                            |
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18|    3.  The Tax Commission shall relieve a seller or CSP of the tax    |
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19|otherwise applicable if the seller obtains a fully completed           |
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20|exemption certificate or captures the relevant data elements           |
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21|required by the Tax Commission within ninety (90) days subsequent to   |
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22|the date of sale.                                                      |
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23|    If the seller or CSP has not obtained an exemption certificate     |
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24|or all relevant data elements as provided by the Tax Commission, the   |
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arsid682564 (Floor Amendments Only)                                Page 6
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 1|seller may, within one hundred twenty (120) days subsequent to a       |
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 2|request for substantiation, either prove that the transaction was      |
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 3|not subject to tax by other means or obtain a fully completed          |
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 4|exemption certificate from the purchaser, taken in good faith.         |
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 5|    The Tax Commission shall relieve a seller or CSP of the tax        |
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 6|otherwise applicable if it obtains a blanket exemption certificate     |
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 7|for a purchaser with which the seller has a recurring business         |
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 8|relationship.  The Tax Commission shall not request from the seller    |
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 9|or CSP renewal of blanket certificates or updates of exemption         |
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10|certificate information or data elements when there is a recurring     |
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11|business relationship between the buyer and seller.  For purposes of   |
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12|this section, a recurring business relationship exists when a period   |
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13|of no more than twelve (12) months elapses between sales               |
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14|transactions.                                                          |
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15|    4.  Upon the granting of relief from liability to the vendor as    |
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16|provided in this section, the purchaser shall be liable for the        |
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17|remittance of the tax, interest and penalty due thereon and the Tax    |
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18|Commission shall pursue collection thereof from the purchaser in any   |
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19|manner in which sales tax may be collected from a vendor.              |
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20|    B.  Except as otherwise provided by subsection C of this           |
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21|section, vendors shall add the tax imposed by Section 1350 et seq.     |
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22|of this title, or the average equivalent thereof, to the sales         |
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23|price, charge, consideration, gross receipts or gross proceeds of      |
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24|the sale of tangible personal property or services taxed by Section    |
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arsid682564 (Floor Amendments Only)                                Page 7
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 1|1350 et seq. of this title, and when added such tax shall constitute   |
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 2|a part of such price or charge, shall be a debt from the consumer or   |
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 3|user to vendor until paid, and shall be recoverable at law in the      |
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 4|same manner as other debts.                                            |
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 5|    C.  A person who has obtained a direct payment permit as           |
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 6|provided in Section 1364.1 of this title shall accrue all taxes        |
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 7|imposed pursuant to Section 1354 or 1402 of this title on all          |
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 8|purchases made by the person pursuant to the permit at the time the    |
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 9|purchased items are first used or consumed in a taxable manner and     |
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10|pay the accrued tax directly to the Oklahoma Tax Commission on         |
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11|reports as required by Section 1365 of this title.                     |
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12|    D.  Except as otherwise provided by subsection C of this           |
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13|section, a vendor who willfully or intentionally fails, neglects or    |
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14|refuses to collect the full amount of the tax levied by Section 1350   |
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15|et seq. of this title, or willfully or intentionally fails, neglects   |
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16|or refuses to comply with the provisions of Section 1350 et seq. of    |
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17|this title, or remits or rebates to a consumer or user, either         |
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18|directly or indirectly, and by whatsoever means, all or any part of    |
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19|the tax levied by Section 1350 et seq. of this title, or makes in      |
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20|any form of advertising, verbally or otherwise, any statement which    |
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21|implies that the vendor is absorbing the tax, or paying the tax for    |
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22|the consumer or user by an adjustment of prices or at a price          |
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23|including the tax, or in any manner whatsoever, shall be deemed        |
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24|guilty of a misdemeanor, and upon conviction thereof shall be fined    |
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arsid682564 (Floor Amendments Only)                                Page 8
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 1|not more than Five Hundred Dollars ($500.00), and upon conviction      |
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 2|for a second or other subsequent offense shall be fined not more       |
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 3|than One Thousand Dollars ($1,000.00), or incarcerated for not more    |
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 4|than sixty (60) days, or both.  Provided, sales by vending machines    |
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 5|may be made at a stated price which includes state and any municipal   |
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 6|sales tax.                                                             |
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 7|    E.  A consumer or user who willfully or intentionally fails,       |
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 8|neglects or refuses to pay the full amount of tax levied by Section    |
  |                                                                       |
 9|1350 et seq. of this title or willfully or intentionally uses a        |
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10|sales tax permit or direct payment permit which is invalid, expired,   |
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11|revoked, canceled or otherwise limited to a specific line of           |
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12|business or willfully or intentionally issues a resale certificate     |
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13|to a vendor to evade the tax levied by Section 1350 et seq. of this    |
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14|title shall be subject to a penalty in the amount of Five Hundred      |
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15|Dollars ($500.00) per reporting period upon determination thereof,     |
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16|which shall be apportioned as provided for the apportionment of the    |
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17|tax.                                                                   |
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18|    F.  Any sum or sums collected or accrued or required to be         |
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19|collected or accrued in Section 1350 et seq. of this title shall be    |
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20|deemed to be held in trust for the State of Oklahoma, and, as          |
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21|trustee, the collecting vendor or holder of a direct payment permit    |
  |                                                                       |
22|as provided for in Section 1364.1 of this title shall have a           |
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23|fiduciary duty to the State of Oklahoma in regards to such sums and    |
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24|shall be subject to the trust laws of this state.                      |
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arsid682564 (Floor Amendments Only)                                Page 9
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 1|    G.  Notwithstanding the provisions of this section, the sales      |
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 2|tax associated with the purchase of a motor vehicle shall be paid by   |
  |                                                                       |
 3|the consumer in the same manner and time as the motor vehicle excise   |
  |                                                                       |
 4|tax for said motor vehicle is due.                                     |
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 5|    SECTION 3.     AMENDATORY     68 O.S. 2011, Section 1402, as       |
  |                                                                       |
 6|amended by Section 4, Chapter 356, O.S.L. 2017 (68 O.S. Supp. 2020,    |
  |                                                                       |
 7|Section 1402), is amended to read as follows:                          |
  |                                                                       |
 8|    Section 1402.  There is hereby levied and there shall be paid by   |
  |                                                                       |
 9|every person storing, using, or otherwise consuming within this        |
  |                                                                       |
10|state, tangible personal property purchased or brought into this       |
  |                                                                       |
11|state, an excise tax on the storage, use, or other consumption in      |
  |                                                                       |
12|this state of such property at the rate of four and one-half percent   |
  |                                                                       |
13|(4.5%) of the purchase price of such property.  Said tax shall not     |
  |                                                                       |
14|be levied on tangible personal property intended solely for use in     |
  |                                                                       |
15|other states, but which is stored in Oklahoma this state pending       |
  |                                                                       |
16|shipment to such other states or which is temporarily retained in      |
  |                                                                       |
17|Oklahoma this state for the purpose of fabrication, repair, testing,   |
  |                                                                       |
18|alteration, maintenance, or other service.  The tax in such            |
  |                                                                       |
19|instances shall be paid at the time of importation or storage of the   |
  |                                                                       |
20|property within the state and a subsequent credit shall be taken by    |
  |                                                                       |
21|the taxpayer for the amount so paid upon removal of the property       |
  |                                                                       |
22|from the state.  Such tax is hereby levied and shall be paid in an     |
  |                                                                       |
23|amount equal to four and one-half percent (4.5%) of the purchase       |
  |                                                                       |
24|price of such tangible personal property.  Notwithstanding the         |
  |                                                                       |
arsid682564 (Floor Amendments Only)                                Page 10
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 1|provisions of this section, the tax associated with a motor vehicle    |
  |                                                                       |
 2|shall be paid by the consumer in the same manner and time as the       |
  |                                                                       |
 3|motor vehicle excise tax for said motor vehicle is due.                |
  |                                                                       |
 4|    SECTION 4.     AMENDATORY     68 O.S. 2011, Section 1404, as       |
  |                                                                       |
 5|amended by Section 5, Chapter 356, O.S.L. 2017 (68 O.S. Supp. 2020,    |
  |                                                                       |
 6|Section 1404), is amended to read as follows:                          |
  |                                                                       |
 7|    Section 1404.  The provisions of Section 1401 et seq. of this      |
  |                                                                       |
 8|title shall not apply:                                                 |
  |                                                                       |
 9|    1.  In respect to the use of any article of tangible personal      |
  |                                                                       |
10|property brought into the State of Oklahoma this state by a            |
  |                                                                       |
11|nonresident individual, visiting in this state, for his or her         |
  |                                                                       |
12|personal use or enjoyment, while within the state;                     |
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13|    2.  In respect to the use of tangible personal property            |
  |                                                                       |
14|purchased for resale before being used;                                |
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15|    3.  In respect to the use of any article of tangible personal      |
  |                                                                       |
16|property on which a tax, equal to or in excess of that levied by       |
  |                                                                       |
17|Section 1401 et seq. of this title, has been paid by the person        |
  |                                                                       |
18|using such tangible personal property in this state, whether such      |
  |                                                                       |
19|tax was levied under the laws of this state or some other state of     |
  |                                                                       |
20|the United States.  If any article of tangible personal property has   |
  |                                                                       |
21|already been subjected to a tax, by this or any other state, in        |
  |                                                                       |
22|respect to its sale or use, in an amount less than the tax imposed     |
  |                                                                       |
23|by Section 1401 et seq. of this title, the provisions of Section       |
  |                                                                       |
24|1401 et seq. of this title shall apply to it by a rate measured by     |
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arsid682564 (Floor Amendments Only)                                Page 11
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 1|the difference only between the rate herein provided and the rate by   |
  |                                                                       |
 2|which the previous tax upon the sale or use was computed.  Provided,   |
  |                                                                       |
 3|that no credit shall be given for taxes paid in another state, if      |
  |                                                                       |
 4|that state does not grant like credit for taxes paid in Oklahoma       |
  |                                                                       |
 5|this state;                                                            |
  |                                                                       |
 6|    4.  In respect to the use of tangible personal property now        |
  |                                                                       |
 7|specifically exempted from taxation under Oklahoma Sales Tax Code.     |
  |                                                                       |
 8|Provided, for the sale of motor vehicles or any optional equipment     |
  |                                                                       |
 9|or accessories attached to motor vehicles on which the Oklahoma        |
  |                                                                       |
10|Motor Vehicle Excise Tax levied pursuant to Sections 2101 through      |
  |                                                                       |
11|2108 of this title has been, or will be paid, the exceptions shall     |
  |                                                                       |
12|apply to all but a portion of the levy provided under Section 1402     |
  |                                                                       |
13|of this title, equal to one and twenty-five-hundredths percent         |
  |                                                                       |
14|(1.25%) of the purchase price.  Provided further, the sale of motor    |
  |                                                                       |
15|vehicles shall not be subject to any sales and use taxes levied by     |
  |                                                                       |
16|cities, counties or other jurisdictions of the state;                  |
  |                                                                       |
17|    5.  In respect to the use of any article or tangible personal      |
  |                                                                       |
18|property brought into the state by an individual with intent to        |
  |                                                                       |
19|become a resident of this state where such personal property is for    |
  |                                                                       |
20|such individual's personal use or enjoyment;                           |
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21|    6.  In respect to the use of any article of tangible personal      |
  |                                                                       |
22|property used or to be used by commercial airlines or railroads;       |
  |                                                                       |
23|                                                                       |
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24|                                                                       |
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arsid682564 (Floor Amendments Only)                                Page 12
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 1|    7.  In respect to livestock purchased outside this state and       |
  |                                                                       |
 2|brought into this state for feeding or breeding purposes, and which    |
  |                                                                       |
 3|is later resold; and                                                   |
  |                                                                       |
 4|    8.  Effective January 1, 1991, in respect to the use of rail       |
  |                                                                       |
 5|transportation cars to haul coal to coal-fired plants located in       |
  |                                                                       |
 6|this state which generate electric power.                              |
  |                                                                       |
 7|    SECTION 5.     AMENDATORY     68 O.S. 2011, Section 2106, as       |
  |                                                                       |
 8|amended by Section 2, Chapter 356, O.S.L. 2017 (68 O.S. Supp. 2020,    |
  |                                                                       |
 9|Section 2106), is amended to read as follows:                          |
  |                                                                       |
10|    Section 2106.  (a) A.  The excise tax levied by this article is    |
  |                                                                       |
11|in lieu of all other taxes on the transfer or the first registration   |
  |                                                                       |
12|in this state of vehicles, including the optional equipment and        |
  |                                                                       |
13|accessories attached thereto at the time of sale and sold as a part    |
  |                                                                       |
14|thereof, except:                                                       |
  |                                                                       |
15|    (1) 1.  Annual vehicle registration and license fees;              |
  |                                                                       |
16|    (2) 2.  The fee of One Dollar ($1.00) for the issuance of a        |
  |                                                                       |
17|certificate of title; and                                              |
  |                                                                       |
18|    (3) 3.  Any fee charged under the jurisdiction of the              |
  |                                                                       |
19|Corporation Commission; and                                            |
  |                                                                       |
20|    (4)  One and twenty-five-hundredths percent (1.25%) of the gross   |
  |                                                                       |
21|receipts upon which the tax is levied by Section 1354 of this title.   |
  |                                                                       |
22| Provided, the sale of motor vehicles shall not be subject to any      |
  |                                                                       |
23|sales and use taxes levied by cities, counties or other                |
  |                                                                       |
24|jurisdictions of the state.                                            |
  |                                                                       |
arsid682564 (Floor Amendments Only)                                Page 13
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 1|    (b) B.  This section shall not relieve any new or used motor       |
  |                                                                       |
 2|vehicle dealer or any other vendor of vehicles from liability for      |
  |                                                                       |
 3|the sales tax on all sales of accessories or optional equipment, or    |
  |                                                                       |
 4|parts, which are not attached to, and sold as a part thereof and       |
  |                                                                       |
 5|included in the sale of such vehicles.                                 |
  |                                                                       |
 6|    SECTION 6.  This act shall become effective July 1, 2021.          |
  |                                                                       |
 7|    SECTION 7.  It being immediately necessary for the preservation    |
  |                                                                       |
 8|of the public peace, health or safety, an emergency is hereby          |
  |                                                                       |
 9|declared to exist, by reason whereof this act shall take effect and    |
  |                                                                       |
10|be in full force from and after its passage and approval.              |
  |                                                                       |
11|    Passed the Senate the 9th day of March, 2021.                      |
  |                                                                       |
12|                                                                       |
  |                                                                       |
13|                                                                       |
  |                                    Presiding Officer of the Senate    |
14|                                                                       |
  |                                                                       |
15|    Passed the House of Representatives the ____ day of __________,    |
  |                                                                       |
16|2021.                                                                  |
  |                                                                       |
17|                                                                       |
  |                                                                       |
18|                                                                       |
  |                                     Presiding Officer of the House    |
19|                                                 of Representatives    |
  |                                                                       |
20|                                                                       |
  |                                                                       |
21|                                                                       |
  |                                                                       |
22|                                                                       |
  |                                                                       |
23|                                                                       |
  |                                                                       |
24|                                                                       |
  |                                                                       |
arsid682564 (Floor Amendments Only)                                Page 14
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