Okla. Admin. Code § 670:20-45-5

Current through Vol. 42, No. 3, October 15, 2024

Section 670:20-45-5 - Excise tax levy and exemptions

(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.

Okla. Admin. Code § 670:20-45-5

Adopted by Oklahoma Register, Volume 41, Issue 23, August 15, 2024, eff. 8/25/2024