Okla. Admin. Code § 710:65-13-180

Current through Vol. 42, No. 4, November 1, 2024

Section 710:65-13-180 - Motor fuel and other petroleum products; taxable and exempt transactions

(a)Exempt sales in general. The sales tax will not be applicable to the gross receipts derived from the sale of gasoline, gasohol, or other motor fuel on which the Oklahoma motor fuel excise tax, gasoline excise tax, or special fuels tax has been paid.

(b)Diesel fuel exemption. Diesel fuel users whose purchases of diesel fuel in bulk quantities are primarily for delivery by them into the fuel supply tanks of motor vehicles in Oklahoma, must apply for a Sales Tax Permit issued by the Oklahoma Tax Commission and assume direct liability for the payment of state and local taxes upon all withdrawals from bulk storage of fuel not used "on-the-road" and therefore not subject to motor fuel or gasoline excise taxes.

(c)Limitations on motor fuels exemption. Sales of motor fuels which are exempt from the motor fuel tax, such as specially prepared naphtha used in established places of business for cleaning and dyeing purposes, and kerosene and any other motor fuel that is used for illuminating or heating purposes are subject to sales tax.

(d)Aircraft fuels. The gross receipts from the sales of all chemicals and petroleum products used as fuel to generate power in aircraft engines are exempt from all state and local sales and use taxes because such sales are subject to the levy of motor fuel excise tax.

(e)Diesel fuel sold for use by commercial watercraft. Sales of diesel fuel sold for consumption by commercial vessels, barges, and other commercial watercraft are exempt from all state and local sales and use taxes. [See: 68 O.S. § 1357(24) ]

(f)Crude and other oil and gas well exemptions. Goods produced in Oklahoma that are subject to the gross production tax provisions at 68 O.S. §§ 1001 et seq. are exempt from sales and use taxes when produced. However, sales of such products which would normally be exempt under 68 O.S. § 1355(3) are taxable when made to a taxable consumer/user, except for sales of crude petroleum, diesel, or natural or casing head gas, that are sold solely for the purpose of facilitating the production of oil or gas by injection into the earth.

(g)Limitations on crude petroleum and other oil and gas well products exemption. The exemption for crude petroleum and other oil and gas well products shall not include the application of a lubricant or cleaning agent, i.e. kerosene, to the oil and gas well production machinery. Nor shall it apply to fuel used for producing power for equipment used to drill or produce from an oil or gas well or to sales of petroleum-based chemicals, additives, or other substances used in the drilling of or production from a well. Even though these uses may indirectly facilitate production, they do not come within the purview of the exemption which is limited to crude petroleum, diesel fuel, natural or casinghead gas that is injected into the earth primarily and directly for the purpose of facilitating or promoting the production of oil or gas. [See: 68 O.S. § 1355 ]

Okla. Admin. Code § 710:65-13-180

Amended at 15 Ok Reg 2827, eff 6-25-98; Amended at 17 Ok Reg 2677, eff 6-25-00; Amended at 25 Ok Reg 2070, eff 7-1-08