Okla. Admin. Code § 710:65-13-40

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

Section 710:65-13-40 - Sales by churches; sales to churches

(a)Sales "by" churches. Sales by churches are not subject to sales tax when it can be said that such selling is noncompetitive with business establishments.

(1) The following are tests for determining that such selling is noncompetitive:

(A) The transactions are conducted by members of the church and not by any franchisee or licensee.

(B) All of the proceeds must go to the church organization.

(C) The transaction must not be a continuing one but rather should be held whether annually or a reasonably small number of times within a year. The test of reasonableness would be an administrative decision, to be made by the Commission.

(D) The reasonably ascertainable dominant motive of most transferees of the items sold must be the making of a contribution, with the transfer of property being merely incidental and secondary to the dominant purpose of making a gift to the church.

(2) In addition, there are these further considerations as guides to the resolution of questions raised by each individual situation:

(A) The nature of the particular item sold. All other things being equal, the decision as to candy might well be different from the decision as to refrigerators.

(B) The character of the particular sale, and the real practical effect upon putative competition. [See: 68 O.S. § 1356(7)]

(b)Sales "to" churches. Generally, sales made directly to a church are exempt from sales and use tax. Only sales purchased by the church, invoiced to the church, and paid for by funds or check directly from the church, will qualify for the exemption. A vendor wishing to be relieved of liability to collect the tax should follow the requirements of OAC710:65-7-6 and 710:65-7-15.

(c)Purchases by contractors. Purchases of taxable personal property or services by a contractor with whom a church has duly entered into a construction contract, or to any subcontractor to such construction contract, are exempt provided they are necessary for carrying out the contract. A vendor wishing to be relieved of liability to collect the tax should follow the requirements of subsection (c) of OAC710:65-7-13.

(d)Application process. Application for exemption is made by submitting to the Business Tax Services Division, Oklahoma Tax Commission, Oklahoma City, OK 73194, a completed Form 13-16- A, contained in Packet E, available online at www.tax.ok.gov along with supporting documentation which shows that the church consists of a body of believers which holds religious services and public notification of the place and time of those services such as a copy of a newspaper or yellow pages ad, newsletter or bulletin sent to regular attendees or distributed during a service.

Okla. Admin. Code § 710:65-13-40

Amended at 12 Ok Reg 2635, eff 6-26-95; Amended at 15 Ok Reg 2827, eff 6-25-98; Amended at 18 Ok Reg 2823, eff 6-25-01; Amended at 24 Ok Reg 2397, eff 6-25-07; Amended at 27 Ok Reg 2308, eff 7-11-10

Amended by Oklahoma Register, Volume 32, Issue 23, August 17, 2015, eff. 8/27/2015

Amended by Oklahoma Register, Volume 38, Issue 23, August 16, 2021, eff. 9/1/2021

Amended by Oklahoma Register, Volume 39, Issue 24, September 1, 2022, eff. 9/11/2022