Okla. Admin. Code § 710:65-13-54
Current through Vol. 42, No. 4, November 1, 2024
Section 710:65-13-54 - Exemption for sales of machinery and equipment purchased and used by persons and establishments primarily engaged in computer services and data processing(a)Definitions. The following words and terms, when used in this Section shall have the following meaning, unless the context clearly indicates otherwise:(1)"Computer" means an electronic device that accepts information in digital or similar form and manipulates it for a result based on a sequence of instructions. [68 O.S. § 1352 ](2)"Data processing equipment" means machines which perform work using programmed instruction, and which singly or collectively have capabilities of memory, logic, arithmetic or communication and all machines used in support of machines possessing those capabilities.(3)"Equipment" , for purposes of this Section, means any independent device or tool, separate from any machinery, but essential to use of the machinery, or any sub-unit or sub-assembly comprising a component of any machinery or auxiliary, adjunct, or attachment, to parts of machinery. "Equipment" also specifically includes "computers" and "Data processing equipment" , as defined in this Section.(4)"Machinery" , for purposes of this Section, means major mechanical, electrical, or electronic machines or major components of such machines.(5)"Qualified purchaser" means an establishment primarily engaged in computer services and data processing:(A) Which is defined under Industrial Group Numbers 7372 (prepackaged software) and 7373 (computer integrated system design) of the Standard Industrial Classification (SIC) Manual, latest version, and which derives at least fifty percent (50%) of its annual gross revenues from the sale of a product or service to an out-of-state buyer or consumer, or(B) Which is defined under Industrial Group Number 7374 (computer processing and data preparation processing services) of the SIC Manual, latest version, which derives at least eighty percent (80%) of their annual gross revenues from the sale of a product or service to an out-of-state buyer or consumer.(6)"Related peripheral" means input, output, processing, storage, software, and communication facilities which are connected or related to a device in a system or network.(b)General provisions. The sale of machinery and equipment, including computers, data processing equipment, and related peripherals, to a qualified purchaser primarily engaged in computer services and data processing as defined by (a) of this Section is specifically exempt from the levy of sales or use tax. For purposes of determining "qualified purchaser" status, all sales to the federal government shall be considered sales to an out-of-state buyer or consumer.(c)Examples of exempt items. Exempt items include, but are not limited to: (21) Video display terminal(d)Examples of non-exempt items. The exemption shall not apply to: (e)Application. Application for exemption may be made by filing a signed, sworn affidavit with the Commission, stating:(1) The name, address, and federal employer's identification number of the applicant and the name and title of the person signing for the applicant;(2) A complete description of the computer services and data processing that will take place within the establishment;(3) A statement of the establishment's annual gross revenues, and the percentage of the annual gross revenues derived from sales made to out-of-state buyers and consumers, determined for the most recently completed income tax year;(4) A statement that the applicant is primarily engaged in the activities appropriate to SIC Code classification number 7372, 7373 or 7374, as applicable;(5) The signature of a person authorized to bind the applicant, signed under penalty of perjury before a notary; and(6) Such additional information as the Commission may require to confirm eligibility.(f)Review and determination. Upon receipt of the application, the Commission will review and make a determination as to the applicant's eligibility. Upon approval, a letter certifying the exemption allowed the establishment will be forwarded to the applicant.(g)Issuance, scope, limitations of direct payment permit. The letter of certification issued by the Commission will become effective, commencing July 1st following the ending date of the income tax year on which the statement required by subsection (e) was calculated, for a period of twelve (12) months, and may be renewed, subject to annual review and recertification of the applicant's eligibility by the Commission.(h)Denial of certification; cancellation, suspension, revocation of certification. Certification may be denied, cancelled, suspended, or revoked by the Commission for non-compliance with the provisions of this Section, with applicable Oklahoma tax statutes, or for other good cause shown. Proceedings related to the cancellation or refusal to issue a certification pursuant to this Section shall be governed by 710:1-5-100 and 710:1-5-21 through 710:1-5-49 of the permanent rules of the Commission.Okla. Admin. Code § 710:65-13-54
Added at 14 Ok Reg 2711, eff 6-26-97; Amended at 21 Ok Reg 2581, eff 6-25-04; Amended at 25 Ok Reg 2070, eff 7-1-08Amended by Oklahoma Register, Volume 32, Issue 23, August 17, 2015, eff. 8/27/2015