1| STATE OF OKLAHOMA | | | 2| 1st Session of the 59th Legislature (2023) | | | 3|HOUSE BILL 1039 By: Rosecrants | | | 4| | | | 5| | | | 6| AS INTRODUCED | | | 7| An Act relating to revenue and taxation; amending 68 | | O.S. 2021, Sections 1357.10, 1377 and 2701, which | 8| relate to tax exemptions for certain sales; exempting | | school supplies; modifying maximum per-item | 9| allowance; defining term; directing State Board of | | Education to promulgate list; clarifying citations; | 10| providing an effective date; and declaring an | | emergency. | 11| | | | 12| | | | 13| | | | 14|BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA: | | | 15| SECTION 1. AMENDATORY 68 O.S. 2021, Section 1357.10, is | | | 16|amended to read as follows: | | | 17| Section 1357.10 A. The sale of an article of clothing or | | | 18|footwear designed to be worn on or about the human body or any | | | 19|school supplies shall be exempt from the tax imposed by Section 1354 | | | 20|ofTitle 68 of the Oklahoma Statutesthis title if: | | | 21| 1. The sales price of the article of clothing or footwear is | | | 22|less thanOne Hundred Dollars ($100.00)Seventy-five Dollars | | | 23|($75.00) and the price of the school supply item is less than Fifty | | | 24|Dollars ($50.00); and | | | Req. No. 5949 Page 1 ___________________________________________________________________________
1| 2. The sale takes place during a period beginning at 12:01 a.m. | | | 2|on the first Friday in August and ending at 12 midnight on the | | | 3|following Sunday, covering a period of three (3) days. | | | 4| B. Subsection A of this section shall not apply to: | | | 5| 1. Any special clothing or footwear that is primarily designed | | | 6|for athletic activity or protective use and that is not normally | | | 7|worn except when used for athletic activity or protective use for | | | 8|which it is designed; | | | 9| 2. Accessories, including jewelry, handbags, luggage, | | | 10|umbrellas, wallets, watches, and similar items carried on or about | | | 11|the human body, without regard to whether worn on the body in a | | | 12|manner characteristic of clothing; and | | | 13| 3. The rental of clothing or footwear. | | | 14| C. The Oklahoma Tax Commission shall promulgate any necessary | | | 15|rules to implement the provisions of this section. | | | 16| D. For purposes of subsection A of this section, school | | | 17|supplies shall include binders, calculators, cellophane tape, | | | 18|colored pencils, compasses, notebooks, construction paper, crayons, | | | 19|erasers, folders, glue sticks, liquid glue, highlighters, legal | | | 20|pads, lunchboxes, markers, notebook filler paper, paste, pencils, | | | 21|including mechanical pencils and pencil refills, pens, including | | | 22|felt pens, ballpoint pens, fountain pens, and pen refills, poster | | | 23|board, poster paper, protractors, rulers, scissors, staplers, | | | 24|staples, paints, including acrylic, tempera, watercolors, and oil | | | Req. No. 5949 Page 2 ___________________________________________________________________________
1|paints, paintbrushes for artwork, sketch and drawing pads, reference | | | 2|maps and guides, all required textbooks on an official school book | | | 3|list with a sales price of more than Thirty Dollars ($30.00) and | | | 4|less than Fifty Dollars ($50.00) and any additional items deemed | | | 5|school supplies by the State Board of Education. Each year, the | | | 6|State Board of Education shall promulgate an official list of school | | | 7|supplies, which will additionally be treated as tax-exempt under | | | 8|this section. | | | 9| SECTION 2. AMENDATORY 68 O.S. 2021, Section 1377, is | | | 10|amended to read as follows: | | | 11| Section 1377. The sales tax imposed by any county or authority | | | 12|authorized by law to levy a sales tax shall not be imposed upon the | | | 13|sale of an article of clothing or footwear designed to be worn on or | | | 14|about the human body or any school supplies in accordance with and | | | 15|to the extent set forth in Section31357.10 of thisacttitle. | | | 16| SECTION 3. AMENDATORY 68 O.S. 2021, Section 2701, is | | | 17|amended to read as follows: | | | 18| Section 2701. A. Any incorporated city or town in this state | | | 19|is hereby authorized to assess, levy, and collect taxes for general | | | 20|and special purposes of municipal government as the Legislature may | | | 21|levy and collect for purposes of state government, subject to the | | | 22|provisions of subsection F of this section, except ad valorem | | | 23|property taxes. Provided: | | | 24| | | | Req. No. 5949 Page 3 ___________________________________________________________________________
1| 1. Taxes shall be uniform upon the same class subjects, and any | | | 2|tax, charge, or fee levied upon or measured by income or receipts | | | 3|from the sale of products or services shall be uniform upon all | | | 4|classes of taxpayers; | | | 5| 2. Motor vehicles may be taxed by the city or town only when | | | 6|such vehicles are primarily used or located in such city or town for | | | 7|a period of time longer than six (6) months of a taxable year; | | | 8| 3. The provisions of this section shall not be construed to | | | 9|authorize imposition of any tax upon persons, firms, or corporations | | | 10|exempted from other taxation under the provisions of Sections 348.1, | | | 11|624 and 321 of Title 36 of the Oklahoma Statutes, by reason of | | | 12|payment of taxes imposed under such sections; | | | 13| 4. Cooperatives and communications companies are hereby | | | 14|authorized to pass on to their subscribers in the incorporated city | | | 15|or town involved, the amount of any special municipal fee, charge or | | | 16|tax hereafter assessed or levied on or collected from such | | | 17|cooperatives or communications companies; | | | 18| 5. No earnings, payroll or income taxes may be levied on | | | 19|nonresidents of the cities or towns levying such tax; | | | 20| 6. The governing body of any city or town shall be prohibited | | | 21|from proposing taxing ordinances more often than three times in any | | | 22|calendar year, or twice in any six-month period; and | | | 23| | | | 24| | | | Req. No. 5949 Page 4 ___________________________________________________________________________
1| 7. Any revenues derived from a tax authorized by this | | | 2|subsection not dedicated to a limited purpose shall be deposited in | | | 3|the municipal general fund. | | | 4| B. A sales tax authorized in subsection A of this section may | | | 5|be levied for limited purposes specified in the ordinance levying | | | 6|the tax. Such ordinance shall be submitted to the voters for | | | 7|approval as provided in Section 2705 of this title. Any sales tax | | | 8|levied or any change in the rate of a sales tax levied pursuant to | | | 9|the provisions of this section shall become effective on the first | | | 10|day of the calendar quarter following approval by the voters of the | | | 11|city or town unless another effective date, which shall also be on | | | 12|the first day of a calendar quarter, is specified in the ordinance | | | 13|levying the sales tax or changing the rate of sales tax. Such | | | 14|ordinance shall describe with specificity the projects or | | | 15|expenditures for which the limited-purpose tax levy would be made. | | | 16|The municipal governing body shall create a limited-purpose fund and | | | 17|deposit therein any revenue generated by any tax levied pursuant to | | | 18|this subsection. Money in the fund shall be accumulated from year | | | 19|to year. The fund shall be placed in an insured interest-bearing | | | 20|account and the interest which accrues on the fund shall be retained | | | 21|in the fund. The fund shall be nonfiscal and shall not be | | | 22|considered in computing any levy when the municipality makes its | | | 23|estimate to the excise board for needed appropriations. Money in | | | 24|the limited-purpose tax fund shall be expended only as accumulated | | | Req. No. 5949 Page 5 ___________________________________________________________________________
1|and only for the purposes specifically described in the taxing | | | 2|ordinance as approved by the voters. | | | 3| C. The Oklahoma Tax Commission shall give notice to all vendors | | | 4|of a rate change at least sixty (60) days prior to the effective | | | 5|date of the rate change. Provided, for purchases from printed | | | 6|catalogs wherein the purchaser computed the tax based upon local tax | | | 7|rates published in the catalog, the rate change shall not be | | | 8|effective until the first day of a calendar quarter after a minimum | | | 9|of one hundred twenty-days' notice to vendors. Failure to give | | | 10|notice as required by this section shall delay the effective date of | | | 11|the rate change to the first day of the next calendar quarter. | | | 12| D. The change in the boundary of a municipality shall be | | | 13|effective, for sales and use tax purposes only, on the first day of | | | 14|a calendar quarter after a minimum of sixty (60) days' notice to | | | 15|vendors. | | | 16| E. If the proceeds of any sales tax levied by a municipality | | | 17|pursuant to subsection B of this section are being used by the | | | 18|municipality for the purpose of retiring indebtedness incurred by | | | 19|the municipality or by a public trust of which the municipality is a | | | 20|beneficiary for the specific purpose for which the sales tax was | | | 21|imposed, the sales tax shall not be repealed until such time as the | | | 22|indebtedness is retired. However, in no event shall the life of the | | | 23|tax be extended beyond the duration approved by the voters of the | | | 24|municipality. The provisions of this subsection shall apply to all | | | Req. No. 5949 Page 6 ___________________________________________________________________________
1|sales tax levies imposed by a municipality and being used by the | | | 2|municipality for the purposes set forth in this subsection prior to | | | 3|or after July 1, 1995. | | | 4| F. The sale of an article of clothing or footwear designed to | | | 5|be worn on or about the human body or any school supplies shall be | | | 6|exempt from the sales tax imposed by any incorporated city or town, | | | 7|in accordance with and to the extent set forth in Section 1357.10 of | | | 8|this title. | | | 9| G. Any municipality that levies a dedicated tax pursuant to a | | | 10|vote of the people for the purpose of funding public safety or any | | | 11|other governmental purpose shall not redirect all or a portion of | | | 12|the dedicated tax revenue to another purpose without a vote of the | | | 13|people authorizing such action. | | | 14| SECTION 4. The act shall become effective July 1, 2023. | | | 15| SECTION 5. It being immediately necessary for the preservation | | | 16|of the public peace, health or safety, an emergency is hereby | | | 17|declared to exist, by reason whereof this act shall take effect and | | | 18|be in full force from and after its passage and approval. | | | 19| | | | 20| 59-1-5949 MAH 12/20/22 | | | 21| | | | 22| | | | 23| | | | 24| | | | Req. No. 5949 Page 7