{"data":{"id":"us-ok/okla.-stat.-tit.-68-68-1359","jurisdiction":"us-ok","citation":"Okla. Stat. tit. 68, § 68-1359","heading":"Exemptions – Manufacturing","body":"There are hereby specifically exempted from the tax levied by\n\nSection 1350 et seq. of this title:\n\n1. Sales of goods, wares, merchandise, tangible personal\n\nproperty, machinery and equipment to a manufacturer for use in a\n\nmanufacturing operation. Goods, wares, merchandise, property,\n\nmachinery and equipment used in a nonmanufacturing activity or\n\nprocess as set forth in paragraph 14 of Section 1352 of this title\n\nshall not be eligible for the exemption provided for in this\n\nsubsection by virtue of the activity or process being performed in\n\nconjunction with or integrated into a manufacturing operation.\n\nFor the purposes of this paragraph, sales made to any person,\n\nfirm or entity that has entered into a contractual relationship for\n\nthe construction and improvement of manufacturing goods, wares,\n\nmerchandise, property, machinery and equipment for use in a\n\nmanufacturing operation shall be considered sales made to a\n\nmanufacturer which is defined or classified in the North American\n\nIndustry Classification System (NAICS) Manual under Industry Group\n\nNo. 324110. Such purchase shall be evidenced by a copy of the sales\n\nticket or invoice to be retained by the vendor indicating that the\n\npurchases are made for and on behalf of such manufacturer and set\n\nout the name of such manufacturer as well as include a copy of the\n\nManufacturing Exemption Permit of the manufacturer. Any person who\n\nwrongfully or erroneously certifies that purchases are being made on\n\nbehalf of such manufacturer or who otherwise violates this paragraph\n\nshall be guilty of a misdemeanor and upon conviction thereof shall\n\nbe fined an amount equal to double the amount of sales tax involved\n\nor incarcerated for not more than sixty (60) days or both;\n\n2. Ethyl alcohol when sold and used for the purpose of blending\n\nsame with motor fuel on which motor fuel tax is levied by Section\n\n500.4 of this title;\n\n3. Sales of containers when sold to a person regularly engaged\n\nin the business of reselling empty or filled containers or when\n\npurchased for the purpose of packaging raw products of farm, garden,\n\nor orchard for resale to the consumer or processor. This exemption\n\nshall not apply to the sale of any containers used more than once\n\nand which are ordinarily known as returnable containers, except\n\nreturnable soft drink bottles and the cartons, crates, pallets, and\n\ncontainers used to transport returnable soft drink bottles. Each\n\nand every transfer of title or possession of such returnable\n\ncontainers in this state to any person who is not regularly engaged\n\nin the business of selling, reselling or otherwise transferring\n\nempty or filled containers shall be taxable under this Code.\n\nAdditionally, this exemption shall not apply to the sale of labels\n\nor other materials delivered along with items sold but which are not\n\nnecessary or absolutely essential to the sale of the sold\n\nmerchandise;\n\n4. Sales of or transfers of title to or possession of any\n\ncontainers used or to be used more than once and which are\n\nordinarily known as returnable containers and which do or will\n\ncontain beverages or water for human consumption and the cartons,\n\ncrates, pallets, and containers used to transport such returnable\n\ncontainers;\n\n5. Sale of tangible personal property when sold by the\n\nmanufacturer to a person who transports it to a state other than\n\nOklahoma for immediate and exclusive use in a state other than\n\nOklahoma. Provided, no sales at a retail outlet shall qualify for\n\nthe exemption under this paragraph;\n\n6. Machinery, equipment, fuels and chemicals or other materials\n\nincorporated into and directly used or consumed in the process of\n\ntreatment to substantially reduce the volume or harmful properties\n\nof hazardous waste at treatment facilities specifically permitted\n\npursuant to the Oklahoma Hazardous Waste Management Act and operated\n\nat the place of waste generation, or facilities approved by the\n6. Machinery, equipment, fuels and chemicals or other materials\n\nincorporated into and directly used or consumed in the process of\n\ntreatment to substantially reduce the volume or harmful properties\n\nof hazardous waste at treatment facilities specifically permitted\n\npursuant to the Oklahoma Hazardous Waste Management Act and operated\n\nat the place of waste generation, or facilities approved by the\n\nDepartment of Environmental Quality for the cleanup of a site of\n\ncontamination. The term \"hazardous\" waste may include low-level\n\nradioactive waste for the purpose of this paragraph;\n\n7. Except as otherwise provided by subsection I of Section 3658\n\nof this title pursuant to which the exemption authorized by this\n\nparagraph may not be claimed, sales of tangible personal property to\n\na qualified manufacturer or distributor to be consumed or\n\nincorporated in a new manufacturing or distribution facility or to\n\nexpand an existing manufacturing or distribution facility. For\n\npurposes of this paragraph, sales made to a contractor or\n\nsubcontractor that has previously entered into a contractual\n\nrelationship with a qualified manufacturer or distributor for\n\nconstruction or expansion of a manufacturing or distribution\n\nfacility shall be considered sales made to a qualified manufacturer\n\nor distributor. For the purposes of this paragraph, \"qualified\n\nmanufacturer or distributor\" means:\n\na. any manufacturing enterprise whose total cost of\n\nconstruction of a new or expanded facility exceeds the\n\nsum of Five Million Dollars ($5,000,000.00) and in\n\nwhich at least one hundred (100) new full-time-\n\nequivalent employees, as certified by the Oklahoma\n\nEmployment Security Commission, are added and\n\nmaintained for a period of at least thirty-six (36)\n\nmonths as a direct result of the new or expanded\n\nfacility,\n\nb. any manufacturing enterprise whose total cost of\n\nconstruction of a new or expanded facility exceeds the\n\nsum of Ten Million Dollars ($10,000,000.00) and the\n\ncombined cost of construction material, machinery,\n\nequipment and other tangible personal property exempt\n\nfrom sales tax under the provisions of this paragraph\n\nexceeds the sum of Fifty Million Dollars\n\n($50,000,000.00) and in which at least seventy-five\n\n(75) new full-time-equivalent employees, as certified\n\nby the Oklahoma Employment Security Commission, are\n\nadded and maintained for a period of at least thirty-\n\nsix (36) months as a direct result of the new or\n\nexpanded facility,\n\nc. any manufacturing enterprise whose total cost of\n\nconstruction of an expanded facility exceeds the sum\n\nof Three Hundred Million Dollars ($300,000,000.00) and\n\nin which the manufacturer has and maintains an average\n\nemployment level of at least one thousand seven\n\nhundred fifty (1,750) full-time-equivalent employees,\n\nas certified by the Employment Security Commission, or\n\nd. any enterprise primarily engaged in the general\n\nwholesale distribution of groceries defined or\n\nclassified in the North American Industry\n\nClassification System (NAICS) Manual under Industry\n\nGroups No. 4244 and 4245 and which has at least\n\nseventy-five percent (75%) of its total sales to in-\n\nstate customers or buyers and whose total cost of\n\nconstruction of a new or expanded facility exceeds the\n\nsum of Forty Million Dollars ($40,000,000.00) with\n\nsuch construction commencing on or after July 1, 2005,\n\nand before December 31, 2005, and which at least fifty\n\nnew full-time-equivalent employees, as certified by\n\nthe Oklahoma Employment Security Commission, are added\n\nand maintained for a period of at least thirty-six\nwhose total cost of\n\nconstruction of a new or expanded facility exceeds the\n\nsum of Forty Million Dollars ($40,000,000.00) with\n\nsuch construction commencing on or after July 1, 2005,\n\nand before December 31, 2005, and which at least fifty\n\nnew full-time-equivalent employees, as certified by\n\nthe Oklahoma Employment Security Commission, are added\n\nand maintained for a period of at least thirty-six\n\n(36) months as a direct result of the new or expanded\n\nfacility.\n\nFor purposes of this paragraph, the total cost of construction\n\nshall include building and construction material and engineering and\n\narchitectural fees or charges directly associated with the\n\nconstruction of a new or expanded facility. The total cost of\n\nconstruction shall not include attorney fees. For purposes of\n\nsubparagraph c of this paragraph, the total cost of construction\n\nshall also include the cost of qualified depreciable property as\n\ndefined in Section 2357.4 of this title and labor services performed\n\nin the construction of an expanded facility. For the purpose of\n\nsubparagraph d of this paragraph, the total cost of construction\n\nshall also include the cost of all parking, security and dock\n\nstructures or facilities necessary to manage, process or secure\n\nvehicles used to receive and/or distribute groceries through such a\n\nfacility. The employment requirement of this paragraph can be\n\nsatisfied by the employment of a portion of the required number of\n\nnew full-time-equivalent employees at a manufacturing or\n\ndistribution facility that is related to or supported by the new or\n\nexpanded manufacturing or distribution facility as long as both\n\nfacilities are owned by one person or business entity. For purposes\n\nof this section, \"manufacturing facility\" shall mean building and\n\nland improvements used in manufacturing as defined in Section 1352\n\nof this title and shall also mean building and land improvements\n\nused for the purpose of packing, repackaging, labeling or assembling\n\nfor distribution to market, products at least seventy percent (70%)\n\nof which are made in Oklahoma by the same company but at an off-\n\nsite, in-state manufacturing or distribution facility or facilities.\n\nIt shall not include a retail outlet unless the retail outlet is\n\noperated in conjunction with and on the same site or premises as the\n\nmanufacturing facility. Up to ten percent (10%) of the square feet\n\nof a manufacturing or distribution facility building may be devoted\n\nto office space used to provide clerical support for the\n\nmanufacturing operation. Such ten percent (10%) may be in a\n\nseparate building as long as it is part of the same contiguous tract\n\nof property on which the manufacturing or distribution facility is\n\nlocated. Only sales of tangible personal property made after June\n\n1, 1988, shall be eligible for the exemption provided by this\n\nparagraph. The exemption authorized pursuant to subparagraph d of\n\nthis paragraph shall only become effective when the governing body\n\nof the municipality in which the enterprise is located approves a\n\nresolution expressing the municipality's support for the\n\nconstruction for such new or expanded facility. Upon approval by\n\nthe municipality, the municipality shall forward a copy of such\n\nresolution to the Oklahoma Tax Commission;\n\n8. Sales of tangible personal property purchased and used by a\n\nlicensed radio or television station in broadcasting. This\n\nexemption shall not apply unless such machinery and equipment is\n\nused directly in the manufacturing process, is necessary for the\n\nproper production of a broadcast signal or is such that the failure\n\nof the machinery or equipment to operate would cause broadcasting to\n\ncease. This exemption begins with the equipment used in producing\n\nlive programming or the electronic equipment directly behind the\n\nsatellite receiving dish or antenna, and ends with the transmission\nproper production of a broadcast signal or is such that the failure\n\nof the machinery or equipment to operate would cause broadcasting to\n\ncease. This exemption begins with the equipment used in producing\n\nlive programming or the electronic equipment directly behind the\n\nsatellite receiving dish or antenna, and ends with the transmission\n\nof the broadcast signal from the broadcast antenna system. For\n\npurposes of this paragraph, \"proper production\" shall include, but\n\nnot be limited to, machinery or equipment required by Federal\n\nCommunications Commission rules and regulations;\n\n9. Sales of tangible personal property purchased or used by a\n\nlicensed cable television operator in cablecasting. This exemption\n\nshall not apply unless such machinery and equipment is used directly\n\nin the manufacturing process, is necessary for the proper production\n\nof a cablecast signal or is such that the failure of the machinery\n\nor equipment to operate would cause cablecasting to cease. This\n\nexemption begins with the equipment used in producing local\n\nprogramming or the electronic equipment behind the satellite\n\nreceiving dish, microwave tower or antenna, and ends with the\n\ntransmission of the signal from the cablecast head-end system. For\n\npurposes of this paragraph, \"proper production\" shall include, but\n\nnot be limited to, machinery or equipment required by Federal\n\nCommunications Commission rules and regulations;\n\n10. Sales of packaging materials for use in packing, shipping\n\nor delivering tangible personal property for sale when sold to a\n\nproducer of agricultural products. This exemption shall not apply\n\nto the sale of any packaging material which is ordinarily known as a\n\nreturnable container;\n\n11. Sales of any pattern used in the process of manufacturing\n\niron, steel or other metal castings. The exemption provided by this\n\nparagraph shall be applicable irrespective of ownership of the\n\npattern provided that such pattern is used in the commercial\n\nproduction of metal castings;\n\n12. Deposits or other charges made and which are subsequently\n\nrefunded for returnable cartons, crates, pallets, and containers\n\nused to transport cement and cement products;\n\n13. Beginning January 1, 1998, machinery, electricity, fuels,\n\nexplosives and materials, excluding chemicals, used in the mining of\n\ncoal in this state;\n\n14. Deposits, rent or other charges made for returnable\n\ncartons, crates, pallets, and containers used to transport mushrooms\n\nor mushroom products from a farm for resale to the consumer or\n\nprocessor;\n\n15. Sales of tangible personal property and services used or\n\nconsumed in all phases of the extraction and manufacturing of\n\ncrushed stone and sand, including but not limited to site\n\npreparation, dredging, overburden removal, explosive placement and\n\ndetonation, onsite material hauling and/or transfer, material\n\nwashing, screening and/or crushing, product weighing and site\n\nreclamation;\n\n16. Sale, use or consumption of paper stock and other raw\n\nmaterials which are manufactured into commercial printed material in\n\nthis state primarily for use and delivery outside this state. For\n\nthe purposes of this section, \"commercial printed material\" shall\n\ninclude magazines, catalogs, retail inserts and direct mail; and\n\n17. Beginning on the effective date of this act and ending on\n\nDecember 31, 2029, sales of machinery and equipment, including but\n\nnot limited to, servers and computers, racks, power distribution\n\nunits, cabling, switchgear, transformers, substations, software, and\n\nnetwork equipment, and electricity used for commercial mining of\n\ndigital assets purposes in a colocation facility.\n\nFor purposes of this paragraph:\n\na. \"blockchain technology\" means shared or distributed\n\ndata structures or digital ledgers governed by\n\nconsensus protocols and maintained by peer-to-peer\n\nnetworks that:\nribution\n\nunits, cabling, switchgear, transformers, substations, software, and\n\nnetwork equipment, and electricity used for commercial mining of\n\ndigital assets purposes in a colocation facility.\n\nFor purposes of this paragraph:\n\na. \"blockchain technology\" means shared or distributed\n\ndata structures or digital ledgers governed by\n\nconsensus protocols and maintained by peer-to-peer\n\nnetworks that:\n\n(1) Store digital transactions, and\n\n(2) Verify and secure transactions cryptographically,\n\nb. \"colocation facility\" means a facility or facilities\n\nlocated in this state and utilized in the commercial\n\nmining of digital assets or in hosting persons engaged\n\nin the commercial mining of digital assets through\n\nutilization of the facility's infrastructure,\n\nincluding servers and network hardware powered by\n\nInternet bandwidth, electricity, and other services\n\ngenerally required for such mining operations.\n\nProvided, no facility shall qualify as a \"colocation\n\nfacility\" unless the facility has entered into a load\n\nreduction agreement,\n\nc. \"commercial mining of digital assets\" means the\n\nprocess through which blockchain technology is used to\n\nmine digital assets at a colocation facility,\n\nd. \"digital assets\" means a type of virtual currency that\n\nutilizes blockchain technology and that:\n\n(1) can be digitally traded between users, or\n\n(2) can be converted or exchanged for legal tender,\n\nand\n\ne. \"load reduction agreement\" means an agreement between\n\nthe customer and the local electric cooperative,\n\nmunicipality, electric utility, or market operator\n\nto temporarily reduce or curtail the customer's use of\n\nelectric power in order to respond to inclement\n\nweather or other adverse conditions,\n\nf. \"mine\" or \"mining\" means the process through which\n\nblockchain transactions are verified and accepted by\n\nadding the transactions to a blockchain ledger, which\n\ninvolves solving complex and mathematical\n\ncryptographic problems associated with a block\n\ncontaining transaction data.","path":["OK Code","Title 68"],"source_url":"https://www.oklegislature.gov/OK_Statutes/CompleteTitles/os68.pdf","current_through":"2026-08-14","vintage":"open-us-law v2026.08, retrieved 2026-09-14","retrieved_at":"2026-09-14T18:32:36Z","sha256":"ff0acddfe31fd98bc7d3a881e901d7c04e37e56f1ab1565a52488e47ccaf1f17","source_id":"us-ok","stale":false,"prev":"us-ok/okla.-stat.-tit.-68-68-1358.1","next":"us-ok/okla.-stat.-tit.-68-68-1359.1"},"notice":"GroundRules: Original legal text. Not legal advice."}