§ 68-500.10 — Exemptions from motor fuels tax.

Oklahoma § 68-500.10

• Jurisdiction: Oklahoma
• Title 68: Revenue And Taxation

Text

Subject to the procedural requirements and conditions set out in this section and Sections 500.11 through 500.17 of this title, the following are exempt from the taxes on motor fuel imposed by Section 500.4 of this title and Section 500.4b of this title: 1. Motor fuel for which proof of export is available in the form of a terminal-issued destination state shipping paper: a. exported by a supplier who is licensed in the destination state, or b. sold by a supplier to a licensed exporter for immediate export; 2. Motor fuel which was acquired by an unlicensed exporter and as to which the tax imposed by Section 500.4 of this title has previously been paid or accrued and was subsequently exported by transport truck by or on behalf of the licensed exporter in a diversion across state boundaries properly reported in conformity with Section 500.46 of this title; 3. Motor fuel exported out of a bulk plant in this state in a tank wagon if the destination of that vehicle does not exceed twenty-five (25) miles from the border of this state and as to which the tax imposed by Section 500.4 of this title has previously been paid or accrued, subject to gallonage limits and other conditions established by the Oklahoma Tax Commission; 4. K-1 kerosene sold at retail through dispensers which have been designed and constructed to prevent delivery directly from the dispenser into a vehicle fuel supply tank, and K-1 kerosene sold at retail through nonbarricaded dispensers in quantities of not more than twenty-one (21) gallons for use other than for highway purposes, under such rules as the Tax Commission shall reasonably require; 5. Motor fuel sold to the United States or any agency or instrumentality thereof; 6. Motor fuel used solely and exclusively in district-owned public school vehicles or FFA and 4-H Club trucks for the purpose of legally transporting public school children, and motor fuel purchased by any school district for use exclusively in school buses leased or hired for the purpose of legally transporting public school children, or in the operation of vehicles used in driver training; 7. Motor fuel used solely and exclusively as fuel to propel motor vehicles on the public roads and highways of this state, when leased or owned and being operated for the sole benefit of a county, city, town, a volunteer fire department with a state certification and rating, rural electric cooperatives, rural water and sewer districts, rural irrigation districts organized under the Oklahoma Irrigation District Act, conservancy districts and master conservancy districts organized under the Conservancy Act of Oklahoma, rural ambulance service districts, ambulance districts established under Section 9C of Article X of the Oklahoma Constitution, or federally recognized Indian tribes; 8. Motor fuel used as fuel for farm tractors or stationary engines owned or leased and operated by any person and used exclusively for agricultural purposes, except as to two and eight one-hundredths cents ($0.0208) per gallon of gasoline as provided in subsection C of Section 500.4 of this title; 9. Gasoline, diesel fuel and kerosene sold for use as fuel to generate power in aircraft engines, whether in aircraft or for training, testing or research purposes of aircraft engines, except as to eight one-hundredths of one cent ($0.0008) per gallon as provided in subsection B of Section 500.4 of this title; 10. Motor fuel sold within an Indian reservation or within Indian country by a federally recognized Indian tribe to a member of that tribe and used in motor vehicles owned by that member of the tribe. This exemption does not apply to sales within an Indian reservation or within Indian country by a federally recognized Indian tribe to non-Indian consumers or to Indian consumers who are not members of the tribe selling the motor fuel; 11. Subject to determination by the Tax Commission, that portion of diesel fuel: a. used to operate equipment attached to a motor vehicle, if the diesel fuel was placed into the fuel supply tank of a motor vehicle that has a common fuel reservoir for travel on a highway and for the operation of equipment, or b. consumed by the vehicle while the vehicle is parked off the highways of this state; 12. Motor fuel acquired by a consumer out of state and carried into this state, retained within and consumed from the same vehicle fuel supply tank within which it was imported; 13. Diesel fuel used as heating oil, or in railroad locomotives or any other motorized flanged-wheel rail equipment, or used for other nonhighway purposes other than as expressly exempted under another provision; 14. Motor fuel which was lost or destroyed as a direct result of a sudden and unexpected casualty; 15. Taxable diesel which had been accidentally contaminated by dye so as to be unsaleable as highway fuel as proved by proper documentation; 16. Dyed diesel fuel; 17. Motor fuel sold to the Oklahoma Space Industry Development Authority or any spaceport user as defined in the Oklahoma Space Industry Development Act; and 18. Biofuels or biodiesel produced by an individual with crops grown on property owned by the same individual and used in a vehicle owned by the same individual on the public roads and highways of this state.

Legislative History

Added by Laws 1996, c. 345, § 10, eff. Oct. 1, 1996. Amended by Laws 1999, c. 164, § 38, eff. July 1, 1999; Laws 2007, c. 267, § 2, eff. Jan. 1, 2008; Laws 2009, c. 426, § 7, eff. July 1, 2009; Laws 2018, 2nd Ex. Sess., c. 11, § 1; Laws 2024, c. 292, § 1, eff. Nov. 1, 2024. NOTE: Sections 2 and 3 of House Bill No. 1015 of the 2nd Extraordinary Session of the 56th Oklahoma Legislature state that this section shall become effective upon the date the provisions of House Bill No. 1010 of the 2nd Extraordinary Session of the 56th Oklahoma Legislature become effective, and is contingent upon enactment of that bill. House Bill No. 1010 was signed by the Governor on March 29, 2018.