STATE OF OKLAHOMA

1st Session of the 52nd Legislature (2009)

SENATE BILL 42	By:	Gumm

AS INTRODUCED

An Act relating to revenue and taxation; amending 68 O.S. 2001, Sections 1353, as last amended by Section 8, Chapter 278, O.S.L. 2008 and 2701, as last amended by Section 6, Chapter 136, O.S.L. 2007 (68 O.S. Supp. 2008, Sections 1353 and 2701), which relate to sales tax; providing for certain apportionment of sales tax to certain municipalities, counties and authorities under specified circumstances; exempting the sale of eligible food and beverages from state sales tax; requiring the Oklahoma Tax Commission to promulgate rules; exempting the sale of eligible food and beverages from county or authority sales tax; exempting the sale of eligible food and beverages from local sales tax; providing for codification; and providing an effective date.

BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
SECTION 1.     AMENDATORY     68 O.S. 2001, Section 1353, as last amended by Section 8, Chapter 278, O.S.L. 2008 (68 O.S. Supp. 2008, Section 1353), is amended to read as follows:
Section 1353.  A.  It is hereby declared to be the purpose of the Oklahoma Sales Tax Code to provide funds for the financing of the program provided for by the Oklahoma Social Security Act and to provide revenues for the support of the functions of the state government of Oklahoma, and for this purpose it is hereby expressly provided that, revenues derived pursuant to the provisions of the Oklahoma Sales Tax Code, subject to the apportionment requirements for the Oklahoma Tax Commission and Office of State Finance Joint Computer Enhancement Fund provided by Section 6 265 of this act title, shall be apportioned as follows:
1.	a.	the following amounts shall be paid to the State Treasurer to be placed to the credit of the General Revenue Fund to be paid out pursuant to direct appropriation by the Legislature:
Fiscal Year	Amount
FY 2003 and FY 2004	86.04%
FY 2005	85.83%
FY 2006	85.54%
FY 2007	85.04%
FY 2008 and each fiscal year thereafter	83.61%
b.	in the event that additional monies are necessary pursuant to paragraph 5 of this section subsection, such additional monies shall be deducted in the proportion determined by the State Board of Equalization pursuant to paragraph 3 of Section 2355.1B of this title from the monies apportioned to the General Revenue Fund;
2.  For FY 2003, FY 2004 and FY 2005, ten and forty-two one-hundredths percent (10.42%), shall be paid to the State Treasurer to be placed to the credit of the Education Reform Revolving Fund of the State Department of Education and for FY 2006 and each fiscal year thereafter, ten and forty-six one-hundredths percent (10.46%) shall be paid to the State Treasurer to be placed to the credit of the Education Reform Revolving Fund of the State Department of Education;
3.  The following amounts shall be paid to the State Treasurer to be placed to the credit of the Teachers’ Retirement System Dedicated Revenue Revolving Fund:
Fiscal Year	Amount
FY 2003 and FY 2004	3.54%
FY 2005	3.75%
FY 2006	4.0%
FY 2007	4.5%
FY 2008 and each fiscal year thereafter	5.0%
4.  For the fiscal year beginning July 1, 2007, and for each fiscal year thereafter, ninety-three one-hundredths percent (0.93%) shall be paid to the State Treasurer to be further apportioned as follows:
a.	thirty-six percent (36%) shall be placed to the credit of the Oklahoma Tourism Promotion Revolving Fund, and
b.	sixty-four percent (64%) shall be placed to the credit of the Oklahoma Tourism Capital Improvement Revolving Fund; and
5.  During the first fiscal year after the State Board of Equalization has made a determination as provided in Section 2355.1B of this title, regarding a baseline amount of revenue apportioned pursuant to paragraph 3 of this section subsection, and for each fiscal year thereafter, in no event shall monies apportioned pursuant to paragraph 3 of this section subsection, paragraph 3 of Section 1403 of this title and subparagraph c of paragraph 1 of Section 2352 of this title be less than such baseline amount.
B.  Provided, for the fiscal year beginning July 1, 2007, and every fiscal year thereafter, an amount of revenue shall be apportioned to each municipality or county which levies a sales tax subject to the provisions of Section 1357.10 of this title and subsection F of Section 2701 of this title equal to the amount of sales tax revenue of such municipality or county exempted by the provisions of Section 1357.10 of this title and subsection F of Section 2701 of this title.  The Oklahoma Tax Commission shall promulgate and adopt rules necessary to implement the provisions of this subsection.
C.  Provided, for the fiscal year beginning July 1, 2009, and every fiscal year thereafter, an amount of revenue shall be apportioned to each municipality, county or authority which levies a sales tax subject to the provisions of Section 2 of this act equal to the amount of sales tax revenue of such municipality, county or authority exempted by the provisions of Section 2 of this act.  The Tax Commission shall promulgate and adopt rules necessary to implement the provisions of this subsection.
SECTION 2.     NEW LAW     A new section of law to be codified in the Oklahoma Statutes as Section 1357.11 of Title 68, unless there is created a duplication in numbering, reads as follows:
A.  The sale of all eligible food and beverages as defined in the Streamlined Sales and Use Tax Agreement shall be exempt from the tax imposed by Section 1354 of Title 68 of the Oklahoma Statutes.
B.  The Oklahoma Tax Commission shall promulgate any necessary rules to implement the provisions of this act, including a rule defining eligible food and beverages in accordance with the Streamlined Sales and Use Tax Agreement.
SECTION 3.     NEW LAW     A new section of law to be codified in the Oklahoma Statutes as Section 1378 of Title 68, unless there is created a duplication in numbering, reads as follows:
The sales tax imposed by any county or authority authorized by law to levy a sales tax shall not be imposed upon the sale of any eligible food and beverages as defined in the Streamlined Sales and Use Tax Agreement in accordance with Section 2 of this act.
SECTION 4.     AMENDATORY     68 O.S. 2001, Section 2701, as last amended by Section 6, Chapter 136, O.S.L. 2007 (68 O.S. Supp. 2008, Section 2701), is amended to read as follows:
Section 2701.  A.  Any incorporated city or town in this state is hereby authorized to assess, levy, and collect taxes for general and special purposes of municipal government as the Legislature may levy and collect for purposes of state government, subject to the provisions of subsection subsections F and G of this section, except ad valorem property taxes.  Provided:
1.  Taxes shall be uniform upon the same class subjects, and any tax, charge, or fee levied upon or measured by income or receipts from the sale of products or services shall be uniform upon all classes of taxpayers;
2.  Motor vehicles may be taxed by the city or town only when such vehicles are primarily used or located in such city or town for a period of time longer than six (6) months of a taxable year;
3.  The provisions of this section shall not be construed to authorize imposition of any tax upon persons, firms, or corporations exempted from other taxation under the provisions of Sections 348.1, 624 and 321 of Title 36 of the Oklahoma Statutes, by reason of payment of taxes imposed under such sections;
4.  Cooperatives and communications companies are hereby authorized to pass on to their subscribers in the incorporated city or town involved, the amount of any special municipal fee, charge or tax hereafter assessed or levied on or collected from such cooperatives or communications companies;
5.  No earnings, payroll or income taxes may be levied on nonresidents of the cities or towns levying such tax;
6.  The governing body of any city or town shall be prohibited from proposing taxing ordinances more often than three times in any calendar year, or twice in any six-month period; and
7.  Any revenues derived from a tax authorized by this subsection not dedicated to a limited purpose shall be deposited in the municipal general fund.
B.  A sales tax authorized in subsection A of this section may be levied for limited purposes specified in the ordinance levying the tax.  Such ordinance shall be submitted to the voters for approval as provided in Section 2705 of this title.  Any sales tax levied or any change in the rate of a sales tax levied pursuant to the provisions of this section shall become effective on the first day of the calendar quarter following approval by the voters of the city or town unless another effective date, which shall also be on the first day of a calendar quarter, is specified in the ordinance levying the sales tax or changing the rate of sales tax.  Such ordinance shall describe with specificity the projects or expenditures for which the limited-purpose tax levy would be made.  The municipal governing body shall create a limited-purpose fund and deposit therein any revenue generated by any tax levied pursuant to this subsection.  Money in the fund shall be accumulated from year to year.  The fund shall be placed in an insured interest-bearing account and the interest which accrues on the fund shall be retained in the fund.  The fund shall be nonfiscal and shall not be considered in computing any levy when the municipality makes its estimate to the excise board for needed appropriations.  Money in the limited-purpose tax fund shall be expended only as accumulated and only for the purposes specifically described in the taxing ordinance as approved by the voters.
C.  The Oklahoma Tax Commission shall give notice to all vendors of a rate change at least sixty (60) days prior to the effective date of the rate change.  Provided, for purchases from printed catalogs wherein the purchaser computed the tax based upon local tax rates published in the catalog, the rate change shall not be effective until the first day of a calendar quarter after a minimum of one hundred twenty (120) days’ notice to vendors.  Failure to give notice as required by this section shall delay the effective date of the rate change to the first day of the next calendar quarter.
D.  The change in the boundary of a municipality shall be effective, for sales and use tax purposes only, on the first day of a calendar quarter after a minimum of sixty (60) days’ notice to vendors.
E.  If the proceeds of any sales tax levied by a municipality pursuant to subsection B of this section are being used by the municipality for the purpose of retiring indebtedness incurred by the municipality or by a public trust of which the municipality is a beneficiary for the specific purpose for which the sales tax was imposed, the sales tax shall not be repealed until such time as the indebtedness is retired.  However, in no event shall the life of the tax be extended beyond the duration approved by the voters of the municipality.  The provisions of this subsection shall apply to all sales tax levies imposed by a municipality and being used by the municipality for the purposes set forth in this subsection prior to or after July 1, 1995.
F.  The sale of an article of clothing or footwear designed to be worn on or about the human body shall be exempt from the sales tax imposed by any incorporated city or town, in accordance with and to the extent set forth in Section 3 of this act 1357.10 of this title.
G.  The sale of all eligible food and beverages as defined in the Streamlined Sales and Use Tax Agreement shall be exempt from the tax imposed by any incorporated city or town, in accordance with Section 2 of this act.
SECTION 2.  This act shall become effective November 1, 2009.

52-1-172	JCR	12/15/2008 10:55:23 AM