Oklahoma § 68-500.10 - Exemptions from motor fuels tax

§ 68-500.10. Exemptions from motor fuels tax

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:

Oklahoma Statutes - Title 68. Revenue and Taxation

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

Oklahoma Statutes - Title 68. Revenue and Taxation

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.

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

Oklahoma Statutes - Title 68. Revenue and Taxation

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.

§68-500.10-1. Ethanol credit – Refund claims process.

A. As used in this section:

1. “Ethanol” means a blend of gasoline and ethyl alcohol

consisting of not more than fifteen percent (15%) ethyl alcohol by

volume; and

2. “Retail dealer” means the type of dealer described by

paragraph 53 of Section 500.3 of Title 68 of the Oklahoma Statutes.

B. Unless the federal government mandates the use of

reformulated fuel in an area within the State of Oklahoma in

nonattainment with the National Ambient Air Quality Standards, there

shall be allowed as a credit against the tax levy imposed pursuant

to paragraph 1 of subsection A of Section 500.4 of Title 68 of the

Oklahoma Statutes in the amount of one and six-tenths cents ($0.016)

for each gallon of ethyl alcohol which is contained in ethanol sold

by a retail dealer.

C. Notwithstanding any other provision of the Oklahoma Motor

Fuel Tax Code to the contrary, the retail dealer described by

subsection A of this section may make the claim for refund from the

Oklahoma Tax Commission. The refund claim process for the credit

authorized by this section shall be substantially the same as the

refund claims process authorized by the Motor Fuel Tax Code for

other refunds provided by law.

D. Each claim for refund filed pursuant to this section shall

be accompanied by such documentation as may be required by the Tax

Commission that the retail dealer reduced the retail price for each

gallon of ethyl alcohol which is contained in ethanol sold, and for

which the credit authorized by this section is claimed, by one and

six-tenths cents ($0.016) and that such cost savings was

economically provided to the purchaser of the ethanol fuel.

Added by Laws 2005, c. 294, § 2, eff. Jan. 1, 2006.