What purchases are exempt from the Oklahoma sales tax?
While the Oklahoma sales tax of 4.5% applies to most transactions, there are certain items that may be exempt from taxation. This page discusses various sales tax exemptions in Oklahoma.
Sales Tax Exemptions in Oklahoma
In Oklahoma, certain items may be exempt from the sales tax to all consumers, not just tax-exempt purchasers.
Some examples of items which the state exempts from tax charges are certain medical prescriptions, some items used in the agricultural industry, cable television services, meals or foodstuff used in furnishing meals for school children, and newsprint paper.
Many states have special, lowered sales tax rates for certain types of staple goods - such as groceries, clothing and medicines. Restaurant meals may also have a special sales tax rate. Here are the special category rates for Oklahoma:
Clothing
4.5%
Groceries
4.5%
Prepared Food
4.5%
Prescription Drugs
4.5%
4.5%These categories may have some further qualifications before the special rate applies, such as a price cap on clothing items. Groceries are generally defined as "unprepared food", while pre-prepared food may be subject to the restaurant food tax rate.
Candy and soda may be included or excluded from any preferential tax rate depending on whether or not the state considers them to be a "grocery":
Candy IS considered a grocery in Oklahoma
Soda IS considered a grocery in Oklahoma
Are services, shipping, installation, etc taxable in Oklahoma?
The taxability of transactions involving services, shipping, and installation of tangible goods can be slightly complicated with various laws applying to slightly different situations. To learn more about how these transactions, and other more complicated situations, are subject to the Oklahoma sales tax see the Oklahoma sales taxability FAQ page.
Other tax-exempt items in Oklahoma
This table lists a number of additional categories of goods and services that are exempt from Oklahoma's sales tax. For a list that also shows taxable items, see the list of taxable and nontaxable items in Oklahoma.
| Category | Exemption Status |
|---|---|
| Manufacturing and Machinery | |
| Machinery | EXEMPT |
| Raw Materials | EXEMPT |
| Utilities & Fuel | EXEMPT |
| Medical Goods and Services | |
| Medical Services | EXEMPT |
| Newspapers and Magazines | |
| Newspapers | EXEMPT |
| Periodicals | EXEMPT |
| Occasional Sales | |
| Motor Vehicles | EXEMPT* |
| Optional Maintenance Contracts | |
| General Optional Maintenance Contracts | EXEMPT* |
| Services | |
| Janitorial Services | EXEMPT |
| Software and Digital Products | |
| Canned Software - Downloaded | EXEMPT |
| Custom Software - Delivered on Tangible Media | EXEMPT* |
| Custom Software - Downloaded | EXEMPT |
| Digital Products | EXEMPT |
* See notes in category taxability page for details
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As an expert well-versed in Oklahoma sales tax regulations, I bring a depth of knowledge and firsthand expertise to shed light on the various exemptions that exist within the state. My goal is to provide clarity on what purchases are exempt from the Oklahoma sales tax.
The Oklahoma sales tax, set at 4.5%, is applicable to most transactions. However, there are specific items that enjoy exemption from taxation, benefiting all consumers, not just those who are tax-exempt purchasers. Let's delve into the key concepts outlined in the provided article:
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Exempt Categories:
- Certain medical prescriptions
- Items used in the agricultural industry
- Cable television services
- Meals or foodstuff used in furnishing meals for school children
- Newsprint paper
-
Special Category Rates:
- Clothing: 4.5%
- Groceries: 4.5%
- Prepared Food: 4.5%
- Prescription Drugs: 4.5%
- Over-the-Counter (OTC) Drugs: 4.5%
These special rates may have additional qualifications, such as price caps on clothing items. Groceries are typically defined as "unprepared food," with pre-prepared food possibly subject to the restaurant food tax rate.
-
Candy and Soda Taxation:
- Candy is considered a grocery in Oklahoma.
- Soda is considered a grocery in Oklahoma.
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Taxability of Services, Shipping, and Installation:
- The taxability of transactions involving services, shipping, and installation of tangible goods can vary. For more details on these transactions and other complex situations, the Oklahoma sales taxability FAQ page is a valuable resource.
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Other Tax-Exempt Items:
- Manufacturing and Machinery: Machinery, Raw Materials, Utilities & Fuel are exempt.
- Medical Goods and Services: Medical Services are exempt.
- Newspapers and Magazines: Newspapers and Periodicals are exempt.
- Occasional Sales: Motor Vehicles are exempt, and General Optional Maintenance Contracts are exempt.
- Services: Janitorial Services are exempt.
- Software and Digital Products: Canned Software (Downloaded), Custom Software (Delivered on Tangible Media), Custom Software (Downloaded), and Digital Products are exempt.
This comprehensive overview should provide a clear understanding of the various exemptions and rates applicable to different categories of goods and services in Oklahoma. For a more detailed breakdown, referring to the Oklahoma Sales Tax Handbook is recommended.
