Manufacturers and industrial processors with facilities located in Oklahoma, may be eligible for a utility tax exemption. Oklahoma offers an exemption from state and local sales tax on the purchase of electricity, natural gas, and water used in qualifying production activities. This tax exemption is authorized by OAC 710:65-13-150.1(b).

Exemption Language of OAC 710:65-13-150.1(b)

"Purchases by a manufacturer of tangible personal property or services for use in a manufacturing operation are exempt from sales and use taxes in Oklahoma...Examples of production supplies include items used in the production process, such as... Coal, fuel, oil, electricity, natural gas, artificial gas, steam and refrigeration, when used in the production process or when used to generate power or to create or maintain a temperature necessary for the production process."

Utility Study Requirement for Exemption Qualification

An Oklahoma utility tax study must list every piece of equipment and appliance (production and non-production) that uses the utility and the annual consumption of each. Failure to properly calculate or classify utility usage is cause for denial of the exemption.

Oklahoma Statute of Limitations on Tax Refund

Cannot claim a refund unless taxpayer correctly filled out their Packet M exemption and failed to properly file with the utility provider or the utility provider failed to exempt the account.

State Sales Tax Rate: 4.5%

Average Local Sales Tax Rate: 4.44%

Helpful Resources

Oklahoma Utility Exemption Certificate: Packet M for Oklahoma Manufacturers

Oklahoma Utility Exemption Statute/Rule: OAC 710:65-13-150.1(b)

Oklahoma Claim Form for Tax Refund: Form 13-9 Application for Refund