Help Center: Exemptions

Persons who have been certified as receiving compensation at the 100% rate where disability is permanent and where it is service connected as certified by the United States Department of Veterans Affairs are eligible for the exemption. Sales qualifying for the exemption are limited to $25,000.00 per year.

The exemption for the 100% disabled veterans extends to the surviving spouse of a deceased qualified veteran if the surviving spouse has not remarried. Sales qualifying for the exemption are limited to $1000.00 per year for the surviving spouse.

100% Disabled American Veterans are exempt from sales and use tax ONLY. As well as an additional break on excise tax on vehicle purchases. Cigarettes and tobacco tax is not considered sales tax and therefore is not exempt for DAV’s. Sales tax on prepackaged alcohol purchases is tax exempt for DAV’s. However, if a DAV purchases liquor by the drink, the mixed beverage tax is still applied but the DAV is not charged sales tax. Gasoline taxes are not considered sales tax, so DAV’s are not exempt from paying gasoline tax.

100% Percent Disabled Veterans can apply for sales and use tax exemption online. A 100% disabled veteran from service-related injuries must provide the letter from the United States Department of Veterans Affairs, Muskogee, OK certifying that the applicant is a qualifying veteran. Contact the Oklahoma Department of Veteran's Affairs at 1-888-655-2838 for assistance with this Oklahoma benefit. This letter is specifically for this Oklahoma benefit.

A disabled veteran is exempt from sales tax; however, they are not exempt from the medical marijuana excise tax of 7%.

Yes, the spouse or member of the veteran's household may make purchases on the veteran's behalf.

Qualified 100% disabled veterans may obtain an additional card for a household member who is authorized to make purchases on their behalf. An authorized household member includes a qualified veteran’s spouse or other person residing with the qualified veteran. To obtain a card, visit OkTAP. Sales qualifying for exemption are limited to $1,000 per year for a qualifying un-remarried surviving spouse.

To receive an exemption card, the applicant must provide to the Taxpayer Resource Center, Oklahoma Tax Commission, a letter from the U.S. Department of Veterans Affairs that applicant is the surviving spouse of a deceased veteran who was determined by the VA prior to his/her death to be honorably discharged, 100% service-connected, permanent and total disabled. You should contact the Oklahoma Department of Veteran's Affairs at 1-888-655-2838 for assistance with this Oklahoma benefit.

Yes, if taxes were paid after the effective date on your exemption card and the receipt date is not over two years prior to the refund request and the veteran has a tax exemption card. A refund will not be made if the receipt date is more than two years old or if the receipt date is prior to the effective date on your exemption card. The exemption limit for the DAV is $25,000.00 in taxable sales each year. The exemption limit for the un-remarried surviving spouse of the DAV is $1,000.00 in taxable sales each year.

You can download the Application Form 13-9 on the Forms page. Vendors are required to accept the DAV exemption card.

If a vendor chooses not to accept the card, they could face a $500 fine.

If you have been denied the exemption, you must use a Disabled American Veterans Notification of Denial of Exemption Form 13-37 to notify the Oklahoma Tax Commission of the offense.

Effective November 1, 2021, the OTC will only accept a claim for a refund of sales tax already paid if the vendor refused to honor the DAV exemption card. In this case, the person eligible for the exemption should submit to the OTC a signed Form 13-37.

An Oklahoma resident who is a member of any component of the Armed Services may exclude 100% of his/her taxable active-duty military pay. This includes Reserve and National Guard pay. (Form 511, Schedule 511-C or Form 511NR, Schedule 511NR-C)

Note: Any individual who is retired from any component of the Armed Forces may exclude the greater of $10,000 or 75% of their retirement income. (Form 511, Schedule 511-A or Form 511NR, Schedule 511NR-B). For current Oklahoma tax forms, visit the Forms page.

Yes, as an Oklahoma resident, you are required to file an Oklahoma return, and be taxed on any income from interest, dividends, salaries, commissions and other pay for personal services regardless of where you are stationed.

Whenever the filing of a timely income tax return by a member of the Armed Forces of the US is made impracticable or impossible of accomplishment by reason of absence from the State of Oklahoma while on active duty or confinement in a hospital, the time of filing a return and paying an income tax shall be extended to the fifteenth day of the third month following the month in which such individual returns to Oklahoma or is discharged from the hospital.

Whenever the filing of a timely income tax return by a member of the Armed Forces of the US is made impracticable or impossible of accomplishment by reason of absence from the State of Oklahoma while on active duty or confinement in a hospital, the time of filing a return and paying an income tax shall be extended to the fifteenth day of the third month following the month in which such individual returns to Oklahoma or is discharged from the hospital.

Every nonresident with gross income from Oklahoma sources of $1,000 or more is required to file an Oklahoma income tax return.

Sources of Oklahoma income are:

• Salaries, wages and commissions for work performed in Oklahoma. This does not include non-resident military wages
• Income from an unincorporated business activity conducted in Oklahoma
• Distributive share of the Oklahoma part of partnership income, gains, losses or deductions
• Distributive share from Subchapter S Corporations doing business in Oklahoma
• Net rents and royalties from real and tangible personal property located in Oklahoma
• Gains from the sales or exchanges of real property, located in Oklahoma
• Income received from all sources of wagering, games of chance or any other winnings from sources within Oklahoma. Proceeds which are not money will be taken into account at their fair market value

When the spouse of a military member is a civilian, most states, Oklahoma included, allow the spouse to retain the same legal residency as the military member. They file a joint resident tax return in the military member’s State of Legal Residency (if required) and are taxed jointly under nonresident rules as they move from state to state. If the nonmilitary spouse does not wish to retain the allowed residency of the military member, then the same residency rules apply as would apply to any other civilian. The spouse would then comply with all residency rules where living.

You will file a joint Oklahoma return, using Form 511NR to allocate the Federal income between Oklahoma and the other state.

The Form 511-NR computes Oklahoma taxable income "as if" all the income were earned in Oklahoma. In most cases, a base tax would have been computed using all of your income, both you and your spouse’s. However, your spouse’s military wages are protected under the Soldiers’ and Sailors’ Relief Act. This Act provides that only the military member’s state of residence can tax his/her military wages. Therefore, your spouse’s nonresident military wages are subtracted so they are not included in taxable income and not used to compute the base tax. The rest of your spouse’s income is not protected and therefore is used to compute the base tax.

Since all of your income was not earned in Oklahoma, we cannot collect all of the base tax. The base tax is prorated using a percentage of the AGI from Oklahoma sources divided by the AGI from all sources. The result is your Oklahoma income tax, which is the tax attributable to Oklahoma source income. For current Oklahoma tax forms, visit the Forms page.

You have two options for filing your Oklahoma return(s).

1. File Oklahoma married filing separate. The resident will file on Form 511 using the married filing separate rates and reporting only his/her income and deductions. If the nonresident civilian spouse also has an Oklahoma filing requirement, he/she will file on Form 511NR, using married filing separate rates and reporting his/her income and deductions. Form 574 "Allocation of Income and Deductions" must be filed with the return(s).
2. File as if both, you and your spouse, were Oklahoma residents. Use the "married filing joint" filing status and report all income of both spouses. A tax credit (Oklahoma Form 511TX) may be used to claim credit for taxes paid to the other state. A statement should be enclosed to the return stating the nonresident is filing as a resident for tax purposes only.

The data file must include all exemptions taken on the return requested. In situations where no permit number is available:

• Services should be listed and described in column E.
• If a sale was made to a contractor, acting as an agent for an exempt group under Rule 710:65-7-13 & 710:65-19-56, the name of the contractor is to be listed in column E and the name of the exempt group is to be listed in column F.
• Items coded as W “Other Legal Sales Tax Exemptions”, a description of the item or name of group should be listed in column E.
• Items listed under cigarettes, gasoline, food stamps, newspapers, coin operated devices, motor vehicle, returned merchandise or sales tax holiday can be lump sum amounts for each of the individual exemption types and do not have to be listed per transaction or customer.

These codes are based on the type of exemption you are claiming and match the sales tax report filed with the OTC. Services include items such as labor and shipping. Other legal sales tax exemptions may include items such as damage waiver fees. A full list of these codes is on the OkTAP sales tax report under “exemptions”.

You can type in “Letter” for any church, Oklahoma school, or Oklahoma government that provides you only with a letter from the OTC stating they are an exempt organization.

If the sale is made to an out of state company purchasing an item for resale and having the item drop shipped to a customer in Oklahoma, the sale should be listed as “I–out of state” and in place of the permit number, type “drop shipment” in column C. The city and state will be the location in Oklahoma the item was drop shipped.

Sales tax codes are four-digit codes assigned to cities and counties in Oklahoma. If a sale is outside of city limits, the county code should be used. Out-of-state city\states will use the code 8001.

• Rate Charts, Changes and Codes

Line items with an exemption code of “V” need to have a description of the type of service provided entered into column E where you enter the company name.

Line items with an exemption code of “W” that are not to people holding permit numbers will need to have the name of the group, if applicable, or a description of the type of item exempted entered into column E where you enter the company name.

You can combine multiple sales to one customer if all sales are made in the same city, under the same exemption permit. If the sales are not in the same city, you will need to split the sales up so that the correct city is reflected for each group of transactions for that customer. Do not combine sales from different customers.

• Select your STS or SVU account. If you have multiple accounts, you will need to select the specific account and period referenced in the letter you received.
• Select the period for which the data file has been requested.
• Click on “I Want To”.
• Click on “Import Sales Tax Exemption File”.
• Click “Browse”, locate the data file on your computer, select the file and click “Save”.
• Click “Submit”.

Chapter 65 Sales and Use Tax Rules can be found here. You may also find Packet E Oklahoma Sales Tax Exemption Packet useful. For current Oklahoma tax forms, visit the Forms page.

A sales tax permit lookup is available through OkTAP in the “Resources\Searches” section. Searches can be performed on the old 6 digit permits and the current EXM and STS permits.