Oklahoma’s Nonprofits Sales Tax Exemptions a Crazy Quilt of Illogic

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Crazy-quilt

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February 21, 2016; KGOU-FM (Oklahoma NPR)

In Oklahoma, simply being a nonprofit does not make a group exempt from a 4.5 percent state sales tax. In fact, the tax code relative to the issue is wildly idiosyncratic. That sales tax can go to 10 percent when you add in local levies.

How silly is the landscape? According to Oklahoma Watch:

  • The National Rifle Association is exempt from the sales tax in Oklahoma. The American Civil Liberties Union is not.
  • Organizations promoting the preservation of wild ducks and turkeys get a sales tax break. Groups promoting different wildlife, or the welfare of dogs and cats, do not.
  • Oklahoma chapters of the Daughters of the American Revolution have a specific sales tax exemption. The League of Women Voters of Oklahoma does not.

WildCare Oklahoma has its federal tax exemption but doesn’t get a state sales tax break. Since it spent $200,000 last year on food and supplies, it could certainly found a use for the $10,000 a sales tax exemption would have saved it.

WildCare Director Rondi Large says that because the organization did not specialize in wild ducks and turkeys, it doesn’t qualify for that break. Nor are they included under the general agricultural category, as they do not sell animals.

“Seeing as the wildlife and the birds are all protected, if I sold them, I’d be in jail,” Large said. “Which probably wouldn’t help me—to go to jail but get a sales tax exemption.”

Making things yet more complicated, some nonprofits are only partly exempt. This is the case for Domestic Violence Intervention Services Inc., which pays sales taxes on its office supplies, but materials used in its shelters are tax-free.

David Blatt, executive director of the Oklahoma Policy Institute, says the illogical roster of exemptions reflects numerous pieces of legislation passed one at a time. “It’s hard to identify any rhyme or reason,” said Blatt, “It’s a bit of a hodgepodge, reflecting which legislators may have been on the right committee at the right time and managed to get those through.”—Ruth McCambridge