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Oklahoma Sales Tax Guide

By Cristina Garza

🆗 Oklahoma, the Sooner state, is known for being part of both the Bible Belt and Tornado Alley. It is the birthplace of American inventions like the parking meter, the aerosol can, and even the shopping cart! Many famous people hail from Oklahoma, including Will Rogers, Ron Howard, and the legendarily meme-worthy Chuck Norris. If you’re one of the lucky small business owners proud to make Oklahoma home, you’ll need to ensure your business complies with Oklahoma's sales tax laws. Fear not! We have assembled this all-in-one guide for sales tax so that you can meet the sales tax compliance requirements for a small business in Oklahoma. 

After reading this guide, you will have learned:

  • How to be prepared for your call with the Oklahoma Tax Commission.
  • How to contact the Oklahoma Tax Commission.
  • When to charge sales tax in Oklahoma.
  • What goods, products, and services are taxable in Oklahoma.
  • When you establish a sales tax nexus with the state of Oklahoma, and the nuances of various thresholds.
  • How to register for a sales tax license in Oklahoma.
  • How to collect sales tax in Oklahoma.
  • How to file and pay sales tax in Oklahoma.

If, after reading, you still have any questions to help you determine your tax sales obligations in Oklahoma and how to fulfill them, we are here for your small business bookkeeping needs! 

 

 


Oklahoma Sales Tax Contacts

Oklahoma Sales Tax Contacts

âś…  Do you need to get in touch with the Oklahoma Tax Commission?

âś…  Are you uncertain about whether to visit, call them, or contact them through their website?  

âś… Do you wonder what information you should have ready before you contact them?

 

If you answered “Yes” to any of these questions, please read onward, as we have just the information you need! :)

The Oklahoma Tax Commission is reachable by phone at 405-521-3160. 

You can also visit one of their two service centers or send a message. If you are hoping for the fastest response, our suggestion is that you call rather than visit in person. 

When you do call the Oklahoma Tax Commission, you will want to have some information on hand. It will save time to have the following information easily accessible before you call: 

  • Taxpayer Name
  • EIN
  • Sales & Use Tax ID Number

If you plan on having a third party contact the NJ DOT on your behalf, you’ll want to be sure to have completed a power of attorney (form bt129, PDF). If you don’t have a completed form they won’t be able to assist someone else on your behalf.

If you have any more questions, please feel free to contact us so we can assist you with your sales tax needs.

 

 


Oklahoma Sales Tax Registration

Oklahoma Sales Tax Registration

 

Are you a new business selling tangible property in Oklahoma? If yes, you are going to want to register your business with the Oklahoma Tax Commission so that you can pay your sales tax on time. 

You need not fret as this is a relatively simple process and one for which you’re about to be fully prepared. We are going to outline the steps below so you are totally ready to register for your sales tax license.

 

Here we go! Remember...

Preparation is key. 

Let’s get started!

 

 

How do I register to collect sales tax in Oklahoma?

You can apply or register for an Oklahoma sales tax permit by visiting the OKTap website and following the instructions provided.

Oklahoma also doesn’t provide an offline way to register a new business. 

 

 

What information do I need to register for an Oklahoma sales tax permit?

Great question!

Before you sign up for Oklahoma sales tax permit you’ll want the following information on hand:

  • Business name
  • Business entity type 
  • Description of business activities
  • Date business activities began or will begin
  • Business address and mailing address
  • Business contact information
  • Associated business entities 
  • NAICS code that best matches the business
  • Federal Employer Identification Number (FEIN)
  • List of business officers, partners, managing members, and/or trustees

Don’t forget! Preparation is key. When you have all this information ready, you can go online and register for your permit at the OKTap website

 

 

How much does it cost to register for an Oklahoma sales tax permit?

Oklahoma charges $20 to register a new business sales tax permit and $10 for additional locations. 

 

 

Do I need a Federal Tax ID Number or EIN to register for an Oklahoma sales tax permit?

Indubitably, yes! You will most assuredly need one, but if you don’t already have one and need to get a new EIN, it’s a painless process. You can register for a Federal EIN right here :). 

 

 

Which agencies in Oklahoma do I need to additionally register with?

You may need to check with some of the following agencies or resources: 

You’ll want to give this some thought and do a little research or investigating; since every business is unique, and there are such different rules, regulations, and laws that may apply. 

We suggest contacting the Oklahoma Tax Commission to verify which additional government agencies you may be required to register with. 

 

*****

 

Huzzah!!!

You are now prepared to register for your Oklahoma sales tax permit in Oklahoma. 

Let’s summarize what we have covered:  

  • Have all the required information easily accessible before registering online.
  • Acquire a tax ID or EIN before registering for an Oklahoma sales tax permit.
  • Register online at the OkTAP website.
  • Look into what other agencies you may have to additionally register with.

Registering for your Oklahoma sales tax permit will be stress free as long as you are prepared. We recommend organizing all the essential information in a folder, preferably using a system like Box.com or Dropbox (something we’re happy to handle for our customers). 

 

 


Oklahoma Sales Tax FAQ

Oklahoma Sales Tax FAQ 

By now, you may have already contacted the Oklahoma Tax Commission and applied for an Oklahoma sales tax permit. 

Once you have a license to collect and remit sales taxes in Oklahoma, you will probably be asking yourself two questions: 

  • When do I charge a sales tax in Oklahoma?
  • What goods and services are subject to sales taxes in Oklahoma? 

We are going to go over some common questions that our clients have asked. We believe these questions will help you appreciate the nuances of taxable goods so you can be confident in fulfilling your tax obligations. 

Let’s start with the first question…

 

 

What goods and services are considered taxable in Oklahoma?

The following items are all taxable in the state of Oklahoma: 

  • Sales of tangible goods at retail.
  • Repairs or alterations of tangible personal property.
  • Property rentals, leases, or licenses [e.g. commercial, mini-warehouse]
  • Selling service warranty contracts.
  • Short-term rentals for living accommodations (e.g. motel/hotel, beach houses, condos, timeshares, vacation homes, or RV homes).
  • Rental/lease of personal goods (e.g.: machinery, vehicles, equipment, or other property).
  • Charges for admission to any place of amusement, sport, or recreation.
  • Manufacturing or producing goods for retail sales.
  • Operating vending machines or amusement rides.
  • Services are mostly exempted 

 

 

The bottom line is …

Your business must pay taxes on sales of any non-exempt goods, and some taxable services.

 

*****

 

Let’s now review some of our clients’ frequently asked questions:

  • Is Oklahoma an Origin or Destination Sales Tax State?
  • What creates a sales tax nexus in Oklahoma?
  • What is the economic threshold in Oklahoma?
  • Does Amazon have fulfillment centers in Oklahoma?
  • Does Oklahoma have a Click-Through Nexus?

To best understand your tax obligations, new businesses need to consider how they are doing business and the type of relationships they have with buyers and any third parties to their transactions. 

 Let’s discuss some questions that will help you understand the nature of your small business and the subsequent tax implications.   

 

 

Is Oklahoma an origin or destination-based sales tax state?

Oklahoma is a Destination-based sales tax state, which simply means you charge sales tax based on the location of the purchaser rather than that of the seller. Local cities, counties, and unincorporated areas may choose to add an additional tax. Oklahoma’s Tax Commission offers a website to check the sales tax rate based on an address.

 

 

What creates sales tax nexus with the state of Oklahoma?  

Having nexus, also known as "sufficient business presence,” with Oklahoma means your business has established a taxing connection with a state. When this happens, you are required to collect and remit sales tax in Oklahoma because you created a sales tax Nexus.

Even if your business maintains its main headquarters in another state, you may still have to charge and pay sales tax to the Oklahoma Tax Commission even if you never step foot in Oklahoma.   

So, how do you create a sales tax Nexus in Oklahoma?

 

A business establishes a nexus in Oklahoma by:

  • having a business location in Oklahoma;
  • having property stored in Oklahoma;
  • employing any person in Oklahoma;
  • contracting with a salesperson or other agent in Oklahoma;
  • leasing equipment used in Oklahoma;
  • performing services in Oklahoma;
  • licensing the use of intangible property in Oklahoma, or transporting property in Oklahoma using the taxpayer’s vehicles.

Let’s talk a bit more specifically about where your goods are stored, such as in the instance of an Amazon warehouse. 

 

 

Does Amazon have fulfillment centers in Oklahoma?

No, Oklahoma has no distribution centers at this time.

This information is relevant for our customers who sell products on Amazon or are recognized as Amazon FBA (Fulfillment by Amazon) sellers. When Amazon stores products in one of its fulfillment centers in any state including, it triggers a sales tax requirement. 

 

 

Does Oklahoma have economic nexus?

Not yet, but coming soon! On May 16th, 2019, the governor of Oklahoma signed SB513 into law. This means that starting November 1st, 2019 certain remote sellers that otherwise lack Nexus in Oklahoma will be required to register. Any company with more than $100,000 in sales into Oklahoma is required to register for a sales tax permit.

 

 

Does Oklahoma have click-through nexus?

Yes! This means if you’re an affiliate sales or third party marketer, you may have a tax liability even if you don’t meet nexus another way. If revenue exceeds $10,000/quarter four quarters in a row, affiliate marketers will need to either register for and pay sales tax, OR send sales information to Oklahoma so they can assess use tax. For more information, OK COT offers this page for remote sellers..

 

 

Is Oklahoma a streamlined sales tax state?

Yep! Since October, 2005 Oklahoma has been a full member of Streamlined Sales Tax.

If you are planning on taking advantage of the Streamlined Sales Tax as a business, it is recommended you use a Certified Service Provider though businesses may opt to register themselves without a CSP. Ultimately the aim of streamlined sales tax is to simplify payment to multiple different states of sales and use tax. It isn’t required that you utilize them, but it can significantly reduce complexity to do so, especially if your business sells in multiple states.

 

 

More effectively manage your tax needs by keeping this guide handy. 

You and your business can be better equipped to avoid situations like paying fines, paying back taxes that you did know you had to pay in the first place, or facing an audit by the tax authorities in Oklahoma.

 

 


Collecting Sales Tax in Oklahoma

Collecting Sales Tax in Oklahoma

By now you know if you are a business that has established a nexus with Oklahoma. So you have an understanding about whether, or when, you are required to collect sales tax. Knowing this is just half the battle! Now, we are going to help you with the next half of the battle: how to navigate the process of collecting taxes.

Let’s review some common questions our clients have asked regarding their Oklahoma Sales Tax obligations. 

  • How do I collect Oklahoma Sales Tax?
  • Who is eligible for Oklahoma Sales Tax exemptions?
  • What should I do if my customer is exempt from sales tax in Oklahoma?
  • What happens if I lose an Oklahoma nontaxable transaction certificate? 

After reading this, you will be better equipped to determine when --and when not-- to collect sales tax in Oklahoma.

 

 

How do I collect Oklahoma Sales Tax?

As we mentioned above, Oklahoma is a Destination-based state. So at the time of transaction, tax should be collected based on the location of the purchaser. Your point-of-sale software should make this relatively simple, including accounting for any local surtaxes

 

 

What are the current Oklahoma Sales Tax rates?   

Oklahoma’s state-wide sales tax rate is 4.5% (since 1990! wow) at the time of this article’s writing, with potential local surtaxes bringing it as high as 11%. Since sales tax rates may change and do vary by location, we shall refer you to check out the Oklahoma Tax Commission tax rate lookup page. Any change will be reflected on that page.

It always helps to be accurate and up to date with this type of information! :) 

 

 

What is exempt from Oklahoma Sales Tax?

What is exempt from sales tax in Oklahoma

 

Here is a sample list of exemptions: 

  • Purchases for resale
  • Everyday clothing items
  • Medical supplies
  • Groceries 

Oklahoma does not have many exemptions beyond the standard ones listed above, but for more specificity they provide this PDF.

 

 

Who are eligible for Oklahoma Sales Tax exemptions?

At this point, you should know what products are exempt from sales tax in Oklahoma. You also want to know who may be exempt. 

Under Oklahoma law, the type of buyer or the way the goods will be used can qualify can buyer for a sales tax exemption. A good example of this is a merchant purchasing goods for resale, aka a wholesaler.

Other common examples of an exempt buyer may include:

  • Government agencies
  • Non-profit organizations
  • Religious groups
  • Out-of-state buyers (should their business not have nexus in their home state).

Note that a non-profit or contractor status doesn’t necessarily immediately confer tax exempt status. 

 

 

What should I do if my customer is exempt from sales tax in Oklahoma?

Purchasers who are tax exempt must have completed resale certificate (PDF) and must present their completed exemption certificate at the time of purchase. It is then incumbent upon the seller to hold on to this exemption certificate. Failure to do so may leave you unable to justify tax exempt sales.

Remember, you always want to collect and file a copy of the exempt certificate. Such certificates must be produced upon request in the event of an audit to justify tax-exempt sales.

 

 

What happens if I lose an Oklahoma Sales Tax exemption certificate?

Hmm... Obviously this issue is best to be avoided! Imagine finding out you’ll be audited and discovering you cannot produce an exemption certificate for a buyer! That nightmare scenario would mean you could be held liable to pay all taxes on behalf of the buyer, plus relevant penalties ($500 per lapse in Oklahoma). This is a bad scene and can be avoided by taking proper care with your paperwork… which happens to be one of our specialties! :) 

 

 

Does Oklahoma have a sales tax holiday?

Yes! Oklahoma has a Back to School Tax Holiday during which clothing items that cost $100 or less are exempt. In 2019, the holiday is from Friday the 2nd to Sunday the 4th.

 

***** 

 

 

We have now covered who you need to collect sales taxes from, how to determine whether goods for sale are deemed taxable, what goods and services fall under tax exemptions, who is eligible for tax exemption certificates, and, finally, the process of collecting sales tax in Oklahoma state. 

Now that we’re this far down the rabbit hole there’s only one thing we need to learn about next… how to pay the piper! 

 

 

Filing and Paying Sales Tax in Oklahoma

Filing and Paying Sales Tax in Oklahoma

 

It is time to talk about filing and paying your sales taxes in Oklahoma. In this section, We are going to cover the following frequently asked questions from our clients:

  • When is Oklahoma Sales Tax due?
  • What are the Oklahoma Sales Tax thresholds?
  • What if an Oklahoma Sales Tax filing date falls on a weekend or holiday?
  • How do I file an Oklahoma Sales Tax Return?
  • How do I correct an Oklahoma Sales Tax return?
  • What happens if I don’t collect sales tax?
  • What happens if I file or pay my sales tax return late?
  • Do I need to file a return if I don’t collect any sales tax in Oklahoma?
  • If I close my business, do I need to file a final sales tax return?
  • Does the Oklahoma Tax Commission offer a discount for filing on time?

By the time you finish reading this, you will feel confident enough to file and pay your Oklahoma Sales Tax.

 

When is Oklahoma sales tax due?

Oklahoma sales tax payments are due based on the filing interval. Filing intervals are based on the company’s tax liability [detailed ahead, be patient! :p] 

The state of Oklahoma requires payment by no later than the 20th of the month following the reporting period

 

 

What are the Oklahoma sales tax filing interval thresholds?

The thresholds for filing intervals are based on the expected or actual tax liability owed:

 

Average Tax Liability Owed Monthly*

Filing interval

From $0 to $83.33

Semi-Annual

More than $84.34

Monthly

 

*anticipated if new business, actual if existing company

 

Not sure how to determine your tax filing frequency?

You can review your eCommerce or Point-of-Sale Software to see the volume of sales you have generated. 

Don't worry though! The state will let you know when your due dates change. :) 

Keep an eye out for notices in your mail from the State of Oklahoma so that you don't miss any shift in deadlines.

 

 

What if an Oklahoma Sales Tax filing date falls on a weekend or holiday?

The deadline is moved to the next business day, typically the Monday following the weekend or the day after the holiday. Where possible, we always suggest filing well before the holiday, of course ;). 

 

 

How do I file an Oklahoma sales tax return?

Paper: Complete form STS20002-A and mail to the address on the form.

Electronic: File online via OkTAP and submit payment via EFT.

  

 

How do I correct an Oklahoma sales tax return?

Paper: Use the same form STS20002-A but check Amended at the top

Electronic: Amend online via OkTAP website. 

 

 

What happens if I don’t collect sales tax?

If you were obligated to collect sales taxes and failed to do so for any reason, that’s a big no-no! Ultimately the business will be held liable for the due tax. Always be sure to collect sales tax at the point of sale. Attempting to collect after the fact will be time consuming and most likely unsuccessful. 

 

 

 

Protip: You are still responsible for remitting sales taxes even if you failed to collect them. 

 

 

 

 

What happens if I file or pay my sales tax return late?

Oklahoma's Department of Taxation charges a penalty of 5% of the tax owed. Additionally, interest of 1.25% will be applied to any outstanding balance.

 

 

Do I need to file a return if I don’t collect any sales tax in Oklahoma?

Yepper! Oklahoma requires businesses file a “Zero-Tax” return even when they have no sales during a taxing period.

 

 

If I close my business, do I need to file a final sales tax return?

Absolutely, Oklahoma requires businesses to file a “Final sales tax” return when closing their doors.

 

 

Does the Oklahoma Tax Commission offer a discount for filing on time?

Yes, and quite a generous one! Oklahoma lets early filers keep 1% of their remittance up to a maximum of $2,500/mo

 

*****

 

Now that we have covered all our bases for filing and paying sales taxes in the state of Oklahoma, you should feel more at ease about the process.

 

Some things to remember:

  • Due dates are important. If anything, file and pay your taxes early.
  • There are three payment plans for filing and paying your sales taxes depending on how much you collect in sales tax on average in a month.
  • You can file and pay your taxes electronically or by mail
  • If you need to amend a return, you may do so electronically or by paper.
  • If you don’t collect sales tax and you were supposed to, you (not the buyer) is liable to pay the sales tax to the state of Oklahoma.
  • You will have to pay late fees if you fail to file your tax return on time and/or if you fail to make your tax payment on time.
  • Even if you collect no sales tax, you still need to file a return.
  • You need to file a “Final sales tax report” when you close your business.

 

Now, you are ready to file and pay your sales tax in Oklahoma. If you have any more questions, feel free to contact us.

  

Click here if you think sales tax is boring. Book a meeting.

 


 

Please note: This blog is for informational purposes only and the information is accurate as of 9/21/2019. If you want legal advice on sales tax law for your business, please contact a Sales Tax professional. Keep in mind that sales tax regulations and laws are subject to change at any time. While we strive to keep our blog current, this blog possibly may be out of date by the time you review it.