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New Oklahoma Remote Seller Requirements Effective November 1

published in McAfee & Taft State and Local Taxation Update | November 14, 2019

Effective November 1, 2019, remote sellers no longer have the option to collect and remit Oklahoma tax or report sales information to the Oklahoma Tax Commission. However, SB 513, enacted in May of 2019, raises the annual taxable sales threshold triggering the requirement for remote sellers to collect and remit tax for Oklahoma from $10,000 to $100,000. The threshold applies to sales made during the preceding or current calendar year. The duty to collect and remit the tax applies to the first calendar month after the month the threshold is met. Sales made by a remote seller through a marketplace forum are not included in determining whether the remote seller has met the threshold amount. Remote sellers that do not meet the $100,000 sales threshold are still required to notify purchasers that Oklahoma use tax is due and must be paid by the purchaser, unless otherwise exempt, on items brought into Oklahoma for use or consumption.

Oklahoma law also requires marketplace facilitators with at least $10,000 of sales during the immediately preceding 12-calendar-month period to elect to report and remit Oklahoma tax or comply with the statutory notice and reporting requirements. A marketplace facilitator electing to not collect and remit the tax must submit an annual report to the Tax Commission. The report must include the purchaser’s name, billing address, point of delivery of product in Oklahoma, the aggregate amount of sales to the purchaser, and the name of the remote seller or marketplace facilitator making the sale. If the marketplace facilitator maintains a place of business within Oklahoma, the facilitator is mandated to collect tax on sales made on its behalf and on behalf of any marketplace seller for whom a sale within Oklahoma is facilitated.

A marketplace facilitator that does not collect and remit the tax and fails to comply with the notice and reporting requirements is subject to a penalty in the amount of $20,000 or 20% of total sales in Oklahoma during the previous 12 months, whichever is less. The penalty is to be assessed separately for each violation but may only be assessed once in a calendar year. The Tax Commission has the authority to abate or reduce the penalty upon a showing that the failure was due to hardship or for good cause.