Tax collection requirements change for remote sellers

Q&A with Tony Mastin

published in The Oklahoman | December 10, 2019

Prior to the U.S. Supreme Court decision in South Dakota v. Wayfair in June 2018, a state could not require remote sellers to collect and remit sales tax on retail items sold to buyers within the state unless the seller had a physical presence in that state. That all changed with the Wayfair decision, and the Oklahoma legislature responded with new legislation that went into effect November 1, 2019.

In a business Q&A with The Oklahoman, tax attorney Tony Mastin explained that while remote sellers are now required to collect and remit tax on sales into the state to the Oklahoma Tax Commission, there are a few exceptions for small sellers.

“Legislation enacted this year provides that sellers with annual taxable sales less than $100,000 are not required to collect the tax,” said Mastin. “The sales threshold is calculated based on 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. Remote sellers that do not meet the $100,000 sales threshold are still required to notify purchasers that Oklahoma tax is due and must be paid by the purchaser on items brought into the state.”

While many other states have enacted similar legislation requiring the collection and remittance of sales tax by remote sellers, the laws vary from state to state as to how the minimum threshold is calculated for small sellers, and one state — Kansas — offers no exception for small sellers, said Mastin. As a result, remote sellers should familiarize themselves with the various state laws and the penalties associated with non-compliance.

Mastin said state legislation also addresses sales made by remote sellers using online marketplace forums, such as eBay, Etsy or Amazon.