Oklahoma Sales Tax Rates

Total Range for 2024

4.5%–11.5%

oklahoma tax commission

Nexus in Oklahoma

Similar to other states, Oklahoma has two main ways to establish nexus, which triggers the obligation for a business to collect and remit sales tax: physical nexus and economic nexus.

Physical Nexus:

A business has physical nexus in Oklahoma if it has a physical presence in the state. This includes, but is not limited to:

  • Maintaining an office, warehouse, or store in Oklahoma
  • Having employees, representatives, or agents soliciting sales in Oklahoma on your behalf
  • Owning or leasing tangible personal property in Oklahoma (with some exceptions)

Economic Nexus: Even without a physical presence, a business can still have nexus in Oklahoma if it meets the state’s economic nexus thresholds. Oklahoma follows a destination-based sourcing rule, meaning sales tax is applied based on the customer’s location, not the seller’s location.

Effective November 1, 2019, Oklahoma considers a seller to have economic nexus if they have at least $100,000 in aggregate sales of tangible personal property delivered to locations within the state during the current or preceding calendar year.

Important Notes:

  • Gross receipts used to determine economic nexus include both taxable and non-taxable sales.
  • If a business meets the economic nexus thresholds, it must register for a sales tax permit and start collecting sales tax from Oklahoma customers on the very next sale.

Understanding your nexus in Oklahoma is crucial to determine your sales tax collection obligations.  If you’re unsure whether your business has nexus in Oklahoma, it’s always best to consult with a tax professional like Yonda Tax for guidance.

Is what you’re selling taxable in Oklahoma?

In Oklahoma applies sales tax to most tangible personal property, some specified digital products, and certain services. Here’s a breakdown to help you determine if your product or service is taxable:

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How to Register for Sales Tax in Oklahoma

If you’ve determined you need to collect sales tax in Oklahoma, registering for a Sales Tax Permit is the next step. Here’s how you can do it:

  1. Online Registration:

The Oklahoma Tax Commission (OTC) offers online registration through their Oklahoma Taxpayer Access Center (OTAC) system. This is generally the fastest and most convenient method. Here’s what you’ll need:

  • Business Information:
    • Business name and address
    • Contact information (phone number and email)
  • Federal Tax ID:
    • Federal Employer Identification Number (EIN)
  • Business Activity:
    • Business activity start date
  • Sales Information:
    • Projected monthly sales and taxable sales
    • Products or services offered
  1. Mail-in Registration:

If online registration isn’t an option, you can also register by mail using an application form (Sales and Use Tax Application – Form OSS).

  • Download the Oklahoma Sales and Use Tax Application (Form OSS) from the Tax Commission website.
  • Complete the form following the instructions provided. The form will ask for the same information required for online registration.
  • Mail the completed application form along with any required documentation (such as a copy of your EIN paperwork) to the address listed on the form.

Whichever method you choose, make sure to have all the necessary information readily available to ensure a smooth registration process.

Additional Notes:

  • You may be required to file a surety bond along with your application, depending on your business type and projected sales tax liability. The OTC website has information on surety bond requirements ([invalid URL removed]).
  • Once your application is approved, you’ll receive a Sales Tax Permit with your permit number. You’ll need this number to collect and report sales tax.

For more detailed information and specific instructions, visit the Oklahoma Tax Commission website or contact them directly.

How to Collect Sales Tax in Oklahoma

Once you’ve registered for a Sales Tax Permit and received your permit number in Oklahoma, here’s what you need to know about collecting sales tax:

  1. Determine the Tax Rate:

The sales tax rate in Oklahoma is a combination of a statewide base rate and potential additional local rates.  The base rate is currently 4.5%. However, many cities and counties in Oklahoma impose additional local sales taxes on top of the base rate.

You can find the specific sales tax rate for the location where your business is located or where you’re delivering goods/services by using the Oklahoma Tax Commission’s Sales and Use Tax Rate Lookup tool.

  1. Apply the Tax Rate:

Once you know the applicable tax rate (statewide base rate + any local rates), simply add it to the taxable sales price of your goods or services to determine the amount of sales tax to collect from the customer.

  • Example: If you sell a product for $100 in a location with a combined sales tax rate of 8.5% (4.5% base rate + 4% local rate), the sales tax amount would be $8.50 (100 x 8.5%). You would collect $108.50 ($100 + $8.50) from the customer.
  1. Keep Good Records:

It’s crucial to maintain accurate records of your sales and sales tax collected. These records are essential for filing sales tax returns and during any potential audits by the Oklahoma Tax Commission. Your records should include:

  • Sales receipts
  • Tax rates applied
  • Amount of sales tax collected for each transaction
  • Details of exempt sales
  1. Report and Remit Sales Tax:

Oklahoma businesses are required to file sales tax returns and remit the collected tax on a regular basis. The specific filing frequency depends on your business’s total sales tax liability.

  • Generally, businesses with lower sales tax liability will file quarterly, while those with higher liability may need to file monthly.
  • You can find detailed information on sales tax filing deadlines and remittance procedures on the Oklahoma Tax Commission website ([invalid URL removed]) or by contacting them directly.

Additional Tips:

  • Consider using sales tax software: Sales tax software can automate calculations, filing, and remittance, saving you time and ensuring accuracy.
  • Stay informed: Sales tax laws and regulations can change, so stay updated on any changes that might affect your business, particularly regarding local tax rates.
  • Clearly display the sales tax: It’s a good practice to clearly display the sales tax amount on receipts or invoices to avoid confusion for your customers.

FAQs

How often do you need to file sales tax returns in Oklahoma?

The frequency of filing sales tax returns in Oklahoma depends on your business’s total sales tax liability. The Oklahoma Tax Commission will assign you a filing frequency when you register for your Sales Tax Permit:

  • Typically:
    • Businesses with low sales tax liability (under a certain threshold) will file quarterly.
    • Businesses with moderate liability may file monthly.
    • Businesses with high liability may be required to file more frequently, potentially including prepayments.

The exact thresholds and filing requirements can change, so it’s best to consult the Tax Commission website or contact them directly for the latest information.

Do you need a seller/reseller permit?

In Oklahoma, a seller’s permit is called a Sales Tax Permit. Yes, you’ll need to register for a Sales Tax Permit to collect sales tax in Oklahoma. You can find instructions on registering for a Sales Tax Permit in the “How to Register for Sales Tax in Oklahoma” section above.

When are Oklahoma's Returns Due?

Sales tax return deadlines in Oklahoma depend on your assigned filing frequency (monthly or quarterly) and the last day of the month your permit became effective.

You can find a detailed breakdown of filing deadlines based on your filing frequency and registration month on the Tax Commission website.

Are there any exceptions to the sales tax on digital products?

There are limited exceptions for certain digital products in Oklahoma. Here’s a quick breakdown:

  • Taxable: Downloaded digital products like ebooks, audiobooks, and music downloads purchased for personal use are subject to sales tax in Oklahoma.
  • Non-Taxable: Services related to digital products, like separately charged subscriptions to streaming services or online gaming platforms, may not be taxable.

Contact Yonda Tax Today

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