Use tax crackdown in Oklahoma
- Sales and Use Tax
- March 23, 2011 | Susan McLain
Oklahoma You Owe
Sales tax is ”a consumption use tax charged at the point of purchase for certain goods or services” (businessweek.com business exchange). A use tax is a type of excise tax levied upon personal property purchased and used by a resident. A use tax applies when sales tax has not been applied.
Use taxes can apply to Internet purchases, purchases made across state or country boundaries and even an item purchased without paying sales tax (such as a resell item) but then consumed and used without reselling. Most states have a use tax law requiring residents and businesses to pay use tax. But up until now, residents were independently responsible to voluntarily report when they are required to pay use tax and remit the payment to their state.
Oklahoma State has a “4.5 percent levy on the purchase price of tangible personal property, including pre-paid transportation, purchased outside Oklahoma and stored, used, or otherwise consumed within the state. Oklahoma sales tax cannot be imposed on a sale which occurred in another state, but the Use Tax applies when the taxable item is brought into Oklahoma for use.”
[Oklahoma Tax Commission]
To battle this, Oklahoma is trying to make itself a use tax friendly state by offering a “use tax amnesty program” to businesses and residents. For retailers who register with the state, the “tax relief is effective as long as the retailer continues registration and collects and remits use taxes for at least 36 months.” This only applies to their liability as a retailer, not as a purchaser. [Sales Tax Institute]
Establishing a “Consumer Compliance Initiative,” the state of Oklahoma encourages consumer purchasers to register as well. Under this initiative, if a taxpayer voluntarily files delinquent returns and pays the outstanding use tax during the initiative, penalties, interest, and other collection fees due will be waived. Use taxes will not be assessed for any period more than one year prior to the date that the taxpayer registers to pay use taxes under the initiative.”