Any business selling certain goods or services in Oklahoma needs to obtain a sales tax permit from the state’s tax commission. Having a sales tax permit authorizes you to collect sales tax on transactions made in Oklahoma, and most sellers conducting business in the state will need one, even if based in another state and making sales to Oklahomans over the internet. In this post, we’ll catch you up with everything you need to know about Oklahoma sales tax permits.
We’d like to give a big thank you to Randall, owner of The Last Stop Shop in Tulsa, for inspiring this blog topic!
What is an Oklahoma Sales Tax Permit?
An Oklahoma Sales Tax Permit is a license that allows businesses to collect sales tax in the state and pass it on to the Oklahoma government. The Oklahoma Tax Commission (OTC) requires permits for any business selling tangible personal property or certain kinds of services within the state.
Who Needs to Register for an Oklahoma Sales Tax Permit?
Oklahoma-based businesses and foreign companies operating in the state must register for a sales tax permit. This applies to businesses with a physical presence in the state like a storefront or warehouse, as well as online businesses and phone or mail-order companies.
What is sales tax nexus?
Even if your business is not based in Oklahoma, it might still need to register for an Oklahoma Sales Tax Permit if the company has sales tax nexus in the state. “Nexus” means a connection between a business and a state where the business must be taxed. Per OK Admin Code 710:50-17-3, businesses in Oklahoma have nexus under the following circumstances:
- Keeping an office or other place of business in Oklahoma
- Storing goods in a warehouse or other business location in the state
- Employing a representative (such as a salesperson or contractor) who conducts business in the state
- Delivering goods in Oklahoma with a vehicle owned by a taxpayer
What kinds of business need a sales tax permit?
In addition to selling or renting physical goods, sales tax must be charged for certain services, such as:
- Lodging and meals
- Vehicle parking and transportation services
- Public utilities like telephone, gas and electrical service, except for water utilities
- Advertising and print services
How to Register for an Oklahoma Sales Tax Permit
To register for an Oklahoma Sales Tax Permit, you can apply using the OTC’s online Taxpayer Access Point (OKTAP). You will need to provide basic information about your business, like your legal name and address, and when you estimate you will begin making sales. You will also need to select a filing frequency for your sales tax returns. The filing frequency determines how often you are required to submit sales tax returns and remit any tax due. In Oklahoma, the filing frequency options are monthly, quarterly, or annually, based on the amount of sales tax you expect to collect.
What is the cost of an Oklahoma Sales Tax Permit?
There is a $20 fee to register for an Oklahoma Sales Tax Permit, and separate permits are required for each location you operate. When you collect and remit sales tax, you will need to pay the tax to the state. The sales tax rate in Oklahoma is currently 4.5%, although local sales taxes may also apply depending on the jurisdiction you operate in.
How to File Oklahoma Sales Tax Returns
Once you have a sales tax permit, you are required to file sales tax returns with the Oklahoma Tax Commission. Sales tax returns are used to report the amount of sales tax you collected during the filing period and remit any tax due. When filing your sales tax returns, you will need to report your total sales, taxable sales, and the amount of sales tax collected. You will also need to provide any deductions or exemptions that apply to your business.
When are Oklahoma sales tax returns due?
In Oklahoma, sales tax returns can be filed online using OKTAP or by mail using Form STS20002. The filing frequency you selected at registration determines how often you need to file your returns. Your tax returns are due on the 20th of the month following the end of your filing period, whether that is monthly, quarterly or annually.
What happens if I don’t get a sales tax permit or file returns?
It is important to file your sales tax returns on time and accurately to avoid penalties and interest charges. If you fail to file or pay your sales tax on time, the Oklahoma Tax Commission may assess penalties and interest charges, and even revoke your sales tax permit.