Sales tax at a glance

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Oklahoma sales tax calculation

Oklahoma has a statewide base sales tax rate of 4.5%. On top of this, local jurisdictions like cities, counties, and special districts can impose up to an additional 7% in local sales taxes.

When combined, sales tax rates across Oklahoma range from 4.5% (in areas with no local taxes) up to 11.5% (in areas with the maximum additional local taxes). Businesses must collect both state and applicable local sales taxes.

The Oklahoma Tax Commission administers sales tax in the state. Sellers with over $100,000 in Oklahoma sales in a year have economic nexus and must collect tax. The commission offers resources online and over the phone to help businesses comply.

List of local sales tax rates in Oklahoma

In addition to the 4.5% statewide sales tax, 469 local jurisdictions in Oklahoma impose local sales taxes ranging from 0% to 7%. Here are some examples of local sales tax rates across Oklahoma:

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FAQs

How do you calculate Oklahoma sales tax?

To calculate Oklahoma sales tax, take the purchase price and multiply it by the combined state and local tax rate for that jurisdiction. For example, if buying a $100 item in Tulsa, the sales tax rate is 9.5%. So the sales tax would be $100 * 0.095 = $9.50.

What are the penalties for not paying Oklahoma sales tax?

Penalties for failing to pay Oklahoma sales tax can include fines of up to 10% of unpaid taxes plus interest charges of 1.25% per month. Criminal charges may also apply for willful violations.

What's the difference between destination-based and origin-based sales tax states?

In destination-based sales tax states like Oklahoma, the sales tax rate is determined based on the ship-to address. In origin-based states, sales tax is based on the seller's location/origin of the sale.

Is Oklahoma a streamlined sales tax state?

Yes, Oklahoma is a full member state of the Streamlined Sales and Use Tax Agreement (SSUTA).

Sales tax nexus in Oklahoma

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FAQs

Do I need an Oklahoma seller's permit if I’m only a wholesaler?

Yes, wholesalers in Oklahoma still need to register for a sales tax permit even if they only sell to other businesses. The buyers are still responsible for reporting and paying use tax.

Do I need an Oklahoma seller's permit if I only sell temporarily in the state?

Yes, even temporary sellers need to register and collect Oklahoma sales tax if they meet the sales tax nexus thresholds. There is no exception for temporary sales.

Exemptions from sales tax in Oklahoma

Some exemptions include:

• Prescription drugs
• Medical equipment
• Agricultural equipment
• Manufacturing equipment

See the full list on the Oklahoma Tax Commission website.

FAQs

Are groceries taxable in Oklahoma?

Most groceries are exempt from sales tax in Oklahoma, including meat, dairy products, vegetables, bread, cereal, and more household food items. Some prepared foods may be taxable.

Is clothing taxable in Oklahoma?

Clothing and footwear priced under $100 are exempt from sales tax during Oklahoma's annual sales tax holiday in August. Otherwise, clothing is generally taxable year-round.

Are digital products taxable in Oklahoma?

Yes, digital products like ebooks, music downloads, apps, and streaming services are subject to Oklahoma sales tax.

Is software-as-a-service (SaaS) taxable in Oklahoma?

No, SaaS and other online software services are not subject to Oklahoma sales tax.

Are services taxable in Oklahoma?

Most services are not taxable in Oklahoma. However, any services that involve producing tangible personal property may be taxable.

Excise taxes in Oklahoma

Oklahoma levies selective excise taxes on specific goods and products like motor fuel, tobacco, alcohol, and medical marijuana.

Motor fuel excise tax

• Gasoline - $0.16 per gallon
• Diesel - $0.19 per gallon
• CNG - $0.16 per gallon or GGE (gasoline gallon equivalent)

In addition, Oklahoma counties can charge up to $0.02 per gallon in additional gasoline/diesel taxes that sellers must collect.

Tobacco excise tax

Oklahoma levies a variable rate tobacco products tax based on product type and price:

• Cigarettes - $2.03 per pack of 20 cigarettes
• Other tobacco products - taxed at 25% - 75% of the product price depending on type

Alcohol excise tax

Excise tax rates on alcoholic beverages in Oklahoma:

• Beer - $12.5 per barrel
• Wine - up to $0.55 cents per liter
• Spirits - $1.47 per gallon

Municipalities and counties can also charge local marijuana taxes up to an additional 2% on retail sales.

Remote sellers in Oklahoma

Remote sellers with over $100,000 in Oklahoma sales have economic nexus and must collect and remit sales tax. Oklahoma also has marketplace facilitator laws requiring the collection of sales tax on marketplace sales.

Discretionary taxes in Oklahoma (Local Sales Taxes)

469 cities and counties in Oklahoma charge additional local sales taxes ranging from 0-7%. Sellers must collect both state and local sales tax based on the ship-to address.

Collecting sales tax in Oklahoma

Collecting sales tax in Oklahoma involves registering for a permit, charging the correct rates at checkout, filing returns, and remitting taxes on time. Let's explore the key steps for in-state and out-of-state sellers.

How to collect Oklahoma sales tax if you are not located in Oklahoma (out-of-state sellers)

Even without a physical presence, out-of-state sellers must collect Oklahoma sales tax once they meet the $100,000 economic nexus threshold. To get started:

1. Register for an Oklahoma sales tax permit with the Tax Commission. This establishes you as a collector agent for the state.
2. Integrate sales tax calculations into your checkout process. Rates will vary by customer shipping location, so address-level precision is important.
3. File Oklahoma sales tax returns reporting your total taxable sales and tax collected. This is usually done monthly or quarterly.
4. Remit the sales tax you collected to the Oklahoma Tax Commission. The tax dollars do not belong to your business.

Simplified solutions like Numeral handle registrations, tax calculations, filing, and remittance for you automatically. Spend only 5 minutes a month to approve or reject any tax filings before they go ahead. 

Should you collect sales tax on shipping charges in Oklahoma?

If shipping fees are separately stated on the invoice, they are not subject to Oklahoma sales tax. However, if you include shipping charges in the overall order total, they become part of the taxable transaction.

It's important to understand when shipping charges should or should not be taxed. Reaching out to an Oklahoma sales tax professional can help clarify the precise rules for your business.

Solutions like Numeral make sales taxes seamless no matter how complicated state rules are.

Filing & paying Oklahoma sales taxes

Properly filing returns and remitting collected sales tax to the state is a critical compliance responsibility for Oklahoma businesses.

Filing and paying sales taxes in Oklahoma

The process involves:

1. Calculating your total taxable Oklahoma sales and the sales tax collected for each filing period.
2. Filing an Oklahoma sales tax return detailing your taxable transactions and tax owed. This is submitted to the Tax Commission.
3. Remitting the sales tax dollars your business collected to the state. This payment should match what's on your filed return.

Automating this entire process through solutions like Avalara AvaTax or Numeral takes the complexity out of filing. Transaction data flows directly into accurate returns, with no manual work required.

Oklahoma sales tax return filing schedule and due dates

The Oklahoma Tax Commission sets filing frequencies based on business size and tax revenues:

Monthly filing: For businesses that collect $2,500+ in sales tax per month, returns are due by the 20th of the following month.

Semi-annual filing: Smaller sellers collecting less than $50 per month can request semi-annual filing. Returns covering Jan-June sales are then due by July 20, with returns covering July-Dec sales due by Jan 20.

Monthly Return Due Dates

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Semi-Annual Return Due Dates

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Penalties for late filing or late payments in Oklahoma

If you file your Oklahoma sales tax return late, you may face:

• Late filing penalty: 10% of unpaid taxes
• Late payment penalty: 1.25% interest per month

It's critical to file on time even if you can't pay the full amount due. The penalties and interest add up quickly.

FAQs

What are the Oklahoma sales tax due dates?

Oklahoma sales tax due dates vary based on assigned filing frequency:

• Monthly filers: Returns due by the 20th of the following month
• Semi-annual filers: Jan-Jun period due July 20; Jul-Dec period due Jan 20

I didn’t collect any Oklahoma sales tax during this period. Do I still need to file a return?

Yes, you must file $0 or "no tax due" returns in Oklahoma even for periods with no taxable sales or tax collected. Failing to file returns can lead to non-filing penalties.

Can I amend an Oklahoma sales tax return?

Yes, you can file an amended Oklahoma return to correct errors or report additional tax due from a prior period. Amended returns should be filed online at OkTAP or using form BT-AMES. You'll owe any additional tax plus interest and may face penalties.

What is the penalty for filing and/or paying Oklahoma sales tax late?

Oklahoma charges up to 10% of unpaid taxes as a penalty for late filing, plus interest of 1.25% per month. Total penalties cannot exceed 25% of taxes due. Paying on time prevents penalties, so leverage automated solutions.

Audit & appeals process in Oklahoma

If your business is selected for an Oklahoma sales and use tax audit, you'll go through a multi-step process including review of records, assessment of any additional taxes owed, and opportunities to appeal the audit findings.

Oklahoma sales tax audit process

The key steps in an Oklahoma sales tax audit are:

1. Notification - You'll receive an initial Notification of Intent to Audit from the Oklahoma Tax Commission.
2. Pre-audit research - The auditor gathers information and prepares before contacting you.
3. Entrance conference (optional) - The auditor may hold an introductory entrance conference.
4. Records review - The auditor thoroughly reviews your Oklahoma tax returns, exemptions claimed, and relevant financial records.
5. Additional assessment - If the audit uncovers issues, the auditor calculates taxes, penalties, and interest owed in a proposed assessment.
6. Contesting findings (optional) - You can contest the audit findings and proposed assessment with the auditor.
7. Final assessment - A final Notice of Assessment is issued detailing taxes, penalties, and interest due.
8. Appeal or payment - If you still disagree, you must file a formal appeal within 60 days or pay the amount owed.

What to expect during the audit?

The auditor will request many records like sales invoices, bank statements, tax returns, and details on out-of-state and exempt sales. They compare your reported taxable sales and taxes remitted to total business revenues to uncover unreported tax liabilities. Expect a thorough review.

After the audit – Appealing the results

If you disagree with the final assessment, you can file a formal appeal with the Oklahoma Tax Commission within 60 days. This starts a legal process allowing you to contest the audit findings. Working with an experienced Oklahoma sales tax representative for the appeals process is advisable.

Sales tax registration in Oklahoma

Registering for a sales tax permit establishes your business as a collector of taxes on behalf of the state. Here's what Oklahoma sellers need to know:

How to register for sales tax in Oklahoma

You can register online for an Oklahoma sales tax permit through the Tax Commission's Taxpayer Access Point (OkTAP) system. You'll need to provide:

• Business information (Name, address, EIN, etc.)
• Ownership information
• Date activities began
• Products sold
• Projected monthly sales

There is a $20 registration fee when applying for an Oklahoma seller's permit.

Registration requirements for online sellers

Out-of-state online sellers must collect Oklahoma sales tax once they exceed $100,000 in annual sales. So registering is critical upon meeting this remote seller economic nexus threshold.

Cost of registration for an Oklahoma sales tax license

It costs $20 to register for a standard Oklahoma sales tax permit. Additional fees may apply in certain situations.

More Information & Contacts

• Oklahoma Tax Commission
• Phone: (405) 521-3160
• Website: https://oklahoma.gov/tax.html

Automating the entire sales tax management process through solutions like Numeral can save time and unnecessary costs. They take care of registrations, tax calculations, filing, and more so you spend no longer than five minutes a month on sales tax compliance.