Oklahoma Sales Tax Permit: Everything You Need to Know
Your business must first register with the state Tax Commission to ensure proper management of the state sales tax. 3 min read
2. How Do You Register for a Sales Tax Permit?
A sales tax permit—also known as a sales and use tax permit, a sales tax license, or a transaction privilege tax (depending on the state where you do business)—is required before your business will be able to sell products.
Who Needs a Sales Tax Permit in Oklahoma?
Your business must first register with the state Tax Commission to ensure proper management of the state sales tax. When you register to collect sales tax, you're acknowledging your legal responsibility to collect, file, and remit sales tax to the state. Just about all businesses are required to have a state sales tax number.
You must collect sales tax if you sell products online (for example, on eBay) and the items are shipped within the same state. Your buyer must pay sales tax on the item(s). You'll pay sales tax on a quarterly or monthly basis. How often you pay depends on how much revenue you've earned and the type of business you run.
If you ship items within the state, those items are taxable. If you ship items out of state, they're usually not subject to sales tax. This changes if your yearly revenues are more than $4 million.
If you sell tangible personal property in the state, you must register for a sales tax permit if you have sales tax nexus. Nexus, as defined in tax terms, is a business' connection to a state. The term nexus doesn't refer only to a company's physical presence, although most businesses will have a physical connection in the state, like inventory or a warehouse. If the state considers your business to have nexus in Oklahoma, you're legally obligated to collect, file, and pay sales tax.
If you need more help understanding nexus, which can be a complicated topic, you might want to consult with a qualified tax professional.
The state of Oklahoma considers sales tax nexus to be:
- Goods in a distribution center, warehouse, or other business location
- A place of business or office located in Oklahoma
- A representative of the business, such as a contractor, salesperson, or installer, who's conducting business in the state
- The delivery of merchandise in the state via taxpayer-owned vehicles
You'll have to obtain a sales tax permit if you sell or rent tangible retail goods or provide any of the following services:
- Print and advertising services (with the exception of periodicals, newspapers, and billboards, plus advertising via electronic broadcast media, such as television, radio, and cable TV)
- Auto parking and transportation
- Lodging and meals
- Telephone service and other public utilities, such as gas and electricity, with the exception of water
Business owners must collect both local (county, town, and city) tax as well as sales tax from the buyer. They're then responsible for remitting these taxes to the state Tax Commission. If you're thinking about opening a new business, or you've just begun making sales, it's important to find out what your business' permit requirements are.
How Do You Register for a Sales Tax Permit?
You can register online. Visit the Tax Commission's Online Business Registration System website. When you register online, expect the agency to take at least five day s to process your application for a sales tax permit.
If you want to get your permit more quickly, you can apply in person. You'll go to the Tax Commission office in Oklahoma City or Tulsa.
Your sales tax permit will be issued on a probationary basis. This probation lasts for six months. Once your probationary period is over, the permit will automatically renew for a period of 30 months. If your business remains in good standing, you can renew your permit every three years from the date it was first issued.
If you're unsure which agencies you'll have to register with, you should contact the Tax Commission to get the information. Following are some of the potential agencies:
- State Department of Labor
- State Employment Agency
- Local tax Jurisdictions
- Department of Revenue
Whether you're starting a new business or you're expanding into Oklahoma, make sure you comply with all permit requirements to keep your company in compliance and in good standing. You can always contact the state Tax Commission for help or more information about all the necessary steps to take before you legally do business in Oklahoma.
If you need help with a sales tax permit in Oklahoma or another state, you can post your legal need on UpCounsel's marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.