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Oklahoma Sales Tax 2022 for Businesses: A Complete Guide

“The sales tax for businesses in Oklahoma is 4.5%”

What Does The Oklahoma Sales Tax For Businesses Mean?

A sales tax is a fee levied on the sale of certain goods and services and paid to the government (state or local). Oklahoma’s general state sales tax was originally enacted in 1933, and the rate has since climbed to 4.5 percent. Additionally, there may be one or more local sales taxes, as well as one or more special district taxes, each of which can range from 0% to 7%. Combined sales tax rates in Oklahoma currently range from 4.5 percent to 11.5 percent, depending on where the sale is made.

When you offer taxable products or services, you function as an agent for the state of Oklahoma, collecting tax from customers and remitting it to the proper tax authorities. The Oklahoma Tax Commission is in charge of collecting sales and use taxes in Oklahoma (OTC).

The state of Oklahoma owns any sales tax received from customers, not you. To comply with state and municipal legislation, it is your responsibility to maintain an account of the taxes you collect. Penalties and interest charges may be imposed if this is not done.

Read More: Ohio Sales Tax 2022 for Businesses: A Complete Guide

How Much Is The Oklahoma Sales Tax For Businesses?

If you get income from an Oklahoma source and are a resident or nonresident, you must pay taxes to the state of Oklahoma. The state income tax rate varies from 0% to 5%, while the sales tax rate is 4.5 percent.

Tax deductions and credits, such as those for disability-related expenses and eligible adoption fees, as well as a tax credit for income tax paid to another state, are available in Oklahoma to help you lower your tax bill.

Oklahoma Sales TaxThreshold Limit
4.5%$100,000 economic sales threshold limit

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If you have a nexus in Oklahoma, you must collect sales tax. Vendors might be physically or economically linked to a state when it comes to nexus. Physical nexus is defined as having enough tangible presence or activity in a state to make it worthwhile to pay sales tax there. Economic nexus means exceeding a state’s economic threshold for total income or number of transactions.

Therefore, this is what the Oklahoma sales tax for eCommerce businesses is all about. Now the question arises: what types of goods and services are taxable in Oklahoma? Let’s see.

What Types of Goods and Services Are Taxable In Oklahoma?

The first step in sales tax compliance is determining if the products or services your company offers are taxable in Oklahoma.

Traditional Goods or Services

Physical property, such as furniture, home appliances, and automobiles, are all subject to sales tax in Oklahoma.

Both prescription drugs and gasoline are tax-free.

Digital Goods or Services

A digital good or service is anything that is delivered electronically, such as an album downloaded from iTunes or a film purchased from Amazon.

Businesses in Oklahoma are not required to collect sales tax on digital goods or services.

Oklahoma, however, is an exception to this rule. It is important for businesses to collect sales tax on pre-written computer software that is sold online.

Therefore, if you are dealing in any of these goods and services, you are subject to pay sales tax in Oklahoma. Now let’s move on to see the tax collection and tax filing procedure in Oklahoma.

Tax Collection

You’ll need to figure out how much sales tax to charge different clients after you receive your seller’s permit and start your business. To avoid fines and the prospect of costly audits, it is vital for business owners to collect the correct rate of sales tax.

  • Store Sales- For traditional business owners selling goods or services on-site, calculating sales tax is straightforward: all sales are taxed at the rate established by the store’s location. This is exactly opposite for the eCommerce businesses. 
  • In-state Sales- Oklahoma’s sales tax policy is known as a destination-based sales tax policy. This means that long-distance sales in Oklahoma are taxed based on the buyer’s address. The state, country, and city collecting sales tax need to follow this regulation.
  • Out-of-state Sales- On out-of-state sales, only businesses with nexus in other states are required to pay sales tax. A company’s actual presence in another state is referred to as a “nexus.”

Tax Filing

You’re ready to file your sales tax return now that you’ve applied for your Oklahoma seller’s permit and learned how to charge the correct amount of sales tax to all of your clients. You avoid penalties and fines by adhering to all filing deadlines.

Businesses in Oklahoma are required to file sales tax forms and make sales tax payments online.

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

The overall amount of sales tax your company collects determines the frequency with which you must file.

  • Semi-Annual Filing- If your firm receives less than $83.33 in sales tax every month, you should choose to file returns every two years.
  • Monthly Filing- If your company receives more than $83.33 in sales tax per month, you must file returns on a monthly basis.

What If You Fail To File The Oklahoma Sales Tax Return Before The Due Date?

Filing Deadlines

Unless it’s a weekend or a federal holiday, all Oklahoma sales tax returns are due on the 20th of the month. If it’s a weekend or a federal holiday, the deadline is pushed out to the next working day. 

Penalty for Late Filing

If a tax return is not filed within 10 days after receiving written notification from the state, Oklahoma assesses a late filing penalty of 25% of the tax declared on the return.

Oklahoma additionally imposes a late payment penalty equivalent to 10% of the unpaid tax if it is not paid within the first 15 days of the due date.

For any unpaid tax or penalty, the state charges a compounding interest rate of 15 percent per year, or 1.25 percent every month or half month.

Need Assistance With Oklahoma Sales Tax

You can contact us anytime if you have any queries about the Oklahoma Sales Tax in 2022. FreeCashFlow is a tax and accounting agency with over 20 years of experience in Los Angeles, California. We will be able to give you the best possible service with our tax and accounting services.

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