There’s more than wind sweepin’ down the plains in Oklahoma. Oklahoma Internet sales tax is being proposed as a way to help close their budget gap. They will join at least five other states; Colorado, Virginia, Mississippi, Vermont, and New Mexico, who have proposed legislation to collect Internet sales tax during the past couple of weeks. Several other states are also discussing presenting legislation. As you probably are aware, New York (2008), North Carolina (2009), and Rhode Island (2009) already have modern nexus laws.
Earlier this week, Oklahoma Governor Brad Henry unveiled his new 2011 Budget. The budget proposes several new initiatives to increase revenue and close the budget deficit. The Governor of Oklahoma is required to submit a balanced budget for his state, just as the governors of many other states must do. In order to balance the budget, Oklahoma needs to reduce spending and increase revenue. Among the Governor’s recommendations are several compliance initiatives including one to collect sales tax on Internet, telephone and mail order sales.
Currently, out-of-state businesses without a presence in Oklahoma are not collecting sales tax on Internet, telephone or mail order sales made to Oklahoma, effectively providing them with an advantage over Oklahoma-based operations that do collect the sales tax. This compliance initiative allows the Oklahoma Tax Commission to pursue sales tax collections from the out-of-state companies in question. The Governor’s budget includes an increase of $95 million to the General Revenue Fund in FY-2011 collection of taxes currently due the state on these sales by out-of-state entities.
As of this time, there does not appear to be a bill assigned but the legislation is proposed in the Governor’s Budget. Affiliate Advocacy will continue to monitor the legislation to identify the bill and the impact it may have on affiliates and merchants. As always the key for affiliates is to minimize the potential damage by preparing now. Do not wait until the last minute and do not be lulled into a false sense of security. It is far better to be prepared and pleasantly surprised with good news than to be unprepared and shell shocked.
Link to Oklahoma Governor’ Budget
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