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Oklahoma charges 4.5 percent state sales tax on sales of tangible personal property and certain services. The state also has some special taxes and levies discretionary taxes (local sales and use tax rates) on businesses.
Types of taxes for sales of goods
The most common tax a business filer pays in Oklahoma is the sales and use tax of 4.5 percent. Cities and counties also levy sales taxes, which are added to the state’s sales tax rate. Depending on the special tax, a wholesaler or retailer has to collect it and remit payment to the Oklahoma Tax Commission.
Sales and use tax for retail sales
The use tax works in conjunction with Oklahoma’s 4.5-percent retail sales tax rate. If a business purchases taxable items but does not pay tax and uses or stores the items, it must pay use tax.
Additionally, if a taxpayer purchases tangible personal property from out of state and does not pay tax on it, the taxpayer must pay use tax and file a use tax return.
Lodging (Hotel room occupancy tax)
Oklahoma does not charge a lodging tax at the state level. However, certain counties and cities charge the lodging tax. The tax is subject to change every quarter. During the first quarter of 2022, the following counties or cities have a 5 percent lodging tax:
- Blaine CTY
- Carlton Landing
- Cimarron CTY
- Coal CTY
- Cotton CTY
- Greer CTY
- Jefferson CTY
- Johnston CTY
- Latimer CTY
- Love CTY
- Marshall CTY
- Muskogee CTY
- Osage CTY
- Pontotoc CTY
The following have a 4-percent lodging tax:
- Cherokee CTY
Eufaula has a 9-percent tax, Mccurtain CTY has a 3-percent tax, Sand Springs is 7 percent, Sulphur is 5.5 percent, and Waynoka has an 8-percent lodging tax.
Businesses can check the Oklahoma Tax Commission’s page for new and updated lodging taxes.
Motor vehicle excise tax
Oklahoma also has a vehicle excise tax as follows:
- New vehicles: 3.25 percent of the purchase price.
- Used vehicles: $20 on the first $1,500 plus 3.25 percent on the remainder.
- New boats and boat motors: 3.25 percent of the manufacturer’s original retail selling price.
- Used boats and boat motors: 3.25 percent of the taxable value, which decreases by 35 percent each year.
- New manufactured homes: 3.25 percent of the first 50 percent of the purchase price.
- Used manufactured homes: 3.25 percent of 65 percent of half of the actual purchase price.
- New and used all-terrain and utility vehicles and off-road motorcycles: 4.5 percent of the actual purchase price. The minimum tax for these types of vehicles is $5.
Alcoholic beverage retailers must mark up alcoholic beverages, whether consumed on-premises or off, by at least six percent.
Oklahoma uses a tax stamp to show that taxes on tobacco products are paid. If a wholesaler pays the tax, it will add the tax to the purchase price of tobacco products.
- Cigarettes: 4 mills per cigarette, plus an additional tax of 2.5 mills in addition to federal taxes. An additional tax of 2.5 mills is also levied on cigarettes. As of 2005, the state also levied an additional tax of 40 mills. The statutes also call for an additional tax of 50 mills in addition to the previously mentioned taxes.
- Cigars weighing more than three pounds per thousand and if the recommended selling price does not exceed $0.04, the tax is $0.01 per cigar.
- Cigars weighing more than three pounds per thousand with a price that exceeds $0.04 per cigar, the tax is $20 per thousand.
- Smoking tobacco: 25 percent of the factory list price.
- Smokeless tobacco: 20 percent of the factory list price.
Retailers must add the following taxes upon the sale of tobacco products:
- Cigars weighing more than three pounds per thousand with a manufacturer’s recommended retail price of more than $0.04 per cigar: $10 per thousand.
- Smoking tobacco: 15 percent of the factory list price.
- Smokeless tobacco: 10 percent of the factory list price.
Additional taxes on tobacco products include:
- Cigars weighing more than three pounds per thousand: $90 per thousand.
- Smoking tobacco: 40 percent of the factory list price.
- Smokeless tobacco: 30 percent of the factory list price.
Discretionary taxes (Local tax rates)
Most of Oklahoma’s counties and many of its cities also add a local sales tax. If a county and a city within the county charges taxes, businesses must collect both taxes plus the state’s sales tax. A business can determine if it must collect both taxes by looking at the COPO number next to the city and state.
The first two digits of the four-digit COPO number cross-reference cities and counties. If the first two numbers are the same, the local jurisdiction has a city and county tax.
For example, Salina has a COPO of 4914, and is in Mayes County, which has a COPO of 4988. Thus, a business must collect the city tax and the county tax. Thus, the retailer would collect 4 percent for Salina, 1.375 percent for Mayes County, and 4.5 percent for the state, for a total of 9.875 percent.
Registering for and filing Oklahoma’s taxes
To pay Oklahoma’s sales tax, register for a tax account online. Once you register, you’ll be able to submit tax returns and remit tax payments. Unless a business receives an exemption, it must file reports and remit taxes through its account at the Oklahoma Tax Commission’s website.
Due dates for Oklahoma’s sales taxes
Businesses must file tax returns on a monthly, semiannually, or semimonthly basis, depending on the amount of gross receipts it has.
- Monthly: Reports and payments are due on or before the 20th day of the month following the month the business collected the taxes. For example, February’s taxes are due on or before March 20.
- Semiannually: If the business’s tax liability for any one month does not exceed $50, it can file semiannually after notifying the Oklahoma Tax Commission. The business must qualify by showing that it is seasonal, making sales incidental to the business, transient, or making sales through peddlers or other salesmen that do not have an established business location. Due dates are on or before the 20th of January and July each year. For example, taxes collected from January through June are due on or before July 20.
- Semimonthly: If a business’s tax liability is $2,500 or more per month, the business must participate in the Tax Commission’s electronic funds transfer and electronic data interchange program. Due dates are on the 20th of the current month for sales made from the 1st through the 15th of the month and on the 20th of the next month for sales made from the 16th through the last day of the month. For example, sales made from January 1 through January 15 are due on January 20. Sales made from January 16 through January 31 are due on or before February 20.
Oklahoma sales tax holiday
Oklahoma’s sales tax holiday is the first Friday through Sunday in August. The holiday allows consumers to purchase clothing that costs less than $100 tax-free.
Oklahoma sales tax exemptions
Oklahoma exempts several entities from paying sales tax, including:
- Shelters for abused, neglected or abandoned children.
- State, local, and county government entities.
- Veterans of Foreign Wars of the United States, Oklahoma Chapters.
- Volunteer fire departments.
- Web search portals.
- Youth camps.
- YWCA and YMCA.
- Agricultural entities.
- Blue Star mothers.
- Cable television.
- Computer services.
- Federal government agents with advanced purchase.
- Radio and television broadcasting.
- Organizations that support state parks in Oklahoma.
- Campus construction projects.
- Organizations that provide education relating to robotics.
- Spaceport users.
- Children’s homes supported by churches.
- Unremarried surviving spouses of 100 percent disabled veterans with service-related injuries.
- Qualified aircraft maintenance facilities.
- Authorized household members of 100 percent disabled veterans.
- Organizations operating as collaborative models.
- The Marine Corps League of Oklahoma.
- Organizations whose membership is limited to honorably discharged veterans.
- American Legion.
- Sales to certain nonprofits.
- Authorized household members of surviving spouses of 100 percent disabled veterans.
- Nonprofit organizations that construct, remodel and sell affordable housing.
- Nonprofit organizations restoring single-family housing following a disaster.
- Non-accredited museums.
Each organization must provide certain documents to qualify.
Remote and marketplace sellers
All remote and marketplace sellers must collect sales tax for sales in Oklahoma. The two exceptions are:
- If a marketplace seller’s marketplace facilitator collects the taxes, the seller does not have to.
- If the business has less than $100,000 in gross receipts, it does not need to collect Oklahoma’s taxes.
In many cases, businesses collect taxes for the convenience of their customers since the customers would have to pay use tax if they do not pay sales tax.
Oklahoma’s state sales tax is 4.5 percent. Businesses must add the applicable local taxes for the city and county where the business is located.
Oklahoma has several sales tax exemption certificates. It includes copies of the certificates in its Sales Tax Exemption Packet. Exempted purchasers can also use the Streamlined Sales and Use Tax Agreement in place of the resale certificate.
It depends on the state. While most states have a $100,000 exemption for small businesses, most businesses collect the other state’s sales tax as a convenience to their customers. Always check the other state’s tax laws to determine if your business is exempt.