Sales Tax & Online Purchases

Position Statement for Collection of Sales Tax on Online Purchases

Feb. 14, 2017

The Stillwater City Council and the Stillwater Chamber of Commerce support the position that all online retailers should collect and remit sales tax on purchases Oklahomans make. Cities in Oklahoma depend on sales tax to fund city services including police, fire, streets, parks and more. In fact, sales tax makes up 66 percent of municipal funding in Oklahoma.

The Council and Chamber also recognize that local merchants are at an 8.813 percent disadvantage when competing with online retailers. Locally owned businesses are the backbone of our community and contribute greatly to the local economy and our quality of life. They lose sales to online retailers because they collect sales tax.

While the Council and Chamber are pleased that the Oklahoma Retail Protection Act of 2016 (HB2531) passed, both would like to have stronger legislation that REQUIRES online retailers to collect and remit sales tax. Of the top 500 online retailers, only 170 collect and remit sales tax to Oklahoma.

The Council and Chamber are seriously concerned that the Oklahoma Retail Protection Act of 2016 is not strong enough. Currently, only 4 percent of taxpayers remit use sales tax for their online purchases on their state income tax. If online retailers will not collect and remit sales tax to the state of Oklahoma, they should be required to send annual tax statements based on purchases to all buyers AND the Oklahoma Tax Commission.

Reforms are necessary. Without them, cities will continue to struggle to fund the services local governments are expected to provide their citizens.

Sales tax on online purchases is not a new tax, but a tax that should be collected every day. It is estimated that Stillwater loses at least $3.5 million of online sales tax revenue annually.

The Council and Chamber support the position that policymakers consider additional sales tax reforms or allow Oklahoma cities access to other funding mechanisms, including property tax.