Sales Tax & Online Purchases

Paying Sales Tax for Online Purchases

Did you know that you should pay sales tax on items purchased online? Sale tax is due on all nonexempt purchases of tangible personal property and should be paid by the Oklahoma purchaser.

If your out-of-state online retailers don't collect sales tax at the time of purchase, you should report and remit the amount of the tax on your Oklahoma income tax. In Oklahoma, this kind of sales tax is called a use tax.

A provision in the Oklahoma Retail Protection Act of 2016, which took effect Nov. 1, 2016, instructs out-of-state sellers to provide their Oklahoma buyers with a statement of the total non-taxed sales made to them over the past calendar year. Much like a form 1099 or 1099-K, this form is due to Oklahoma buyers by February 1 of the following year. Here is sample language the state has put forward:

“YOU MAY OWE OKLAHOMA USE TAX ON PURCHASES YOU MADE FROM US DURING THE PREVIOUS TAX YEAR. THE AMOUNT OF TAX YOU MAY OWE IS BASED ON THE TOTAL SALES PRICE OF [INSERT TOTAL SALES PRICE] THAT MUST BE REPORTED AND PAID WHEN YOU FILE YOUR OKLAHOMA INCOME TAX RETURN UNLESS YOU HAVE ALREADY PAID THE TAX.”

The law also points out that the statement should not “indicate, imply or identify the class, type, description or name of the products purchased.”

Sales tax is the primary funding source for Oklahoma cities to provide services to its residents. In fact, Oklahoma is the only state in which municipalities are almost entirely dependent on sales tax for general operations.

If you have questions about remitting sales tax on your income tax form, talk to an accountant.