Drop Shipping Tax Exemptions in Oklahoma

Every two years, the Oklahoma Tax Commission responds to a 10-question drop shipment questionnaire. Some years its answers are similar to those given in the prior survey, and some years its answers are different. Taxpayers who use drop-shipping in the course of business are advised to remain up-to-date on this variable state policy, as it affects tax obligations.

For example, in a 2012 letter ruling, the Tax Commission tells a taxpayer that responses to the 2012 survey “have substantially changed from those in 2010.” A 2014 letter ruling reveals that “our responses are substantially the same to those given in 2012.”

Highlights from the 2012 Third Party Drop Shipment Survey:

• Oklahoma will accept a resale certificate from the state of a Buyer Corporation not registered in- and having no nexus in- Oklahoma. “The Seller Corporation should obtain an exemption certificate listing the Buyer Corporation's resale number issued by its home state along with written confirmation that it is in the business of reselling the items being purchased, and that the items being purchased are for resale. The certificate should be signed by a person authorized to bind the Buyer Corporation. The certification may be made in the manner set forth in paragraph ( 1) of Oklahoma Administrative Code (OAC) 710:65 -13 -200.”
• “Direct pay certificates cannot be accepted to exempt purchases for resale. The resale certificate is the proper document.” See OAC 710:65 -9 -10 and 710: 65 -13 -200.

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