Oklahoma Sales Tax Guide
Chapter 3: Getting registered to collect Oklahoma sales tax
The first step toward proper management of Oklahoma sales tax involves getting registered with the Oklahoma Tax Commission. We get a lot of questions regarding this and recognize it may be the most difficult hurdle for small businesses to overcome. Registering to collect sales tax in Oklahoma means you've acknowledged your legal responsibility to collect and consequently file and remit sales tax to the state.When do I need to register to collect sales tax in Oklahoma?
There are two ways to think about this question. The first involves a topic called "nexus". Nexus, in the tax world refers to a company's connection to a state. While this connection is typically that of a physical nature (warehouse in the Oklahoma, inventory in Oklahoma, etc.), nexus is not limited to a physical presence. There are many nexus triggers we won't delve into here and, more importantly, nexus is often determined by a combination of events rather than a single event.
If it is determined you have nexus in Oklahoma, the Oklahoma Tax Commission has the legal right to require you to collect, file, and pay sales tax.
If you've determined you have nexus in Oklahoma, the second question involves a topic we call "materiality". In short, you'll want to ask yourself whether the amount of sales tax you are required to collect and remit to the Oklahoma Tax Commission is enough to put you at an unacceptable level of penalty and interest risk. As everyone's level of risk tolerance is different, this is a question that can only be answered by you, the business owner.
Prior to selling taxable goods or offering taxable services in Oklahoma, a business that has established nexus within the state is required to register for an Sales Tax Permit.What triggers nexus in Oklahoma?
Nexus is a complex topic that, depending on your situation, may require the in-depth knowledge of a qualified tax professional. That being said, there are a few common business events and situations that are known to trigger nexus in Oklahoma. The most common include the following:
- Opening an office in Oklahoma
- Storing inventory in a warehouse in Oklahoma
- Having remote employees located in Oklahoma
Businesses may register for an Oklahoma Sales Tax Permit online by visiting the Oklahoma Tax Commission and following the instructions provided.
At this time, Oklahoma does not allow businesses to register for a Sales Tax Permit via paper application. You'll need to visit the Oklahoma Tax Commission and complete your registration online.What information is required to register for a Oklahoma Sales Tax Permit ?
When applying for a Oklahoma Sales Tax Permit, there are a number of pieces of information that may be required. These include, but are likely not limited to:
- Business name
- Business entity type
- Description of business activities
- Date business activities began or will begin
- Business address and mailing address
- Business contact information
- The North American Industry Classification System (NAICS) code that best matches your business
- Federal Employer Identification Number (FEIN)
- Your name, Social Security Number (SSN), driver license number, personal address, and personal contact information of owner/sole proprietor
- List of business officers, partners, managing members, and/or trustees
- Employment information (date of hire, number of employees, payroll amounts, payroll agent’s PTIN, if applicable)
The cost to register for a Oklahoma Sales Tax Permit is currently $20.Do I need a Federal EIN in order to register in Oklahoma?
The Oklahoma Tax Commission requires businesses requesting a new Sales Tax Permit to supply a valid Federal EIN number during the initial registration process. You can apply for an EIN number online by visiting the IRS website.Which Oklahoma governement agencies do I need to register with in order to get a new Sales Tax Permit?
We recommend you contact the Oklahoma Tax Commission to verify which government agencies you will be required to register with. Potential agencies include the following:
- Oklahoma Department of Revenue
- Oklahoma State Employment Agency
- Oklahoma State Department of Labor
- Oklahoma Local Tax Jurisdictions
Yes! Oklahoma Sales Tax Permit registration is unique to the state of a business. The Oklahoma Tax Commission requires all registered businesses to have current business owner name and contact information on file.