The Real Deal About Sales Tax

If you have a physical store or office for your business, you must apply for an EIN in Oklahoma but what about those online stores that are operating outside of the state? In a recent ruling, the United States Supreme Court has decided that states are now legally allowed to put in place taxes to businesses that are outside of the state as long as they have goods coming in which are ordered through the internet. Politicians in Oklahoma got a little bit excited of this ruling because they though they will be able to collect more tax dollars.

That big hope was squashed when it was calculated that the potential tax gains may not be as high as they think. There is a risk to it too because careless collections of taxes might impact the economy negatively which is opposite their main goal.

Ever since the rise of online shopping, states are not allowed to collect taxes from businesses that have no physical shop within their jurisdiction. Local sales taxes are also not imposed on the business as long as the customer ordered through an online method or catalogue. The customers, however, are mandated to pay the tax but only few do so and many do not bother to report whatever they ordered online since it cannot be tracked by the taxation authorities.

Now the Supreme Court decided to overturn its previous decisions. With this, the state of Oklahoma is given the permission to mandate businesses all over the United States to pay state as well as local taxes as long as they are selling products to consumers residing within Oklahoma. Other states are also given the permission to impose the same rules in all Oklahoma businesses that are selling their products online to consumers residing in other states.

The sales tax rate for the state of Oklahoma is currently 4.5 per cent and if there is an additional sales tax rate imposed by the local then the total could reach 11.5 per cent. According to estimates, the residents of Oklahoma spend almost $3 billion on annual purchases through online channels thus the state government could earn as much as $160 million per year. This is on top of sales earned from businesses that were able to apply for an EIN in Oklahoma which are also mandated to pay taxes.