To help bridge the funding gap left behind by dwindling oil and gas tax revenues, two Oklahoma lawmakers want to close an Internet sales tax loophole. Rep. Chad Caldwell and Rep. Jason Dunnington have filed House Bill 2925, the Oklahoma Retail Protection Act. It would allow the state to collect sales taxes of transactions between a buyer from Oklahoma and large online retail sites, like Amazon, that utilize vendors in Oklahoma. The current law allows sales tax collections if the Internet vendor has a brick and mortar location in the state.
“This bill is primarily about creating a level playing field between Oklahoma businesses that have to collect sales taxes and out-of-state businesses that do not,” said Caldwell. “Government should not be in the business of picking winners and losers in the marketplace, but should enact politicies that create a fair market. More and more shoppers are purchasing products from the Internet because they don’t have to pay sales taxes on those purchases, while they would if they went to one of our brick-and-mortar stores.”
Dunnington sees the bill as a way to enhance revenues to bridge part of the budget gap.
“In her State of the State speech, Governor Fallin made identifying new revenue streams a priority for 2016, and this bill does that by closing the loophole on Internet sales tax,” said Dunnington. “Studies have shown our state loses hundreds of millions each year to Internet sales that Oklahomans avoid paying tax on. That would go a long way toward teacher pay raises and Medicaid funding for women and children. I think we have a responsibility to cities and towns across the state to make our marketplace more fair for hardworking Oklahoma business owners, and to close tax loopholes that could help us pay for core government services.”
The House Appropriations and Budget Committee has been assigned the bill.
