AMAZON WILL GATHER STATE TAX
Under a deal revealed Thursday, Amazon has agreed to collect sales tax starting March 1.
Although the first remittance will be in May, the cash infusion won’t help the state’s budget shortfall. That’s because it already is built into Oklahoma’s revenue estimate.
Retailers and local governmental officials are cheering news that Amazon will start collecting sales taxes from its customers in Oklahoma.
“Yeah!” remarked Stephen Furhman, a retailer who owns A Cleaner Place, a vacuum cleaner and home cleaning store at 12409 N Rockwell, in Oklahoma City.
Furhman said retailers across Oklahoma have suffered as more and more shoppers have chosen to both price shop and buy their products from online retailers.
The effect of the agreement, he said, is an 8.75 percent raise for him, as he no longer will have to discount his products by that amount to offer the same deal a potential customer could find at Amazon.
“Amazon is the biggest online retailer out there, probably,” Furhman said. “It will level the price structure for any product out there that Amazon is selling. So, that’s huge.”
Further, he noted the change also should help his business and others attract new buyers because often manufacturers set minimum pricing for their goods that local retailers can’t undercut to stay competitive with an online company.
“I’m hoping to get some of those customers once this change starts.”
Furhman also is a member of the Warr Acres City Council, and in that capacity he has traveled to Washington, D.C., a couple of times to lobby Congress to educate its members about the issue.
“Our cities primarily are funded with sales and use taxes,” he said. “I have been on the council for four years, and during that time, I’ve seen our sales tax in Warr Acres not necessarily go down, but it hasn’t gone up, even though sales have gone up everywhere.
“It will be exciting to see if that changes in two months.”
Collections to start March 1
The agreement between Oklahoma and Amazon was announced Thursday by Gov. Mary Fallin at an annual legislative forum hosted by The Associated Press.
She said the company had been negotiating with Amazon for more than a year to reach an agreement, and said it will mean added tax revenues worth tens of millions of dollars each year.
“That will really help our state, but in particular, it will make a huge difference in our cities and towns,” Fallin said.
While Amazon will start collecting Oklahoma sales tax from its customers on March 1 and begin remitting those revenues
in May, the cash infusion won’t help the state’s budget shortfall.
That’s because it already is built into Oklahoma’s revenue estimate.
Oklahoma doesn’t require retailers that aren’t located within the state to add sales or use taxes to online purchases.
Typically, the responsibility to pay local and state taxes made by Oklahomans falls on them in online sales because the tax isn’t collected at the point of sale. One estimate suggests the state misses out on $300 million in tax revenue from online sales.
In-state retailers, meanwhile, must collect Oklahoma’s statewide sales tax of 4.5 percent and taxes levied by counties, cities and towns, depending on where they are located.