Amazon sends its first sales tax check to Edmond, state

Edmond’s May sales tax collection check includes money remitted by Amazon — the first time the city has received such funds since the online company started collecting sales tax from Oklahoma customers March 1.

City Finance Director Warren Porter estimates that Edmond will receive $600,000 from Amazon over the next fiscal year.

Sales tax from Amazon will boost state and local budgets, but the actual amount that governmental entities receive will not be made public because Amazon is a private business and its tax information is protected.

“It is confidential, the amounts specific companies collect and remit,” said Paula Ross, the Oklahoma Tax Commission’s communications director.

Internet sales tax collections are recorded at the state and municipal levels as part of the use tax. A use tax is imposed when purchases are made outside the state, and state sales tax has not been collected.

Collecting a use tax is difficult because the government has no effective way of monitoring these out-of-state sales.

Increases in use tax collections, which includes more than Amazon’s sales tax, were reported in Edmond and at the state level.

The state collected more than $23.5 million in use taxes in April, an increase of nearly $4 million from the previous April’s collections of almost $19.6 million, Ross said. That’s an increase of about 20 percent.

In Edmond, use tax collections jumped from $337,426 in April to $570,391 in May. The $232,965 difference includes an unknown amount of sales tax from Amazon.

Porter said the May use tax collections also included sales from a couple of oil-related construction projects. He said he didn’t know specifics.

After receiving Amazon’s first month’s check, Porter said he thinks his $600,000 annual estimate is “achievable.”

Since January 2015, Edmond’s previous high use tax collection was $449,131 recorded in February 2016. The monthly total has dropped as low as $249,361 in March 2015.

“The use tax is more difficult to project because a lot of things we get are generally onetime payments,” Porter said. “A use tax is generally defined as something that is generally sold and delivered to someone in Edmond from out of state.

“The company that sells that item to Edmond does not have any physical presence in the state of Oklahoma,” he said.

Oklahoma is now the 40th state where the Seattle-based e-commerce company collects and remits sales tax.

Amazon started collecting Oklahoma sales tax from its customers after more than a year of negotiations with state officials.

“It does make it a fairer playing field for brickand-mortar stores when online retailers are remitting tax,” Ross said.

For Edmond’s overall May tax collections, the sales tax figures were down 1.8 percent compared to a year ago.

This month’s sales tax collection check was just over $5.2 million. This check was for the last two weeks of March and the first half of April.

“We are just kind of holding our own,” said Assistant City Manager Steve Commons. “We have not seen a lot of movement all year.”