The statewide sales tax rate in Oklahoma is 4.5%. However, local cities and counties can also impose their own sales taxes, meaning the total sales tax rate varies across the state from 4.5% to 11.5%.
Some examples of total sales tax rates in major Oklahoma cities are:
- Oklahoma City: 8.625%
- Tulsa: 9.583%
- Norman: 9%
- Lawton: 8.75%
- Edmond: 8.35%
To find the exact sales tax rate for a location in Oklahoma, use an Oklahoma sales tax calculator.
Oklahoma Sales Tax Calculator
To calculate the sales tax on a purchase in Oklahoma:
- Find the total sales tax rate for your city using the table above.
- Multiply the purchase price by the total tax rate.
For example, if you purchase a $100 item in Oklahoma City, which has a 8.625% total sales tax rate, you would calculate:
- Purchase Price: $100
- Tax Rate: 8.625%
- Sales Tax Owed: $100 x 0.08625 = $8.63
So you would owe $8.63 in sales tax on your $100 purchase in Oklahoma City.
You can also use our handy Oklahoma Sales Tax Calculator to automatically calculate the sales tax on any purchase based on your location.
Oklahoma Sales Tax Calculator
Oklahoma Sales Tax Calculator
What purchases are taxable in Oklahoma?
Oklahoma collects sales tax on the retail sale of most tangible goods and some services. Some examples of taxable purchases in Oklahoma include:
- Clothing and footwear
- Furniture and home furnishings
- Electronics like computers and cell phones
- Toys and games
- Jewelry
- Prepared food and restaurant meals
- Hotel rooms and accommodations
- Alcoholic beverages
- Cleaning and laundry services
- Admission to movies, concerts, sporting events, etc.
- Online purchases from retailers with an Oklahoma presence
What purchases are exempt from sales tax in Oklahoma?
Oklahoma provides sales tax exemptions on some types of goods and services, such as:
- Most non-prepared groceries and food items
- Prescription drugs and medicine
- Medical supplies and equipment
- Gasoline and other motor fuels
- Farm equipment, machinery, and feed
- Utilities like water, electricity, and natural gas
- Manufacturing equipment
- Vehicle trade-ins
- Services like accounting, legal, medical, etc.
The state also offers sales tax holidays before the start of each school year when certain back-to-school supplies are exempt from sales tax for a limited period.
Some cities and counties may not tax all the categories exempted at the state level, so check locally for more details.
Sales Tax Exemptions in Oklahoma
Oklahoma offers several sales tax exemptions to individuals, businesses, and organizations who meet certain criteria. Some main sales tax exemptions in Oklahoma include:
Government and Non-Profit Organizations
State and local government agencies do not have to pay sales tax on government purchases. Qualified non-profit organizations are also exempt.
Manufacturing Machinery/Equipment
Machinery, equipment, and replacement parts used directly in manufacturing are exempt from Oklahoma sales tax.
Farming and Ranching
Sales of agricultural machinery, equipment, and feed used in farming and ranching production are exempt.
New Residents
New state residents can purchase up to $2,000 of household goods and personal belongings tax-free within 60 days of their move if they intend to stay in Oklahoma permanently.
Medical Sales Tax Exemptions
Prescription drugs and over-the-counter medicines, medical equipment and supplies, and items for long term care like wheelchairs and hospital beds are exempt from sales tax in Oklahoma.
Aircraft Repairs and Modifications
Parts and labor for certain aircraft repairs, remodeling, and modifications are exempt from sales tax.
Businesses and individuals should apply for any available exemptions when filing sales tax returns to properly claim eligible exemptions. Supporting documentation may be required.
Registering for a Sales Tax Permit in Oklahoma
If you are a business that sells taxable goods or services in Oklahoma, you need to register for a sales tax permit with the Oklahoma Tax Commission. Some key steps include:
1. Determine if you need a sales tax permit
Businesses that make retail sales in Oklahoma generally need a sales tax permit. This includes:
- Selling taxable tangible goods, whether wholesale or retail
- Providing taxable services like dry cleaning or auto repairs
- Operating a hotel, restaurant, or other hospitality business
- Selling items, goods, or services online to buyers in Oklahoma
2. Apply for a sales tax permit
You can apply online for your Oklahoma Sales Tax Permit through the Oklahoma Tax Commission. You will need to provide business information and agree to collect, file, and remit sales taxes. There is no fee to apply.
3. Receive your sales tax permit
Once approved, you will receive a sales tax permit in the mail. This permit contains your Oklahoma Sales Tax Permit Number which you will need for reporting and remitting sales tax. Display this permit prominently at your place of business.
4. Understand sales tax reporting and payment
Oklahoma has monthly, quarterly, and annual sales tax reporting frequencies based on your business’s total tax liability. Most businesses file monthly or quarterly returns.
Sales tax payments are due at the same time as return filing. Returns and payments can be submitted online through the Oklahoma Taxpayer Access Point.
5. Collect sales tax from customers
Once registered, you must collect required state and local sales taxes from all customers on taxable sales and remit these taxes to the state. Use your sales tax permit number on all receipts and invoices.
Accurate permit registration and tax collection is crucial to avoid penalties for non-payment. Keep detailed sales tax records and obtain exemption certificates from qualified exempt buyers.
How to File Your Oklahoma Sales and Use Tax Return
If you are a business that collects Oklahoma sales tax, you will need to regularly file sales and use tax returns to report and remit the tax you collected. Here is how Oklahoma sales and use tax returns work:
Reporting Periods
Oklahoma sales tax returns are filed on a:
- Monthly basis if you collect $2,500+ in state sales tax per month
- Quarterly basis if you collect $100 – $2,499 in state sales tax per month
- Annually basis if you collect less than $100 per month
Returns are due by the 20th day of the month following the end of the filing period.
Online Filing
You can conveniently file your Oklahoma sales and use tax returns electronically using the Oklahoma Taxpayer Access Point (OkTAP).
OkTAP allows you to file returns, make payments, view filing history, and manage your sales tax account online.
Remitting Payment
The sales tax you collected during the filing period is due at the time you submit your return. Oklahoma allows several payment options:
- Pay online when e-filing through OkTAP
- Pay by credit card
- Pay by electronic funds withdrawal when e-filing
- Mail a check or money order with paper return
Account for Exemptions
Be sure to only pay sales tax on taxable sales. If you made any exempt sales, deduct these amounts when calculating total tax due.
Keep exemption certificates and other documentation to back up any claimed exemptions.
Sales Tax Records
Maintain detailed records of your Oklahoma sales and use tax filings and payments. Records should be kept for at least 3 years.
How to Collect Oklahoma Sales Tax from Customers
Once registered, retailers are responsible for properly collecting and remitting Oklahoma sales tax on taxable transactions. Follow these tips:
Charging Sales Tax at Time of Sale
Compute the total sales tax due at the time of sale and add it to the purchase price. This tax is then collected from the customer along with the price of the item or service.
Sales Tax Rates
Make sure to charge all applicable state and local sales taxes for the customer’s delivery location. Oklahoma sales tax rates vary by city/county so verify the correct rate.
Taxable Goods and Services
Collect sales tax on all taxable goods and services in Oklahoma like retail sales of tangible goods, restaurant meals, auto repairs, hotel stays, etc.
Exempt Sales
Do not charge sales tax on exempt items like groceries and prescription medicine. Also exempt eligible sales to government agencies, charities, manufacturers, farmers, etc.
Receipts
Provide the customer with a sales receipt, invoice, or other documentation showing the tax being collected. List the sales tax separate from the purchase price.
Permits and Licensing
Prominently display your Oklahoma Sales Tax Permit at all business locations. Include your sales tax ID number on receipts/invoices.
Records
Keep detailed records of all sales taxes collected from customers along with exemption certificates, tax returns, and other documentation.
What are the Penalties for Not Collecting Oklahoma Sales Tax?
Failing to properly register for, collect, report, and remit Oklahoma sales tax can lead to serious tax penalties.
Unregistered Business Penalties
Businesses operating in Oklahoma without a valid sales tax permit face:
- Penalty: 10% of the total taxes due
- Interest: 1.25% per month
Failure to Collect/Remit Tax Penalties
If a registered business does not collect the full amount of sales tax due from customers, penalties can include:
- Penalty: 10% of uncollected/unremitted amount
- Interest: 1.25% per month
Late Filing/Payment Penalties
For each late sales tax return or payment, penalties may be:
- Penalty: 10% of taxes due
- Interest: 1.25% per month
Audit Assessments
If an audit reveals unremitted taxes, Oklahoma imposes:
- Penalty: 10 – 25% of assessed tax due
- Interest: 1.25% per month
Criminal fines or imprisonment are possible for tax evasion or fraud.
Sales Tax Management Software for Oklahoma Businesses
Using sales tax management software is the easiest way for Oklahoma businesses to stay compliant with sales and use tax filing and payment obligations. Benefits include:
Sales Tax Rate Determination
Software automatically applies the correct tax rates for Oklahoma locations using embedded data and mapping. No more manual rate lookups.
Taxability Determination
Systems contain taxability databases telling you whether products and services are taxable or exempt in Oklahoma.
Returns & Payments
Filing Oklahoma returns and remitting payment is error-free and simple with automated tax filing and e-payment capabilities.
Customer Exemption Management
Easily track and validate customer exemption certificates and other documentation so you only collect tax from non-exempt customers.
Tax Calendar
Never miss a sales or use tax due date again with automated reminders and notifications.
Records Management
Detailed tax records are securely stored digitally on the cloud for easy access and retention.
Popular options include Avalara AvaTax, TaxJar, Vertex, and Thomson Reuters ONESOURCE.
Oklahoma Sales Tax Laws and Regulations
The main laws governing Oklahoma sales and use tax are:
- Title 68 Oklahoma Statutes, Section 1350 – 1421 – Oklahoma Sales Tax Code
- Oklahoma Administrative Code 710:65 – Sales and Use Tax Rules
The Oklahoma Tax Commission website provides full access to statutes, regulations, and guidance.
Important areas covered include:
- Taxable goods and services
- Exemptions
- Seller registration and collection requirements
- Filing and payment procedures
- Interest and penalties
Oklahoma businesses should consult these resources to ensure understanding of and compliance with all sales tax laws and rules. Consulting a tax professional is advisable for complex issues.
Sales Tax FAQ
1. Do I need to collect sales tax on shipping charges in Oklahoma?
Yes, if the product being sold is taxable, delivery and shipping charges are also considered taxable in Oklahoma. The sales tax rate applies to the total sales price, including shipping.
2. When is returned merchandise subject to sales tax in Oklahoma?
If the full sales price including tax is refunded on the returned item, no additional sales tax is due. If only a partial refund is given or store credit provided, applicable sales tax must be collected on the amount retained by the seller.
3. How often do I need to file Oklahoma sales tax returns?
Return filing frequency depends on your total state sales tax liability: monthly for $2,500+ in state tax per month; quarterly for $100-$2,499 per month; and annually if less than $100 per month.
4. What records do I need to keep for Oklahoma sales tax purposes?
You must keep detailed records of all taxable sales, exempt sales, taxes collected/remitted, and sales tax returns for at least 3 years. Keep copies of receipts, invoices, exemption certificates, and returns.
5. Do non-profit organizations need to register and collect Oklahoma sales tax?
Most non-profits can apply for a sales tax exemption in Oklahoma. Once approved, they do not need to collect/remit sales tax but must still register and file $0 returns periodically.
Conclusion
Oklahoma’s statewide 4.5% sales tax rate, along with additional local taxes, means understanding Oklahoma sales tax compliance obligations is crucial for businesses making taxable sales in the state.
Key requirements include obtaining a sales tax permit, charging all applicable state and local taxes on taxable goods and services, accurately filing returns, and remitting collections on time. Both online and brick-and-mortar sellers must collect Oklahoma sales tax if they have sales into the state.
Exemptions provide tax relief on certain goods like groceries and services like medical care. Proper documentation is required to claim valid exemptions.
Use resources like online calculators, tax agency websites, and software to simplify rate determination, taxability rules, filing, and recordkeeping. Consult a tax professional for guidance on more complex sales and use tax issues.
Stay up-to-date on any Oklahoma sales tax rate or legislative changes that could impact your filing obligations. With some care taken to understand the rules, Oklahoma sales and use tax compliance can be managed effectively.
