Oklahoma Cities Begin Tallying Online Sales Tax

Tuesday, May 16th 2017, 6:13 pm
By: Dana Hertneky

Pick any Oklahoma neighborhood and the smiley face boxes dot the porches of nearly every street. These boxes aren't just delivering goods from Amazon, but valuable income to municipal coffers.

On March 1, Amazon started collecting sales tax, and municipalities are getting their first checks.  

“We’re thinking on an annual basis it’s maybe $3 - $4 million a year,” said Doug Dowler, the Budget Director for Oklahoma City.

State law doesn’t allow cities to disclose exactly how much they get from a specific retailer.

Oklahoma City has begun a hiring freeze for police and firefighters as well as making cuts to city services due to declining sales tax revenue. The collection of sales tax from Amazon won't solve their budget problem, but it will help.

Dowler estimates sales tax from Amazon would bring in about .75 to 1% of total revenue.

“It’s a significant amount of money and we’re very glad to get that,” he said.

In Edmond, they haven't had to make any cuts so the $600,000 they expect to get from Amazon in the next year will enhance services.

“Clearly that will go toward our general fund. That will go towards police, fire, parks, roads,” explained Casey Moore, with the City of Edmond. “All those things, quality of life that are required for a city.”

Amazon may be the biggest on-line retailer but it's not the only one. Customers have to pay sales tax for any online business that has a physical store in Oklahoma, but not on the other stores.

Dowler said they are advocating for federal legislation that would require all on-line retailers to collect sales tax.

“Just to level the playing field with local entities and local businesses compared to the online businesses,” said Dowler.

Although Amazon collects sales tax, third party retailers who sell through Amazon aren't required to.