Urging Online Sales Tax Collection, OK Biz Community Goes to Washington

• Joe Wertz
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  Joe Wertz was a reporter and managing editor for StateImpact Oklahoma from 2011-2019. He reported on energy and environment issues for national NPR audiences and other national outlets. He previously worked as a managing editor, assistant editor and staff reporter at several major Oklahoma newspapers and studied journalism at the University of Central Oklahoma.

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Oklahoma City Mayor Mick Cornett said online retailers that don’t collect sales taxes cost his city $10 million to $15 million each year, according to The Oklahoman.

The Oklahoma business community is joining the effort to force Internet retailers to collect sales taxes for states and cities.

Lawmakers and business officials are exerting pressure in Washington, D.C., reports The Oklahoman’s Chris Casteel:

Early this year, Oklahoma City Mayor Mick Cornett told President Barack Obama at a White House meeting that he should get behind federal legislation to help cities get sales tax revenue.

And last week, the State Chamber of Oklahoma sent a letter to all the members of Oklahoma’s congressional delegation that said the current system is unfair to brick-and-mortar stores, The Oklahoman reported.

“By offering services that online retailers cannot, local businesses can and are willing to compete with their online only competitors as they do with other local businesses,” the letter says, according to The Oklahoman. “What Oklahoma businesses cannot compete with is an inequitable tax policy that favors one kind of retailer over another.”

Rep. John Sullivan, R-Tulsa, said he was sympathetic to small business owners but was still studying the issue, according to the The Oklahoman report, which noted that the lawmaker has been lobbied by Walmart. The Arkansas retailer has been a “driving force” behind federal legislation introduced by 10 senators last week that would give states the authority to require online retailers to collect sales tax.

Amazon.com, which agreed with California state officials in September to collect and remit sales taxes in 2012, “strongly supports” the legislation, but eBay said the bill “fails to protect” small businesses who use the Internet, according to The Oklahoman report.

For five years, Oklahomans have been asked to self-report purchases they made from retailers that don’t collect Oklahoma sales taxes. Citing a University of Tennessee Study, Oklahoma Tax Commission spokeswoman Paula Ross said Oklahoma could be losing $185 million to $225 million in such tax revenues each year.

Nationally, it is estimated that $23 billion is owed, The Oklahoman reported.

In an article by nonprofit journalism outfit Oklahoma Watch, which was published in Sunday’s Tulsa World, reporter Ron J. Jackson Jr. added to the so-called “E-fairness” debate.

Oklahoma Watch interviewed a business owner whose customers have left her store, announcing their intention to purchase online to avoid paying the sales tax.

Detractors — mostly conservatives — argue the collection of Internet taxes is simply another way of saying “new tax.” They oppose such an action as was evidenced in April when the State House defeated Senate Bill 744 – a measure that extended Oklahoma’s involvement in an interstate compact that used the Streamlined Sales and Tax Agreement model to collect taxes due from direct mail, Oklahoma Watch wrote.