Bloomberg reports that Oklahoma is the fifth highest taxed state for sales tax in the United States.  Rounding out the top 5 states are:

1. Tennessee

2. Arizona

3. Louisiana

4. Washington

5. Oklahoma

Oklahoma's combined state and average local sales tax rate is 8.66%.  Income tax in top brackets fell this year from 5.5% to 5.25%, but the sales tax remains high. 

Bloomberg was also appalled that Oklahoma and 7 other states tax groceries at the full sales tax rate.  Bloomberg would have further been appalled if they knew that grocery stores could not sell wine and liquor, but that's another story.

The lowest sales taxed states are 1. Alaska (no sales tax); 2. Hawaii (which has the highest income tax); 3. Maine; 4. Virginia; 5. South Dakota.

What does this mean to you, as a retail business owner?  Well, I think you know.  Oklahoma's push to lower the income tax out of existence means higher scrutiny on sales tax returns and aggressive enforcement action, including business closure, for Oklahoma businesses. 

The Oklahoma Tax Commission isn't giving an inch on sales tax, and I have personally seen the OTC threatening to shut businesses down and haul them to court for show-cause hearings for businesses delinquent by as little as one reporting period!  Most small business owners in this trap never call a lawyer to help them out.  Why? Because the OTC openly discourages them from doing so, under the guise of "helping" these people out.  It seems coincidental at best that the OTC holds a substantial amount of its hearings to shut businesses down in April (when tax professionals who could help these businesses are typically overloaded with tax preparation for other clients).

My law firm is a low volume practice that does not get bogged down during tax preparation season.  You need a local, licensed lawyer to handle the Oklahoma Tax Commission for state sales tax issues.  Don't fall for the OTC's routine.  They are not here to help you with a payment plan.  They are wolves dressed up like grandma, bulldogs with lipstick.  They are here to aggressively collect taxes or else.  If you let them in as your savior (then default), you could be held personally responsible for these business sales taxes.  Call Travis Watkins in Oklahoma City and Tulsa immediately if you have been contacted by an OTC sales tax case worker or if you have received a notice of a show-cause hearing. 405-607-1192.                   

Travis Watkins
Senior Tax Attorney
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