Oklahoma Evaluating New Economic Nexus Bills (H.B. 2352 and S.B. 513)

The Oklahoma House and Senate have recently introduced two separate economic nexus legislation bills that are currently being evaluated. These bills would override previous guidance provided by the Oklahoma Department of Revenue. Both of these bills would increase the threshold that sellers would need to meet in order to trigger economic nexus from $10,000 to $100,000. This is great news for online retailers, because it reduces the likelihood that small online businesses will have to collect and remit sales tax in Oklahoma.

What is economic nexus? Economic nexus simply means that a business can have a sales tax collection and remittance responsibility in a state, even if they do not have a physical presence there. Previously, the economic nexus threshold in Oklahoma was $10,000 but the state legislature is currently evaluating on increasing the threshold to $100,000 while creating a safe harbor for marketplace sales.

As originally drafted, the senate bill would:

  • require remote sellers with at least $100,000 in Oklahoma sales in a calendar year to collect tax the next fiscal year;

  • Exclude from this $100,000 Oklahoma sales where a marketplace facilitator or referrer collects tax for the remote seller (meaning, sales on Amazon, Walmart, and other marketplaces would not count towards the $100,000 threshold)

  • eliminate the need for remote sellers to choose between collection/remittance and notice/reporting requirements

  • Expand the definition to include marketplace facilitators and referrers that have in-state physical presence

  • make a marketplace seller’s lack of in-state physical presence irrelevant in calculating facilitator or referrer sales.

The house bill is very similar, except that it:

  • Would take effect on November 1st, 2019 rather than July 1st 2019
  • Require sellers who meet the $100,000 threshold to begin collecting and remitting the next calendar month (rather than next fiscal year)

We will continue monitoring these bills and provide an update if a new law is passed.

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