Oklahoma Enacts Use Tax Amnesty Program

Oklahoma Governor Brad Henry has signed legislation enacting a use tax amnesty program. Under the legislation, amnesty initiatives are to be established by the Oklahoma Tax Commission for both out-of-state retailers and for Oklahoma consumers. Under the “Retailer Compliance Initiative” the commission will not seek payment of uncollected use tax from out-of-state retailers that register to collect and remit use tax on sales made to Oklahoma purchasers before registering under the initiative if the retailer was not registered in Oklahoma in the 12 months preceding June 9, 2010. Registration in the program will prevent an assessment for uncollected use tax, penalties, and interest for sales made during the period the retailer was not registered in Oklahoma. Registration must occur before July 1, 2011. The tax relief is effective as long as the retailer continues registration and collects and remits use taxes for at least 36 months. Relief only applies to use taxes due from registrants in their capacity as a retailer, not as a purchaser. The relief is not available to any retailers that have received notice of an audit, and for which the audit is not finally resolved. Relief does not apply to use taxes that have already been paid or remitted to the state, to use tax that has been collected but not yet remitted, or in cases of retailer fraud or misrepresentation of a material fact. Registration in the amnesty program will not be used as a factor in determining nexus in regards to any other Oklahoma taxes at any time. Out-of-state retailers that voluntarily register in the program will not be charged a registration fee and will receive a discount for reporting and remitting use taxes in a timely manner. The Oklahoma Tax Commission is directed to establish a “Consumer Compliance Initiative” as well. Under this initiative, if a taxpayer voluntarily files delinquent returns and pays the outstanding use tax during the initiative, penalties, interest, and other collection fees due will be waived. Use taxes will not be assessed for any period more than one year prior to the date that the taxpayer registers to pay use taxes under the initiative. The relief is not available to any taxpayers that have received notice of an audit, and for which the audit is not finally resolved. Relief also does not apply to use taxes that have already been paid or remitted to the state. The commission will also develop an internet portal that taxpayers can use to remit use taxes. (H.B. 2359, Laws 2010, effective June 9, 2010)

Posted on March 14, 2011