Oklahoma Passes Nexus Presumption Bill

The governor of Oklahoma has signed HB 2359 effective June 9, 2010 which amends the definition of retailer to include remote retailers who are owned by a retailer maintaining a place of business in Oklahoma if the local retailers holds a substantial interest (greater than 10% ownership) and the local retailer sells the same or substantially similar line of products as the remote retailer using the same or substantially similar name. Other specific provisions apply that could establish nexus and therefore a collection responsibility on the remote seller. Additionally, the bill requires remote retailers that are not required to collect tax in Oklahoma to provide notice to customers that use tax applies to the purchases. Retailers are prohibited from advertising that sales tax does not apply to the purchases. The Oklahoma Tax Commission is working on a draft of an emergency rule that would dictate how certain internet and catalog retailers give notice of use tax requirement to customers in Oklahoma. If the retailer does not provide an invoice, a confirmation e-mail containing the notice would be considered sufficient. Online auction websites would also be affected by the proposed rule. The rule’s requirements would not apply to retailers with total Oklahoma gross sales of less than $100,000 in the prior year and the reasonable expectation of less than $100,000 in sales in the current year. The requirements outlined in the proposed rule would not take effect until an emergency or permanent administrative rule is passed. (HB 2359, Press Release, Oklahoma Tax Commission, June 30, 2010)

For an update on this news item, see Oklahoma Enacts Affiliate Nexus and Reporting Requirements Changes.

Posted on August 17, 2010