Most businesses starting in Oklahoma that are selling a product or offering certain services will need to register for a sales tax permit. This is commonly referred to as a seller’s permit, sales tax license, sales tax number or sales tax registration.
The sales tax permit is obtained through the Oklahoma Tax Commission as a part of applying for an Oklahoma Business Registration.
Check out the rest of this guide to find out who needs a sales tax permit, what products and services are taxable, how to register for a permit and reporting requirements.
Who needs a sales tax permit in Oklahoma?
A business must register for a sales tax permit in Oklahoma when:
- A business has “nexus” (significant presence in the state) such as a retail store, office or warehouse where products are produced, stored and/or delivered
- Selling products and taxable services in Oklahoma (includes occasionally selling items at craft shows, fairs, seminars, shows, etc.)
- Employees (including sales representatives or agents) are working in Oklahoma
- An online business located in Oklahoma is selling taxable products to Oklahoma
- An out-of-state business selling at least $100,000 in taxable products to Oklahoma residents.
What products and services are taxable in Oklahoma?
There are a few exceptions, but almost all physical products are taxable when sold at retail in Oklahoma. Common examples include:
- General merchandise like furniture, appliances, and clothing
- Titled or registered items like vehicles
Certain agriculture products and equipment in addition to prescriptions are tax exempt.
Labor in most cases isn’t taxable in Oklahoma. For instance, let’s say you broke the screen to your cell phone and take it to a cell phone repair shop to have it fixed. Sales tax would be added to the selling price of the new screen and any additional parts to fix the phone. The labor to replace the screen isn’t taxable. However, a business that makes furniture will indirectly have sales tax on labor. In this instance, let’s say this business is building a dining room table for a customer. Through labor, the pieces of wood are shaped, sanded and painted to build this piece of furniture. While the labor isn’t directly taxable, sales tax is charged to the final selling price of the table.
Digital products are exempt from sales taxes in Oklahoma.
Most services aren’t taxable in Oklahoma, however there are a few exceptions, some of which include:
- Short-term lodging
- Printing and advertising (except in newspapers, periodicals, and on billboards, as well as any advertising through the electronic broadcast media, including radio, television and cable television)
- Transportation and auto parking
- Admission fees
How to register for a sales tax permit in Oklahoma
A sales tax permit can be obtained by registering online through the Oklahoma Taxpayer Access Point.
Information needed to register includes:
- Contact information
- Legal business name
- Doing Business As name (if applicable)
- physical address, mailing address, phone
- Type of business entity (Sole Proprietorship, Partnership, Corporation, LLC)
- Federal Employer Identification Number (FEIN), or SSN if a sole proprietorship with no employees
- Names and addresses of owners/officers/members
- Description of what products or services are being sold
How much does a sales tax permit cost in Oklahoma?
Sales tax permits in Oklahoma cost $20 for the first location and $10 for each additional location.
How long does it take to get an Oklahoma sales tax permit?
Expect up to five days to process the sales tax permit.
Do you have to renew your Oklahoma sales tax permit?
The sales tax permit is renewable every three years from the date it was issued. Be mindful that if any information about the business changes such as the mailing address, additional locations or change in ownership, those changes need to be updated with the Tax Commission.
Sales tax reporting
How is sales tax collected?
When a business makes a sale of a taxable product or service, the business charges the appropriate sales tax rate to the customer. This tax is collected by the business who then sends it to the Oklahoma Tax Commission.
How much sales tax is charged?
The sales tax rate that is charged varies depending on the address of the business if the purchase is made in the store. When shipping in-state, the sales tax is based on the address of the purchaser.
In addition to the statewide tax, there are additional sales taxes that may be added by cities, towns, counties and municipalities. To find sales tax rates, see the sales tax rate locator from the Oklahoma Tax Commission.
When are Oklahoma sales tax returns due?
The Tax Commission will determine a filing frequency based on the expected volume of sales, which will be monthly, quarterly or semi-annually. Most businesses will file monthly.
Filings are due the 20th day of the month following the reporting period, unless the 20th falls on a weekend or federal holiday, in which case would move to the next business day.
Even if the business had no sales during the reporting period, a filing is still required indicating no sales occurred.
Sales tax on purchases for resale
A business is able to purchase items to resell without paying state sales tax. The tax liability is passed from the wholesaler or distributor to the retailer who will then charge sales tax to the end user of the item.
Wholesalers and distributors will require a sales tax number and a completed Oklahoma Resale Certificate to document the items being purchased are for resale.
If you have questions about the sales tax permit, the Oklahoma Tax Commission has an FAQ on sales taxes in Oklahoma or they can be contacted by calling 405-521-3160