Earlier this month, Amazon began collecting Oklahoma sales tax on online purchases. Reactions to the change have been mixed. Local brick-and-mortar business owners are pleased because it levels the competitive price point. City officials are relieved to begin receiving revenue that was always due, but seldom collected.
Previously, Oklahomans were responsible for declaring online purchases and paying sales tax when they filed their state income tax return, but reports show only 4 percent did. An economic development consulting firm, Civic Economics, estimates that if Amazon had been collecting Oklahoma sales taxes in 2015, more than $56 million would have been collected. Based on self-reported purchases, the sales tax revenue was just a little over $2 million.
Responses from residents are understandably divided, but many Oklahoma residents don’t understand how important sales tax revenue is to our cities. Sales tax revenue is how cities fund core services: police and fire services, pothole repairs, parks and public transit.
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