Sales and use tax; authorizing deduction of sales tax due for compliance expense. Effective date.
Impact
The legislation represents a significant change in tax policy for businesses in Oklahoma, particularly benefiting small vendors who may struggle with the costs associated with tax compliance. By easing the financial burden of complying with tax regulations, SB898 aims to promote better adherence to tax laws and support local businesses in maintaining accurate records. The effective date for this bill is November 1, 2021, after which businesses can start to implement the provisions outlined.
Summary
Senate Bill 898 aims to provide tax relief for sellers and vendors in Oklahoma by allowing a deduction from sales and use taxes for compliance expenses. Under this bill, sellers or vendors can deduct 2% of the tax due when keeping sales tax records, filing reports, and remitting the tax. However, this deduction will not apply if the seller is delinquent in their tax obligations, except in cases where the Oklahoma Tax Commission identifies delays caused by natural disasters with a presidential major disaster declaration. Additionally, the bill limits the total deduction to a maximum of $3,300 per month for each sales tax permit holder.
Contention
While the bill is likely to find support among the business community, there may be concerns regarding its implications for tax revenue and compliance. Legislators and stakeholders may debate the fairness of such deductions and how they impact the overall tax collection by state authorities. Opponents might argue that granting deductions could lead to reduced revenue for public services, which rely on consistent tax income. Furthermore, the criteria for allowing deductions in the case of tax delinquency could be scrutinized for reasons of accountability and fair enforcement across all sellers and vendors.