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SENATE FLOOR VERSION
February 17, 2025
SENATE BILL NO. 583 By: Rader
An Act relating to sales tax; amending 68 O.S. 2021,
Section 1368.3, which relates to noncompliant
taxpayer; modifying definition; expanding certain
requirements to avoid closure o f business and provide
defense to the closure of business; and providing an
effective date.
BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
SECTION 1. AMENDATORY 68 O.S. 2021, Section 1368.3, is
amended to read as follow s:
Section 1368.3. A. As used in this section, “noncompliant
taxpayer” means any taxpayer operating under a sales tax permit who,
within any consecutive twenty -four-month period, has failed to
timely file two reports or timely remit tax due for any two ( 2)
months, as required under the provisions of any tax law. Provided,
a taxpayer shall not be deemed noncompliant for nonpayment of income
taxes.
B. In addition to all other remedies provided by law for the
collection of unpaid taxes, the Oklahoma Tax Co mmission may close
the business of a noncompliant taxpayer, subject to the
administrative and judicial appeal procedures provided in this
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section, if the noncompliant taxpayer, within any consecutive
twenty-four-month period, fails to timely file three reports or
timely remit tax due for any three (3) months, as required under the
provisions of any tax law.
C. 1. The Tax Commission shall give notice to a noncompliant
taxpayer that the third delinquency in reporting or remitting tax in
any consecutive twen ty-four-month period will result in the closure
of the business. The notice must be in writing and delivered to the
noncompliant taxpayer by the United States Postal Service or by hand
delivery.
2. If the noncompliant taxpayer has a third delinquency in
reporting or remitting tax in any consecutive twenty -four-month
period after the issuance o f the notice provided in paragraph 1 of
this subsection, the Tax Commission shall notify the noncompliant
taxpayer by certified mail or by hand delivery that the bus iness
will be closed within five (5) business days from the date of the
delivery or attempted delivery of the notice unless the noncompliant
taxpayer makes arrangements with the Tax Commission to satisfy the
tax delinquency. When the fifth day falls on a Saturday, Sunday, or
legal holiday, the performance of the act is considered timely if it
is performed on the next succeeding business day that is not a
Saturday, Sunday, or legal holiday.
D. A noncompliant taxpayer may avoid closure of the business
by:
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1. Filing all delinquent reports and remitting the delinquent
tax including any interest and penalty; or
2. a. Entering into a payment agreement approved by the Tax
Commission to satisfy the tax delinquency , and
b. Filing all required reports and remitting all taxes
due for a consecutive twenty -four-month period.
E. The decision to close the bu siness of a noncompliant
taxpayer will be final and absolute if the noncompliant taxpayer
fails to request an administrative hearing as provided in subsection
F of this section.
F. 1. A noncompliant taxpayer may request an administrative
hearing concerning the decision of the Tax Commission to close the
business of a noncompliant taxpayer by filing with the Tax
Commission a written protest, signed by the noncomplian t taxpayer or
the authorized agent of the noncompliant taxpayer, stating the
reasons for opposing the closure of the business and requesting an
administrative hearing. The protest shall be timely if filed within
five (5) business days after the delivery o r attempted delivery of
the notice required by paragraph 2 of subsection C of this section.
2. A noncompliant taxpayer may request that an administrative
hearing be held in person, by telephone, upon written documents
furnished by the noncompliant taxpaye r, or upon written documents
and any evidence produced by the noncompliant taxpayer at an
administrative hearing. The Tax Commission shall have the
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discretion to determine whether an administrative hearing at which
testimony is to be presented will be con ducted in person or by
telephone. A noncompliant taxpayer who requests an administrative
hearing based upon written documents is not entitled to any other
administrative hearing prior to the date a decision is rendered by
the hearing officer.
3. The administrative hearing will be conducted by a hearing
officer appointed by the Tax Commission. The hearing officer will
set the time and place for a hearing and will give the noncompliant
taxpayer notice of the hearing. The noncompliant taxpayer may be
represented by an authorized representative and may present evidence
in support of the position of the noncompliant taxpayer.
4. The administrative hearing will be held within fourteen (14)
calendar days of receipt by the Tax Commission of the request for
hearing, as required in paragraph 1 of this subsection. The Tax
Commission shall give the nonc ompliant taxpayer at least five (5)
days’ notice of the hearing.
G. The defense or defenses to the closure of a business under
this section include written proof th at the noncompliant taxpayer:
1. Filed all delinquent returns and paid the delinquent tax due
including interest and penalty; or
2. a. Has entered into a written payment agreement, approved
by the Tax Commission prior to the hearing, to satisfy
the tax delinquency, and
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b. Has had no more than three (3) instances of untimely
filed reports or lat e tax remittances during a
consecutive twenty-four-month period.
H. 1. The decision of the hearing officer must be rendered in
writing with copies delivered to the noncompliant taxpayer by the
United States Postal Service or by hand delivery.
2. If the decision of the hearing officer is to affirm the
closure of the business, the decision shall be submitted in writing
and delivered by the United States Postal Servic e or by hand to the
noncompliant taxpayer.
3. The noncompliant taxpayer may seek judicial relief from the
decision of a hearing officer as provided in Section 225 of Title 68
of the Oklahoma Statutes for relief from a final order of the Tax
Commission.
I. The procedures established by this section are the sole
methods for seeking relief from a written decision to close the
business of a noncompliant taxpayer.
J. After being given notice of an order of closure of a
business pursuant to this section, it sh all be unlawful for any
person to continue to operate the business. If a person continues
or threatens to continue the unlawful operation of the business
after having received proper notice of the closure, upon complaint
of the Tax Commission, the person shall be enjoined from further
operating or conducting the unlawful business. In all cases where
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injunction proceedings are brought under this subsection, the Tax
Commission shall not be required to furnish bond. Where notice of
closure has been given in accordance with the provisions of this
section, no further notice shall be required before the issuance of
a temporary restraining order.
K. If a noncompliant taxpayer fails to timely seek
administrative or judicial review of a business closure decision
pursuant to this section, or if the business closure decision is
affirmed after administrative or judicial review, the Tax Commission
shall affix a written notice to all entrances of the business that:
1. Identifies the business as being subject to a busi ness
closure order; and
2. States that the business is prohibited from further
operation.
SECTION 2. This act shall become effective November 1, 2025.
COMMITTEE REPORT BY: COMMITTEE ON REVENUE AND TAXATION
February 17, 2025 - DO PASS