TAX NEWS - 2010

Oklahoma Sales / Use Tax: New law imposes remote seller nexus requirements & related amnesty-type provisions

H.B. 2359, signed by gov. 6/9/10. Effective immediately, new law modifies the term "retailer" engaged in the business of selling tangible personal property for use in Oklahoma to include:

- A retailer that:
     . Holds a substantial ownership interest in (or is owned in whole or in substantial part by) a retailer maintaining a place of business within Oklahoma, and
     . Sells the same or a substantially similar line of products as the related Oklahoma retailer and does so under the same or a substantially similar business name, or the Oklahoma facilities or Oklahoma employees of the related Oklahoma retailer are used to advertise, promote or facilitate sales by the retailer to consumers, or

- A retailer that holds a substantial ownership interest in (or is owned in whole or in substantial part by) a business that maintains a distribution house, sales house, warehouse or similar place of business in Oklahoma that delivers property sold by the retailer to consumers.

Any retailer that is part of a controlled group of corporations, and that controlled group of corporations has a component member that is a retailer engaged in business in Oklahoma, is also presumed to be a retailer engaged in business in Oklahoma. Additionally, any retailer making sales of tangible personal property to purchasers in Oklahoma by mail, telephone, Internet or other media that has a contractual relationship with an entity to provide and perform installation or maintenance services for the retailer's purchasers within Oklahoma is considered a "retailer" engaged in the business of selling tangible personal property for use in Oklahoma.

Retailers/vendors making sales of tangible personal property from outside Oklahoma that are not required to collect Oklahoma use tax, must nevertheless provide "readily visible" notification on their retail Internet websites/catalogs and invoices that use tax is imposed and must be paid by the purchaser, unless otherwise exempt, on the storage, use, or other consumption of the tangible personal property in Oklahoma.

The law also authorizes the establishment of an "Internet Retailer Outreach Program" to contact potentially impacted remote sellers, as well as a related "Retailer Compliance Initiative" to provide impacted retailers with some amnesty-type relief from these new "doing business" nexus provisions. Another "Consumer Compliance Initiative" in the new law authorizes amnesty-type use tax relief for in-state consumers.