Loophole uncovered in Oklahoma’s new online sales tax law

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OKLAHOMA CITY - Eight in 10 Americans are now shopping online, according to Pew research.

Every year, that number goes up as more and more people are choosing the World Wide Web for convenience or price.

Oklahoma taxpayers saw big changes to e-commerce this year with the introduction of a new law that affects online shoppers.

The law went into effect on May 1.

Online retailers must now collect sales tax at the time of purchase, or send an end-of-the-year notification about taxes owed.

But, some online shoppers who started forking over sales taxes earlier this year have noticed a glitch.

"I mean, I order everything. I order mealworms for my chickens. I order cereal for my husband. I ordered Manwich yesterday," said Andrea Decker, the owner of 413 Family Farm. "Every day, I'm on Amazon."

Decker's ranch is nestled deep in Lincoln County and she says there is nothing that she won't buy online.

"We really don't have anywhere to go to get anything," Decker said. "So buying online makes perfect sense for us."

Decker is an "Amazon Prime" member, so she doesn't pay shipping on her Amazon orders, which arrive at the end of her driveway three or four times a week.

Starting March 1, Amazon started collecting sales tax from Oklahoma shoppers.

Decker stared noticing the taxes, but she says the amount was not always reasonable; sometimes as low as 1 percent and sometimes, no tax at all!

Amazon Prime shoppers Cody and Krista Crouch noticed the same thing.

"We've started seeing some tax charges on our Amazon orders, but not all of them," Krista Crouch said. "We get three to four shipments a week of Amazon products. There's been a couple items we've not been charged tax on."

The Crouches are young professionals with no free time to shop.

They're not deterred by the taxes, but they are confused about why some items seemed to be taxed and some don't.

State lawmaker Chad Caldwell authored the bill that became law of the land this year.

The Oklahoma Retail Protection Act could potentially generate tens or even hundreds of millions of dollars in additional revenue.

"No one likes to pay more taxes; you can count me in that group as well," Caldwell said. "But from a Tax Commission standpoint, it's been a tremendous success."

Caldwell is aware of the Amazon loophole, and so is the Oklahoma Tax Commission.

Oklahoma Tax Commission spokesperson Paula Ross says if your order comes out of an Amazon warehouse, expect sales tax to be charged.

However, if you purchase from a third-party, remote seller on Amazon, you may not be charged the tax.

"What people need to remember is if it's from a remote seller, that's a little more difficult for us to determine what's going on. But I think eventually everyone will be on board with it," said Ross.

So far, 22 of the top 25 online retailers are on board with collecting sales tax.

Millions are now trickling into state coffers.

The commission won't comment on how much Amazon has remitted.

"I can't talk about specific companies, but we have had millions of dollars come in from internet companies that will assist local communities," Ross said.

So far, despite a few sales slipping through the cracks, the effort to level the playing field seems to be working.

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