Oklahoma Lost out on $45M in Sales Tax Due to Amazon Sales in 2014
A new report confirms what local officials in Oklahoma have been saying for some time: Internet retail sales are eating away at sales tax revenues.
Two-man firm Civic Economics estimated e-commerce giant Amazon’s 2014 U.S. sales, allocating a proportional amount to each state. That allowed them to calculate a gap between state sales tax rates and what Amazon collects.
Oklahoma’s gap is the nation’s fifth-largest at $45 million.
"That $45 million is the state total, based on the average mix of sales across the state," Houston said. "So, Tulsa's share of that is going to be roughly proportional to Tulsa's share of total retail sales in the state."
Worth noting: The analysis only covers Amazon’s sales.
"It's very hard to know what the total gap is because there are plenty of online retailers you can buy from that do not have a presence here in Oklahoma and, therefore, will not add sales tax to the transaction," Houston said.
Houston estimated Amazon sold $512 million worth of goods here in 2014. He said with Amazon's expansion of its Prime Now program, it may have to establish a physical presence in more states, including Oklahoma.
"One would hope that this is a fight that they're about to quit having all over the country, but a better solution is for Congress to change the way we assign Internet sales tax so that you don't have to have a physical presence in the state to be subject to state sales tax," Houston said.
According to the Civic Economics report, Oklahoma also has the country's second-largest per-household tax loss from Amazon sales in 2014: $32.95.