Oklahoma – OK Sales Tax Calculator: User Guide

Oklahoma, also known as the Sooner State, is a state located in the South Central region of the United States. The state shares its borders with Arkansas on the east, Missouri, on the northeast, New Mexico on the west, Kansas on the north, Texas on the south and west, and Colorado on the northwest.

This state is 28th-most populous, and the 20th-most extensive state among 50 states, and Oklahoma City is its capital and largest city.

Oklahoma attracts hundreds of people to settle in the state every year due to its cheapest housing, Low cost of living, flourishing economy, favorable business environment, and plenty of other attractive selling points.

Are you mulling over to start, expand, or relocate your business to Oklahoma? Well, You are in the right place. This Oklahoma Sales Tax guide will walk you through all the essentials of the OK sales tax that you are going to need while working in the state. So let's get started!

Oklahoma Sales Tax Facts:

• Oklahoma state levies the 15h-lowest rate in the country of 4.5%, which is charged on the state level. Additionally, local sales tax is also charged by counties at 0% to 3% and cities at 0% to 5.1%. So the combined sales tax rate charged in OK state is one of the highest in the country as high as 7%.
• Hallett, Oklahoma, is among cities that charge the highest possible combined sales tax rate of 11%.
• Newalla, Oklahoma, is among cities that charge the lowest possible combined sales tax rate of 4.5%.
• Besides most goods, Oklahoma state also collects sales tax on some services, including hotel rooms, health club dues, printing services, telecommunications, advertising, and admissions tickets (i.e., sporting events or movies).
• Unfortunately, groceries and any other kind of food is fully taxed in Oklahoma State. However, Low-income taxpayers can claim Grocery Tax Credit up to $40 per household member.
• Sales to businesses that resell the items, most services, newspapers and advertising space, gasoline and other fuels, sales by selected nonprofits, and residential utilities (exempt from state tax only) are exempted from Oklahoma Sales Tax.
• Oklahoma has a sales tax holiday usually held on the first weekend of August, where clothing and shoe purchases under $100 are exempt from sales tax.
• Items purchased for goods for resale, improvement, or as raw materials by the individuals and companies can be exempted from sales tax using Oklahoma Sales Tax Exemption Form.
• Items purchased outside of Oklahoma and brought and consumed within the OK state in situations when no sales tax was charged supposed to be subjected to Oklahoma Use Tax, which is charged at an equal rate as Sales tax.

How to calculate Sales Tax in Oklahoma?

Businesses and Sellers who have Nexus are required to pay Sales tax to Oklahoma on retail sales of tangible personal property and some services. They must collect, manage, and transfer it to the Oklahoma Tax Commission while staying in compliance with state laws and avoid penalties and interest.

The sales tax determined on four factors:

1. Nexus: It is a connection of business with a state. The business is only liable to pay taxes to the states with Nexus.
2. Location and Products or Services: The sales tax rate varies from product to product and location to location. You must check the sales tax rate applicable to your product according to the product category, county, and city in Oklahoma.
3. Exemptions: Almost All tangible goods and certain services are eligible for sales tax regulation. However, sales to businesses that will resell the items, most services, newspapers and advertising space, gasoline and other fuels, sales by selected nonprofits, and residential utilities (exempt from state tax only) are exempted from Oklahoma Sales Tax. You should check with the Oklahoma Tax Commission to update which goods and services sold in Oklahoma are subject to sales tax.

To calculate Sales Tax in Oklahoma, follow the steps below:

Step 1 – Determine your Nexus:

As a business owner, you are only required to collect sales tax if you are eligible for collecting sales tax and have Sales Tax Nexus in Oklahoma State. And to determine your Nexus in Oklahoma, you must have any of the following:

• Having a place of business places like an office in the state
• An employee, independent contractors, salespeople, or other representatives present in Oklahoma for conducting its business.
• Delivery of merchandise into Oklahoma by means other than common carrier, i.e., taxpayer-owned vehicle.
• Having goods in a distribution center, a warehouse, or another place of business.

Step 2 – Determine the Sales Tax Rate:

Once you have determined that your Nexus is with Oklahoma, next is to deduce the Sales Tax rate (State + Local Sales Tax) applicable on your product, for which you can refer the tables below:

Oklahoma Sales Tax Rates by Location:

Once you have determined that your Nexus is with Oklahoma, next is to deduce the Sales Tax rate (State + County + City) applicable to your product, for which you can refer the tables below:

Step 4 – Calculate Sales Tax:

After determining the sales tax rate according to the location and type of purchases, it is easy to calculate the sales tax amount charged on the product and gross price (amount after tax) of a product.

Example # 1:

For instance, you are selling Guitar on your store in Newalla, Oklahoma, having a net price tag of $120. The amount that a buyer has to pay (including sales tax) on a check out would be:

Manual Method:

Net Price (amount before Tax) of a Guitar: $120

Total Sales Tax rate: 0.00% (Newalla) + 0.00% (Oklahoma County) + 4.50% (Oklahoma State) = 4.50%

Total Sales Tax amount = $120 x 4.50% = $5.4

Gross Price (Amount after Tax) = 120 + 5.4 = $125.4

It means the buyer has to pay $125.4 for a Guitar on a cash counter.

Using our Sales Tax Calculator:

All of the steps mentioned above can be skipped to get an instant result using our Sales Tax Calculator. All you need is:

1. Input the $120 Net Price of the Guitar as Amount Before Tax
2. Input or select 50% of the combined Sales Tax rate on the Tax Rate menu.

Our calculator will automatically calculate the result, and represents it in 3 different forms, as shown in the image below:

Reverse Sales Tax Calculation

In the example above, we have explained to you to calculate the Sales Tax amount payable in a product, and the Gross Price of the Product.

But there are also instances when you are required to deduce how much sales tax buyer has actually paid on a product or you may want to check the accuracy of the sales tax indicated on your item's receipt.

This is where the Reverse Sales Tax Calculation Kicks in. And luckily, our Oklahoma Sales Tax Calculator can perform this calculation like a Pro.

Example:

Your buyer has paid $500 for a Piano at your store in Kettering, Oklahoma. Now the buyer is inquiring how much a Piano actually cost before the sales tax was added. So you need to follow the steps below to determine the amount before tax (net price) of a Piano:

Gross Price (Amount after Tax) of Piano: $500

Total Sales Tax rate: 3.50% (Muldrow) + 1.417% (Sequoyah County) + 4.50% (Oklahoma State) = 9.417%.

Manual Method:

Gross Price with sales tax = [Net Price × (tax rate in decimal form + 1)]

500 = [Net Price x ((9.417/100) + 1)]

500 = Net Price x 1.09

$458.7 = Net Price

So the original Price (net price) of a Piano was $458.7.

Using our Sales Tax Calculator:

You can also use our Sales Tax Calculator for Reverse Sales Tax calculation to skip the aforementioned manual method. All you need is:

1. Input the $500 Gross Price of Piano as Amount after Tax
2. Input or select 9.417% of combined Sales Tax Rate on the Tax Rate

Our calculator will automatically calculate the result and represents it in 3 different forms.

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