The City of Tulsa sues the State over new tax collection law

TULSA - The City of Tulsa plans to fight a new state law that prohibits cities from collecting their own sales tax.

Mayor Dewey Bartlett says the Oklahoma Tax Commission can't do the job effectively. So he wants someone else to do it. "The Oklahoma Tax Commission is severely under funded. It's under manned. And they are not able to perform their duties effectively in my opinion."

On Thursday the City of Tulsa filed a lawsuit against the state and the Oklahoma Tax Commission, asking a Oklahoma County District Judge to declare a portion of House Bill 2359 unconstitutional.

Bartlett and representatives from nearly a dozen other communities believe the Tax Commission is failing to collect revenue from some businesses and failing to go after violators. But city leaders say they can't prove it because the commission won't provide them with data.

Jenks Mayor Vic Vreeland says, "When you talk the Tax Commission, they really can't give you any answers. They will tell you they are understaffed. You don't get paperwork to back up everything. You just get a check every month and that is it. You don't know who isn't paying their taxes."

Mannford Town Administrator Mike Nunnley say the bill has tied cities hands when it comes to looking at other options. "Now you say we have to contract with the state to collect and enforce. And you do not collect and you do not enforce. And we are not allowed do it ourselves or to hire a private company."

A representative with the Tax Commission tells 2NEWS as part of the the passage of House Bill 2359, the agency is receiving additional funding that will allow to it hire more personnel, improve the data it provides to cities, and hire a third party collection agency to go after violators.

The City of Tulsa already signed a contract with an Alabama company to start collecting it's sales tax in January of 2011. Bartlett hopes the court will act quickly, so that can still happen.

The Mayor also plans to lobby state legislators to change the law when they return for the next legislative session.