Green Country business call new tax step forward

Posted at 6:52 PM, May 19, 2016
and last updated 2016-05-19 19:52:37-04

At Fleet Feet Sports in the Blue Dome District, the staff is familiar with people trying on shoes, but then buying them online.

"It is actually called show-rooming. There is a term for it in the industry," co-owner Lori Dreiling said. "They show room you. They come in, use your services and then they go buy online."

One reason for turning to online sales in Oklahoma, customers don't have to pay sales tax if the online business doesn't have a physical presence in the state. For Fleet Feet, they notice it on their yearly sales. 

"Anywhere from 10 to 20 percent of our sales," Dreiling said. "It is significant and we aren't alone in that number."

But on Thursday, leaders from several Green Country communities gathered at Fleet Feet to celebrate the new Oklahoma Retail Protection Act. Governor Mary Fallin signed the act into law earlier in the week.

The act asks online retailers to start collecting sales tax at the time a customer makes a purchase, or send the customer a notice to pay the sales tax on their yearly state taxes.

Tulsa Mayor Dewey Bartlett said right now the loss of sales tax revenue is not only hurting businesses, but also Green Country governments.

"For the city of Tulsa, it is estimated that 15 to 20 million dollars on an annual basis isn't paid that should be paid by those Internet sellers," Bartlett said. 

The loss is important to note the mayor said, because of how local Oklahoma governments pay their bills with sales tax revenue compared to other states. 

"That is the only source of revenue that we can look for as far as taxes go," Bartlett said. "We are the only state in the union that has that requirement, so we are different."

At J's Hallmark near 51st and Sheridan, show-rooming can also be an issue.

"You could do that, but by doing that you would be hurting our business," manager Lisa Spunaugle said.

Before the governor signed the Oklahoma Retail Protection Act, Spunaugle said they faced the same battle Fleet Feet and many other businesses have been fighting at the register.

"We have people that purchase gifts all the time," Spunaugle said. "They take it home with them. They go online, find it cheaper and then they turn around and bring it right back."

The concern for businesses, the new law is voluntary.

"Doesn't have enough teeth, can't be enforced," Dreiling said. "So if it is still voluntary, how many people are going to pay their taxes?"

Leaders from several Green Country communities and the Tulsa Regional Chamber of Commerce said Thursday they will now push lawmakers in Washington, D.C. to pass a federal online sales tax law. 

The law Fallin signed this week takes effect November 1, 2016. 

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