Counselors to America's Small Business TAXES
SALES TAXES
All businesses are faced with paying taxes. Depending on location within or outside of city limits, you will be paying a state, city and a county sales tax on the goods you purchase, unless are tax exempted (meaning you have a tax exemption from the state and can purchase your goods at “wholesale”). Normally you will also collect sales taxes from your customers and forward them to the state. The Oklahoma Tax Commission will redistribute the taxes to the City and the County as required by law. The Tax Commission holds seminars throughout the year for new business owners and/or employees to learn about the procedures. A schedule of the seminars is posted on the Oklahoma Tax Commission website or you can call 405-521-3120 for information pertaining to businesses. The website link is www.oktax.state.ok.us. The state will collect all sales, use, and lodging taxes via monthly or quarterly submissions from you depending on your particular type of business and sales volume.
PAYROLL TAXES
Each week, month, or quarter you will submit via electronic filing your payroll taxes, if you have employees. Federal Withholding Taxes, State Withholding Taxes, Social Security, Medicare Taxes with the Employer’s matching payments and Employee State and Federal Unemployment Taxes are due to the State and the IRS.
Your bookkeeper or CPA will assist you in preparing these reports. Information concerning the Oklahoma unemployment insurance tax is available at the Oklahoma Employment Security Commission website. There you will find various links to employee and employer services, including Workforce Development.
Money held for Sales Tax, Withholding Tax, Social Security and Unemployment Tax payments must never be considered working capital. It is being held in trust for the government agency involved. The business owner is personally responsible for forwarding this money to the government.
PERMITS & LICENSES
Your city will possibly charge for permits and/or licenses depending on your type of business or trade. Permits will also be required for many activities and will vary from city to city. Larger cities will have a city department in charge of permits and collecting the fees. You must become familiar with the permitting processes of your particular city and county. At SCORE we have a brochure of the major contacts for the City of Tulsa and Tulsa County. The website for the City of Tulsa is www.cityoftulsa.org and the link to the permit departments is “Doing Business with the City”. The Permit Center is located at 111 Greenwood, Tulsa, Oklahoma 74120. The Permit Center also handles licensing of trades, and building stationary engineers as well as building inspections, signage, parking and various other permitting issues.
FRANCHISE TAX
If you are incorporated, you will file a Franchise Tax return each year by September with the Oklahoma Secretary of State. The franchise tax is based on your specific business financial statements from the previous tax year. The Secretary of State’s website is www.sos.state.ok.us , which provides links to forms and helpful discussions concerning incorporating and the incorporation process for Oklahoma. Concerning your options for the best legal form of business structure, we strongly recommend you consult an attorney and a CPA familiar with your situation.
PROPERTY TAX
You will normally be required to pay county property tax on real estate, equipment and inventory used in the business
SUMMARY
In summary, we strongly recommend that anyone going into business consult their accountant about the details and timing of the payments for these various taxes. Failure to report and submit taxes on a timely basis can lead to severe penalties.