State Capitol, Oklahoma City – Senators Mike Johnson, R-Kingfisher, and Owen Laughlin, R-Woodward, have filed legislation to repeal a controversial and confusing new sales tax provision that places burdensome new filing requirements on small businesses.
“I thought this was a bad provision when I voted against it in May, and the reaction we’ve seen from small businesses confirms that thinking. The new burdens placed on small businesses far outweigh any benefits to the state, and that’s why we’re filing the legislation to repeal this legislative mistake,” stated Laughlin, who serves as a Republican Whip in the Senate.
“There is a consensus in the Senate Republican caucus that this provision needs to be taken off the books. Whether this happens in a special session or first thing in the regular session next February remains to be seen, but there is a pretty strong feeling among Republicans that this is bad for small business and needs to go,” said Johnson, the chairman of the Senate Republican Caucus. Johnson also voted against the measure.
“Most small businesses do not keep their accounting systems on a daily basis, and complying with the bill’s new split-month reporting requirements will be very burdensome and costly for small businesses,” Johnson said.
Johnson and Laughlin, members of the Senate Republican leadership team, said Senate Republican Leader James A. Williamson, R-Tulsa, and the rest of their GOP leadership colleagues have endorsed their effort to repeal the tax measure.
Johnson and Laughlin also called on Governor Brad Henry, who signed the legislation into law, to abandon support for the provision and to get on board the effort to repeal it.
HB 1593, a comprehensive tax package passed at the end of the last legislative session, contained the controversial sales tax provision. It lowered the threshold for businesses required to file electronic sales collections from $25,000 in tax collections to $2,500, and speeds up the collection schedule by requiring the submission of sales taxes for the last half of the previous month and the first half of the current month on the 20th of each month. Before the new law, businesses remitted their previous month’s sales tax collections on the 15th of the next month.