STATE OF OKLAHOMA

1st Session of the 53rd Legislature (2011)

SENATE BILL 883	By:	Crain

AS INTRODUCED

An Act relating to sales tax; amending 68 O.S. 2001, Section 1371, as amended by Section 15, Chapter 412, O.S.L. 2010, which relates to collection of county sales taxes; modifying requirement to enter into certain contracts; and 68 O.S. 2001, Section 2702, as last amended by Section 16, Chapter 412, O.S.L. 2010 (68 O.S. Supp. 2010, Sections 1371 and 2702), which relates to collection of municipal taxes; modifying requirement to enter certain contracts.

SUBJECT:  Sales tax
BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
SECTION 1.     AMENDATORY     68 O.S. 2001, Section 1371, as amended by Section 15, Chapter 412, O.S.L. 2010 (68 O.S. Supp. 2010, Section 1371), is amended to read as follows:
Section 1371.  Any sales tax levied by a county pursuant to the provisions of Section 1370 of this title shall be paid by the consumer to the vendor.  The board of county commissioners and the Oklahoma Tax Commission shall are authorized to enter into a contract whereby the Tax Commission shall have authority to assess, collect, and enforce the sales tax, and any penalties or interest thereon, levied by such county, and to remit the same to the county.  Such assessment, collection, and enforcement authority shall apply to any sales tax, and any penalty or interest liability existing at the time of contracting.  Upon contracting, the Tax Commission shall have the power of enforcement of the sales tax, and any penalties or interest that are vested in the county.  The contract shall provide for the assessment, collection, and enforcement of the sales tax, and the penalties or interest, in the same manner as the administration, collection, and enforcement of the state sales tax by the Tax Commission.  For providing such collection assistance, the Tax Commission shall charge the county a fee of one percent (1%) of the gross collection proceeds.
The Tax Commission shall place all sales taxes, including penalties and interest, collected on behalf of a county pursuant to the provisions of this section in the Sales Tax Remitting Account as provided in Section 1373 of this title.  As used in this section and Sections 1372, 1373 and 1374 of this title, “sales tax” includes any tax imposed pursuant to the provisions of Section 1 1370.9 of this act title.
SECTION 2.     AMENDATORY     68 O.S. 2001, Section 2702, as last amended by Section 16, Chapter 412, O.S.L. 2010 (68 O.S. Supp. 2010, Section 2702), is amended to read as follows:
Section 2702.  A.  The governing body of any incorporated city or town and the Oklahoma Tax Commission shall are authorized to enter into contractual agreements whereby the Oklahoma Tax Commission shall have authority to assess, to collect and to enforce any taxes or, penalties or interest thereon, levied by such incorporated city or town, and remit the same to such municipality.  Said assessment, collection, and enforcement authority shall apply to any taxes, penalty or interest liability existing at the time of contracting.  Upon contracting, the Oklahoma Tax Commission shall have all the powers of enforcement in regard to such taxes, penalties and interest as are granted to or vested in the contracting municipality.  Such agreement shall provide for the assessment, collection, enforcement, and prosecution of such municipal tax, penalties and interest, in the same manner as and in accordance with the administration, collection, enforcement, and prosecution by the Oklahoma Tax Commission of any similar state tax except as provided by agreement.  The municipality shall agree to refrain from any assessment, collection, or enforcement of the municipal tax except as specified in the agreement.  Such agreement shall authorize the Oklahoma Tax Commission to retain an amount not to exceed one and three‑fourths percent (1 3/4%) as a retention fee of municipal tax collected for services rendered in connection with such collections; provided, if a municipality files an action resulting in collection of delinquent state and municipal taxes, the Tax Commission shall remit one-half (1/2) of the retention fee applied to the amount of such taxes to the municipality to be apportioned as are other sales tax revenue.  All funds retained by the Oklahoma Tax Commission for the collection services to municipalities shall be deposited in the Oklahoma Tax Commission Revolving Fund in the State Treasury.
B.  The Oklahoma Tax Commission shall place all sales taxes, including penalties and interest, collected on behalf of a municipality pursuant to the provisions of this section and all use taxes, including penalties and interest, collected on behalf of a municipality pursuant to the provisions of Section 1411 of this title in the Sales Tax Remitting Account as provided in Section 1373 of this title.
C.  Provided that the Oklahoma Tax Commission and the governing body of any incorporated city or town may enter into contractual agreements whereby the municipality would be authorized to implement or augment the enforcement, collection and prosecution of the municipal tax in those contracting municipalities and to provide for the satisfaction of refunds or credits to taxpayers.  Such agreements shall and are hereby authorized to provide that the municipality and the Oklahoma Tax Commission may exchange necessary information to effectively carry out the terms of such agreements.  The municipality, its officers and employees shall preserve the confidentiality of such information in the same manner and be subject to the same penalties as provided by Section 205 of this title, provided that the municipal prosecutor and other municipal enforcement personnel may receive all information necessary to implement or augment the enforcement and prosecution of municipal sales tax ordinances.
D.  Provided further that, upon the request of any incorporated city or town, the Oklahoma Tax Commission shall enter into contractual agreements with such municipality whereby the municipality would be authorized to implement or augment the enforcement, either directly or through contract with private auditors or audit firms, of the municipal tax.  Any person performing an audit shall first be approved by the Oklahoma Tax Commission and, once approved, shall be appointed as an agent of the Oklahoma Tax Commission for purposes of the audit.  Contracts with a private auditor or audit firm shall not be subject to the limitations of Section 262 of this title and shall and are hereby authorized to provide that the municipality, private auditors or audit firms and the Oklahoma Tax Commission may exchange necessary information to effectively carry out the terms of such agreements.  The municipality, its officers and employees and private auditors or audit firms may receive all information necessary to perform audits and shall preserve the confidentiality of such information in the same manner and be subject to the same penalties as provided by Section 205 of this title.  Municipalities conducting audits directly or by contracting for private auditors or audit firms pursuant to this subsection shall furnish to the Oklahoma Tax Commission the audit results and all relevant supporting documentation.  Further, such municipalities shall provide for the payment of private auditors or audit firms by deduction from the tax assessment resulting from the audit conducted by said private auditors or audit firms unless a municipality contracts with the auditor or audit firm for another method of payment.  Any municipal sales tax funds recovered as a result of the services provided under this subsection will not be included in calculating the retention fee retained by the Oklahoma Tax Commission pursuant to subsection A of this section.  The contracts authorized by subsection A of this section shall provide that the Oklahoma Tax Commission shall not have any obligations thereunder to any municipality that does not participate in an audit conducted under this subsection.
E.  Any sum or sums collected or required to be collected pursuant to a municipal sales tax levy shall be deemed to be held in trust for the municipality, and, as trustee, the collecting vendor shall have a fiduciary duty to the municipality in regards to such sums and shall be subject to the trust laws of this state.

53-1-8	JCR	1/20/2011 3:54:41 PM