Oklahoma Tax Commission Updating and Discussion New Topics. Tulsa Chapter of OSCPA Meeting October 19, 2018 Doubletree Hotel

Transcription

1 Oklahoma Tax Commission Updating and Discussion New Topics Tulsa Chapter of OSCPA Meeting October 19, 2018 Doubletree Hotel

2 Goal of our Discussion Today Responding to requests for information where to find on the OTC website. Who is responsible for what within the OTC? Oklahoma Marketplace Facilitator Law, Wayfair vs. S. Dakota what s next? HR 1 and the Oklahoma Return

3 OTC Web site Areas of Interest

4 OTC FAQ s

5 OTC News Room

6 OTC Online Service Options

7 OTC Organizational Chart Commissioners Executive Director Customer Service Revenue Administration Support Services Taxpayer Assistance Division Communications Division Tax Policy Division Motor Vehicle Division Human Resources Division Information Technology Division Central Processing Division Account Maintenance Division Ad Valorem Division Legal Division Management Services Division Compliance Division

8 Compliance Division Director Deputy Director Deputy Director Business Taxes Gross Production Income Tax Ind. & Corporate & Franchise Field Collections Support Services Field Auditors Payments Individual Inc. Tax Auditors NE Quadrant Taxpayer Service Reps Desk Auditors Return Processing & Matching Corporate Tax Auditors SE Quadrant Outside Collections Coordinators Review & Research Refund Audits NW Quadrant Notice To Show Cause SW Quadrant Protests Auditing Voluntary Disclosure Program SW Quadrant SW Quadrant

9 Compliance Staffing Audit Staff by Section Individual Income Tax Corporate Income Tax Estate Tax Sales/Use Desk and Field Gross Production CPA s part of totals above Support staff Collections Staff by Section In house collection and phone call Notice to Show Cause RCO in field Sweep and Rapid Response team

10 New Business Compliance Survey

11 Sales Closure Collections and Business Closure Collections Year Warnings Notices Closures Total Collections , $ 9,833, ,174 2,311 1,303 $ 18,733,032 SB 1984 November ,721 2,255 1,156 $ 24,157, HB 19, ,017 July 1, $ 24,271, ,603 3,516 1,738 $ 23,343,804 FTYD 5/ ,269 3,704 1,486 $ 23,381,357 Totals 105,243 15,264 7,199 $ 123,719,995

12 Sweep Teams

13 Audit Leads Prior to % of leads came from other audits % of our leads came from other audits balance from data analytics to current 90% our leads come from data analytics / discovery and 9% other audits / 1% call in leads or cities

14 Discovery Programs Income Tax Federal Match of AGI CP2000 Notice for underreported income EOAD (or RAR) Changes affecting AGI based upon examination by a Revenue Agent Validation of Credits taken by the taxpayer on the Individual Form Non-filers Business Tax Consumer Use Customs Data Sales Tangible Personal Property Oil & Gas and IRS form 4797 Sales IRS form 1099K Restaurants currently under review. Sales Validation of Exemptions taken on Sales Tax Return Income and Business Tax Withholding Non-filers Withholding Matching W-2/W-3 with Withholding account in OneLink Income Comparing 1099 and W-2 withholding to Individual Income Tax return withholding claimed.

15 Cash Collections Due to Discovery Programs up to 4/30/2018 Discovery Program Started Collected Cash Revenue Federal Match of AGI FY 2009 $13,693, CP 2000 Underreporters FY 2009 $84,530, EOAD (RAR) FY 2009 $32,388, Credit Validations (511-CR) FY 2017 $ 329, Non Filers FY 2013 $ 2,393, Consumer Use Tax Customs Data FY 2016 $ 283, Sales Tangible Personal Property Oil/Gas FY 2017 $ 12,218, Sales Review of Form 1099K Restaurants FY 2017 $ 1,879, Sales Validation of Exemptions Claimed FY 2017 $ 436, Withholding Non-filers FY 2017 $ 2,066, Withholding Non-payment W/2-W/3 FY 2018 $ 1,743, Withholding Validation 511 & 511NR FY 2019

16 Other Compliance Initiatives Voluntary Disclosure Program Have nexus and want to take care of your liability and filing requirements: Contact OTC Compliance and we have contracts set up to allow a company that has discovered they have nexus with Oklahoma to: File returns for the past three years Make the payment Receive a partial waiver of penalty and interest upon completion. FY agreements for $3,753, FY agreements for $2,230,252.78

17 Marketplace Facilitator HB1019XX A Market Place Seller (MPS) MPS uses MPF to sell TPP for a fee MPS fall under Quill but our HB1019 mitigates compliance. Next legislative session this will be corrected. Until then we recommend MPS collect and remit. B MPF will sell TPP of an MPS, collect the funds and remit to the MPS Market Place Facilitator (MPF) Contracts with MPS to list or advertise sellers TPP Directly or Indirectly collect payment from purchaser and transmits payment to MPS. Referrers do not collect payments. Referrer does not include electronic or published newspapers or internet advertising services unless it provides shipping terms and if seller charges STS. Other Website Other Website Referrer Other Website Referrers are paid a commission to refer, advertise, or list TPP of an MPS or MPF or other 3 rd party sites Buyer C Remote Sellers (RS) Out-of-State without Nexus in Oklahoma. MPS, MPF and RS will fall under Quill. No dollar thresholds like South Dakota law.

18 Marketplace Facilitator HB1019xx gives certain MPF, RS, Referrers the option of electing to: Collect and remit OR Notify their customers they may have use tax due and report their customers to the OTC annually. A Marketplace Facilitator who sells, lists, advertises TPP for sale in any forum, directly or indirectly collect payment from the purchaser & transmits that payment to the seller. Referrer receives consideration to advertise sellers products and transfers a buyer to the seller, facilitator. Remote Seller anyone else who does not maintain a place of business in Oklahoma but sells TPP in Oklahoma. In the FAQ s we go onto explain the threshold of $10,000, reporting, timing of annual reporting, changing the election, permitting, online reporting.

19 Start July 1, 2019

20 Wayfair vs. South Dakota Press Release Monday, October 15, 2018 Simplified Remote Seller Registration Now Available Any retailer who makes sales in the state of Oklahoma is now required to remit sales tax to the Oklahoma Tax Commission regardless of whether the company has a physical presence in the state. To make things easier, remote sellers now have the option of registering for a simplified sales tax reporting account through our Oklahoma Taxpayer Access Point (OkTAP). The process will only take five steps. To register, visit our website at tax.ok.gov and select the link to OkTAP. From there, click register and then New- Remote Seller Registration and follow the prompts. Those sellers who sell to multiple states remotely may choose to register through the Streamlined Sales Tax Registration System, at

21 FTA, SSTS, Remote Sellers How do states make it easier to implement the reporting and remitting for remote sellers? Everyone apply Streamline Sales Tax methodology Certified Service Providers (CSP s) who will process the sales and the report the tax due by jurisdiction Expand approved service providers (CSA s) What are the reporting thresholds? Oklahoma will probably be 200 x-actions & $100,000 Other states like California is $500,ooo Some are talking about somewhere in between and there is one group wanting $10,000,000 depending on how you define a small business. Even then remote sellers are wishing to change SSTS rules even more see handout.

22 Medical Marijuana Information for Medical Marijuana Sales Tax Permits With the recent passage of SQ788, Oklahomans may now be licensed as commercial growers, processors, or dispensaries. A permit from the Health Department is required prior to obtaining a sales tax permit and accounts from the Oklahoma Tax Commission. Applications for sales tax permits that are received without this information cannot be processed. For draft rules of the process to obtain a license and additional information, visit the Health Department website at: Tax Commission provides a Sales Tax Permit. NO Compliance activities other than making sure those stores selling have a permit. Also, stores not just selling medical marijuana, but also selling TPP are collecting, reporting and remitting on those sales.

23 HR 1 Federal Tax Law Change Form 511 Changes

24 2018 Form 511 Line last year adding 10C + exemptions OR amount on Sch 511-D line 5 which was the total allowable deductions and exemptions. Oklahoma Itemized deductions has changed. Last year we separated out 10A Fed. Itemized Deduction from Fed Sch A line 29 10B State and Local Income Tax 10C OK Itemized Deductions (sum of 10 A minus 10 B = 10C OR Ok. Standard Deductions.

25 What s Different? Lines 10A-10C 2017 Form A-Fed Itemized Sch A Line B-Less: State and Local Sales or Income Taxes 10-C-A-B or Oklahoma Std Ded. Single or MFS-$6,350; MJF or Qualified Widow(er)- $12,700 Schedule 511-A Oklahoma NOL (no schedule required) Schedule 511-D Was Deductions & Exclusion Schedule 511-E Schedule 511-F Schedule 511-G 2018 Form 511 Replaced with Oklahoma Itemized Deductions Schedule 511-D or Standard Deductions (Same amounts found in 2017) Line 14 now includes Oklahoma Installment payments 4 in box. Schedule 511-A Must provide a schedule now. Schedule 511-D Now Oklahoma Itemized Deduction worksheet. Schedule 511-D is now E Schedule 511-E is now F Schedule 511-R is now G We have added 511-H

26 2018 Form 511 page 2

27 2018 Form 511 page 3 Needing the schedule to be attached for the Oklahoma net operating loss.

28 2018 Form 511 page 4 All New

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30 Notes of Interest E-filing using Vendor Software: Oklahoma will only accept linked (Fed/State) returns for tax year Unlinked (state only) returns will not be accepted. Taxpayers who fall below the federal filing requirement may want to e-file their federal return to claim a refund of any federal income tax withheld or claim a refundable credit (earned income credit, additional child care credit or American opportunity credit.) These taxpayers would then be able to e-file their Oklahoma return as well.

31 Notes of Interest - 2 E-filing using OkTAP: Most resident taxpayers who are not filing a federal return, but are required to file an Oklahoma return will qualify to e-file via OkTAP. OkTAP supporting income reported on the following forms: W-2, W-2G, 1099-G, 1099-Misc and 1099-R. Our retirement/social security exclusions may be taken as well as the following credits: Child care/child tax credit, earned income credit, sales tax relief credit (form 538-S0 and property tax credit (form 538-H)

32 QUESTIONS? ok.gov