Oklahoma small business taxes

Pay Your Oklahoma Small Business Taxes

Most small businesses are required to pay state taxes. Learn about your Oklahoma business taxes and how we can help you stay compliant.

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If you own a small business in Oklahoma, you likely already know how important paying taxes is to staying legally compliant. Keeping track of all the federal, state, and local taxes that apply to your business can cause great anxiety, even for the most experienced business owners. But we are here to help. In this short guide, we’ll cover the types of Oklahoma state taxes you may owe and when they are due. In addition, we’ll discuss the products and services we offer that can make your life a little easier when tax season rolls around. 

We offer a comprehensive compliance service that keeps track of required filings such as annual reports. Our Worry-Free Compliance Service organizes and stores your important business documents on a personalized dashboard. 

If you’re looking for information about federal taxes, head over to our page on federal taxes for small businesses.  

Step 1: Establish your Oklahoma business’s corporate income tax obligations

Oklahoma corporations must file an Oklahoma income tax return and pay corporate income tax. As of 2021, the rate is 6%. For tax years beginning on January 1, 2022, the corporate income tax rate will reduce to 4%. Unlike other types of taxes with graduated rates, Oklahoma’s corporate income tax is a flat rate that applies to all corporate income. 

Returns are due no later than 30 days after the due date for your federal returns. 

Pass-through entities — like S corporations and limited liability companies (LLCs) — don’t pay corporate income tax. Rather the owners or shareholders report their share of the business’s income on their personal tax return. They then use their individual income tax rate to calculate their income tax liability. 

Step 2: Determine your Oklahoma business’s employment taxes

Oklahoma employers are required to withhold a certain amount of money from their employee’s wages as a withholding tax. The employer pays this tax to the Oklahoma Tax Commission (OTC). For the employee, the amount of withholding tax is used as a credit against their annual income tax. 

The withholding tax rate varies and can change on a yearly basis. Check the OTC’s website for current rates. 

Withholding tax returns are due on a quarterly basis. You pay the OTC based on the amount withheld and on the same schedule you pay the IRS federal withholding tax. 

Step 3: Establish your Oklahoma business’s additional state tax obligations

In addition to income and employment taxes, there are other tax categories you might need to be aware of as an Oklahoma business owner.

Sales Tax

Sales tax in Oklahoma is collected on the state, county, and city levels on all sales of tangible personal property and some services. Businesses are responsible for charging, collecting, and paying the sales tax to the appropriate agency. 

The current sales tax rate is 4.5% of the gross receipts from the sale or rental of tangible personal property. Returns and payments are due by the 20th day of the month following your sales tax reporting period. This is assigned when you register for your sales tax permit. Keep in mind that even if you don’t owe any tax for a certain reporting period, you still need to file a return. 

You can either file and pay online using Ok TAP or file by mail using the corresponding form found on the OTC’s website.

Franchise/Privilege Tax

Oklahoma requires all corporations that do business in the state to pay a franchise tax. The rate is $1.25 for each $1,000 of capital you invest or use in Oklahoma. 

For corporations that owe the maximum amount of franchise tax ($20,000), their payment is due on May 1st of each year. All other corporations must make their payments by July 1 of each year. 

Unincorporated entities like partnerships and LLCs don’t owe a franchise tax. 

Unemployment Taxes 

When starting a new business that has employees, you need to register for unemployment taxes with the Oklahoma Employment Security Commission (OESC). Unemployment taxes are amounts set aside for future unemployment claims made by employees. If you meet any one of the following conditions, as an employer, you’re required to pay unemployment taxes:

  • You employ one or more workers for some portion of a day for any 20 weeks in a calendar year
  • $1,500 in wages are paid during a calendar quarter
  • You acquired a business that’s liable for paying unemployment taxes

There are more specific types of employers that also need to pay unemployment taxes, and you can find more information about that on the OESC website. 

The current rate range is 0.01 to 5.5%. This rate will increase to a range of 0.03 to 7.5% in 2022. 

Employers can make unemployment tax payments online through the EZ Tax Express Portal. Tax payments are due by the last day of the month following the end of the calendar quarter. For example, 1st quarter payments are due April 30, and 2nd quarter payments are due July 31. 

Excise Taxes

Excise taxes are taxes levied on certain products. For example, in Oklahoma, there is an excise tax of 3.25% on the price of a new vehicle. Depending on what your small business sells, you may owe excise taxes. 

Not sure how to stay compliant? Learn more about legal compliance for small business owners.

Step 4: Prepare to file and pay your Oklahoma business taxes

Oklahoma’s main taxing agency is the OTC. They accept some tax payments electronically via their online filing system Ok TAP. To register, you need to give a reason for creating an account and basic information about your business, such as its Employment Identification Number (EIN) and physical address. 

To prepare your taxes, you’ll likely need a variety of business records. For example, you may need the previous year’s tax returns, receipts, and other legal documents. Thus, it’s important to make sure that you keep track of your business’s expenses and keep as detailed and complete records as possible. 

Doing so is easier with ZenBusiness Money App, we can help you manage your business finances. Our app allows you to keep track of invoices, so you’ll have the records you need when it’s time to file your Oklahoma small business taxes. When you sign up for our Worry-Free Compliance Service, we organize and store your important business documents on a personalized dashboard. Let us help you make tax filing seamless. 

Do I need an accountant?

Unless you’re a business tax expert, you probably need to hire a professional to help you file your taxes. There are serious consequences to making errors on your returns, missing deadlines, and not paying the correct amounts. That’s why it’s a good idea to hire an accountant or other tax professional to help you. 

The IRS has a helpful guide on tax preparer credentials and qualifications that can be found on its website.

How We Can Help

Figuring out what taxes you owe and how to file them can make any business owner anxious. But with some organization, preparation, and guidance from a tax professional, you can keep your small business current on its tax obligations. 

Doing so is easy with the ZenBusiness Money App, where we can help you manage your business’s finances. Our app allows you to keep track of invoices, so you’ll have the records you need when it’s time to file your Oklahoma small business taxes.

If your small business is still in the formation stage, our Oklahoma LLC Formation Services or Corporation Formation Services can help you get started.

No matter what stage your business is in, we have the support and resources available to help your Oklahoma business thrive.

Disclaimer: The content on this page is for information purposes only, and does not constitute legal, tax, or accounting advice. If you have specific questions about any of these topics, seek the counsel of a licensed professional.

FAQs

  • How much can an Oklahoma small business make before paying taxes?

    Corporations owe income tax regardless of how much they make. For unincorporated entities, like LLCs or partnerships, the owners may be able to avoid paying income tax up to a certain amount by using deductions and credits to reduce their taxable income.

  • What percentage does an Oklahoma small business pay in taxes?

    It’s difficult to provide a percentage or average for small businesses because the taxes they owe depend on the entity type, location, and business activities.

  • How does an Oklahoma small business pay taxes?

    Most Oklahoma small business taxes can be filed electronically. Each agency that’s responsible for collecting the tax has its own online filing system. For example, the OTC uses the Ok TAP filing system and the OESC has the EZ Tax Express Portal available for taxpayers.

  • Do I have to file taxes for my small business in Oklahoma?

    It’s very likely that your small business will owe some sort of tax. Depending on how your business is structured (corporation versus partnership versus LLC) and your business activities, the amount you may owe will vary significantly.

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